Fee hike brings job losses

Thursday June 15, 2017 Written by Published in Local
Polynesian Rental Cars and Bikes general manager Arthur Pickering shows the fl eet of new motorbikes parked idly at their yard. 17060807 Polynesian Rental Cars and Bikes general manager Arthur Pickering shows the fl eet of new motorbikes parked idly at their yard. 17060807

At least one rental company in Rarotonga has started laying off staff due to the repercussions to its business from the hike in the motorbike license fees which came into effect in October last year.

 

Polynesian Rental Cars and Bikes general manager Arthur Pickering claims the clause to increase the motorbike licence fee was done “silently”, without any consultation or notice. 

He said there was no advice or email to say fees had gone up.

Pickering said the first they heard about the new licensing fees was from a tourist who came back to them to inform that their information on the licence fee was incorrect, and he had just been charged $90 at the police station.

Visitors now have to fork out $90 ($70 testing fee and $20 for a visitor’s licence), compared to $30 in the past.

Pickering said the increase was greatly affecting his and other rental businesses on the island, forcing some to lay off staff to recoup the loss.

“We had to restructure the whole business when the sales dropped, and unfortunately we’ve have to lay off staff. These people have families and they have commitments as well,” Pickering said.

“Some I have put on a part-time basis just to keep them employed so when the fee is reverted and things normalize, then I can re-employ them again on full-time basis. They (the authorities) didn’t think of the impact this has had on the community at large.”

Sharing their utilisation figures, Pickering said they were experiencing a drop of about 30 per cent in the motorbike rentals compared to the same period last year. 

In November last year, the company experienced a drop of 16 per cent in motorbike rentals compared to the same period in 2015.

The drop increased by a further three per cent in December. 

Due to Christmas holidays, Pickering said they experienced a rise in rentals of just three per cent in January this year, followed by 30 and 27 per cent declines in February and March, respectively.

“I’m not just speaking for our company, but I’m speaking on behalf of other scooter rental owners when I say our business is being affected by the new fee,” he said. 

“If you drive around, you will see motorbikes sitting everywhere. Normally, the yard should be pretty much empty at this time of the year.”

Pickering said there were many families and groups travelling to the Cook Islands due to the affordable packages offered by airlines servicing Rarotonga. 

He said normally, many visitors would hire a motorbike as it was the most convenient mode of transportation on the island. 

“But now if there are six people, with the $90 licence fee and $100 per week bike rental charge, their total expense for a week will be over $1100.

“It has a ripple effect and the bottom line of it will be that Inland Revenue will see a huge drop in their tax collection.”

Pickering said he had ordered a new fleet of motorbikes in September last year which cost him $150,000. The bikes arrived a couple of months ago and are parked in the company’s yard.

He said the bikes had been bought to replace the existing fleet to ensure the company maintained a high level of service. 

“I’m not going to waste another $8000 to register these bikes. If I had known about the fee increase, I wouldn’t have wasted money bringing in the new fleet.

“The thing that’s annoying is that they think they can make these changes, but don’t realise business operators spend more trying to keep ahead of providing their service. Yet these guys cannot do a proper consultation before imposing such fee.”

Pickering said he understands the logic behind the hike in the fee was to provide training to curb accidents on the road, but these continue to happen. 

“Tourists don’t want to waste half a day driving around cones. They have planned activities to attend to when they travel here. 

“And I think the biggest reason for accidents is drink-driving and the main concern has been head injury prevention which is covered through the helmet law.

“We have had a number of motorbike accidents lately so my concern is, is this new system really working?”

Cook Islands Police Services said there would be “no reversal” to the hike in the motorbike licence fee.

“The Police Service is not aware of tourism sector’s unhappiness over having to pay fees that are favourably comparable to New Zealand and Australia,” police spokesperson Trevor Pitt said. 

Cook Islands Tourism Corporation chief executive officer Halatoa Fua said Tourism had provided the right advice to Cabinet based on input from the tourism industry, in the belief that the facility to revert to the old licence regime would be approved.

“The wider impact of the motorbike licence fee hike is more on the broader economy rather than destination marketing - eg less revenue collected by the private sector means less tax take by government,” Fua said.

“However, it should be noted that the motorbike licence fee hike is discussed in social media forums and spread by word of mouth.

“Crown Law have also provided the Police Department with the required legal documentation to activate this Cabinet directive (to revert to the original fee).”

Cook Islands Tourism Industry Council president Sue Fletcher-Vea has said rental vehicle operators experienced a 60-70 per cent drop in income from scooters following the hike in the motorbike driver’s licence fee.

Earlier, Prime Minister Henry Puna expressed his displeasure about the length of time it was taking to change motor scooter licensing fees back to the old ones.

Puna told CI News he could not understand the delay when Cabinet had authorised the reduction from $90 to $30 as far back as November last year

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