Borders should open in July, says private sector

Saturday May 23, 2020 Written by Published in Economy
Mareko Island Creations owner Mark Sherwin is running a clearance sale to generate some income at his Tutakimoa shop. Mareko Island Creations owner Mark Sherwin is running a clearance sale to generate some income at his Tutakimoa shop. RASHNEEL KUMAR 20052113

One-fifth of companies say they are considering shutting down, and need the tourists back.

At the beginning of the year, Mark Sherwin had 13 staff working at his three thriving clothes and souvenir outlets on Rarotonga.

That all changed when the Covid-19 crisis hit Cook Islands’ tourism industry. Sherwin was forced to close down two of his Mareko shops and let go five staff after sales dropped dramatically.

A survey from the Private Sector Taskforce reveals a fifth of Cook Islands businesses are considering closing their doors due to the impact on tourism from Covid-19.

Sherwin admits he is facing a tough challenge in keeping his business afloat and his workers employed. He has ventured into online sales which is bringing some much-needed revenue. 

Sherwin is also running a clearance sale with 80 to 90 per cent discounts on items to boost revenue.

The wage subsidy from government, he says, is helping him keep the remaining eight workers on the payroll. 

“Everyone around the island is going through some difficult times. We are just trying to keep the business floating until things return back to normal.”

Businesses such as Mareko’s are now looking for some certainty from government over the reopening of the borders.

Fletcher Melvin, the Private Sector Taskforce chairman, said they were pushing for the borders to reopen in July and for the country to be part of the “bubble” being proposed by New Zealand.

Melvin said government should start to have “a date in mind” so that businesses can begin making decisions on finances and other logistics.

They have been using this time to get ready, but they need something concrete to aim for. 

“It’s all about opening the border. If New Zealand has no cases and we can get into that bubble and really push for the opening of the border, this will be a massive amount of hope for us. Things will start to change,” Melvin said.

“If that doesn’t happen then it will get worse.”

The economic response survey carried out by the Taskforce earlier this month also reinforced the critical importance of ongoing support for business and workers in the form of wage subsidies and business continuity funding.

Businesses say generating revenue, managing operational costs and payroll are their top three concerns right now. They want the government to focus primarily on wage support, followed by grant support and tax support. They regard training as a lower priority.

Melvin said businesses would still require government support after the borders had reopened and visitors were allowed into the country.

“It’s sort of phase thing because when tourism opens up, we are not expecting there will be a rush in tourism so it might start at 20 per cent then the numbers rack up over a year. That’s how we see the government support phasing out over that time as numbers increase the support decreases. I think that’s a very responsible way of doing this.”

The big issue businesses were grappling with now is that they continued to burn through cash even in hibernation. 

“They still have to pay for electricity, superannuation contributions, insurance, rent, and telecommunications among other things. That money has to come from somewhere,” Melvin said.

“There’s a strong case for continued wage subsidies and business continuity support as it’s a critical lifeline with so many businesses struggling to keep their head above water.”

More than 180 businesses from Rarotonga, Aitutaki, Atiu, Mangaia and Mauke took part in the survey, representing self-employed, small, medium and large employers. 

It drew responses from a wide cross section of local industries, including agriculture, marine, culture, crafts, retail, restaurant and food and market huts.

2 comments

  • Comment Link Dave ParkerNZ Sunday, 24 May 2020 19:57 posted by Dave ParkerNZ

    Kia Orana. It certainly make sense to re-open the borders between NZ & Cook Islands based on the current Covid19 status. Tourism obviously plays a significant part in the ongoing economic climate of the Cook Islands. NZ plays it part in supporting the Cooks in many many ways and without this support, many businesses as outlined, will not survive.
    For fortysix years now, I have been visiting and living (part-time) in the Cook Islands and I cannot wait until the day I can return to 'lend a hand' During this time I have been thrilled to bring or send many hundreds of Tourists.....I have a number who are keen to return this year, some of which already have airfares paid for and accommodation sought... we are 'champing at the bit' to get back!
    Kia manuia
    Dave ParkerNZ

  • Comment Link Gary Price Saturday, 23 May 2020 10:30 posted by Gary Price

    What about opening your border to New Zealanders who have lived in New Zealand for the last 3 months only. That would be a very safe way of starting it. That would also get the ball rolling, and tourists flowing in. It would only involve getting Air NZ flights back again, and I'm sure they would be happy with that also.
    A bit of promotion on N.Z. television for a winter break in Sunny Rarotonga, and we will be lining up. Obviously the sooner this is done the better, and even better if it happens before the Tasman Bubble which could be months away. You need the tourists now, through our winter, as not many will want to come to Rarotonga when our summer starts . PLEASE LET US IN ASAP ????

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