Government and Opposition leader say a big cut to the tourism budget but is unfortunate but understandable, with the dramatic fall-off in tourism revenue.
Deputy Prime Minister Mark Brown Government says the Budget was not about fixing the crushed tourism industry; it was about looking after Cook Islanders going through severe financial hardship.
Brown and his New Zealand counterpart Winston Peters have been in ongoing conversations about a travel bubble between Cook Islands and New Zealand – and many hopes are pinned on those negotiations.
The fact the talks were happening was promising, said Opposition leader Tina Browne. “I sincerely hope those conversations are fruitful.”
Browne said there were some overly optimistic revenue outlooks based on assumptions, especially around tourism numbers.
“To some extent it is understandable. We have no tourists because of the border shutdown,” she said.
“A couple of weeks ago we were hoping for a lifting when New Zealand returned to Level 1. Then two ladies slipped into the country and there are now a number of active cases.
“We ask ourselves what does that mean for us?”
Browne acknowledged the country needs to be extra cautious, but at the same time the borders need to be opened. “Come September we will need more oxygen,” she said.
The Budget allocation for tourism was cut this month, from $9.25 million in 2019/20 to $8.53m in the financial year starting tomorrow. That is a decrease of more than $700,000.
Cook Islands Tourism chief executive Halatoa Fua said the impact of the border restrictions to minimise the public health threat of Covid-19 clearly had a detrimental effect on the local tourism industry and the economy.
“The reduction in Government revenue is reflected in a tourism budget decrease,” Fua said.
“We will restrategise on our marketing strategy based on the projected markets available in the next 12 months.”
Ivirua MP Agnes Armstrong said it was important to focus on diversification of the country’s economy, rather than continuing to put “all our eggs in one basket”.
She told Parliament the country could not rely on tourism projections through to December, or the revenue they would bring.
“Approximately 3000 visitors every month until the end of the year? How can this be when we know how tourism has been impacted? Tourism will never be the same again.”
Armstrong said she was encouraged to see more people planting and it could be timely to restrict imports of some fruit and vegetables.
In 2006, Cook Islands began charging seasonal tariffs on some imported fruit and vegetables, to protect local farmers.
“We still need to be mindful and look for other avenues of income to ensure we can repay the borrowings,” she said.
Armstrong acknowledged the foresight of the government for putting money aside for “rainy days”.
She agreed with the Deputy Prime Minister that it put the country’s economy in a good position to move forward after the Covid-19 pandemic. “I’ll give credit where it is due, to the Minister of Finance and the Ministry of Finance and Economic Management,” she said.