Driver licence revenue questioned

Tuesday April 22, 2014 Published in Letters to the Editor
Murienua MP James Beer. 14040218 Murienua MP James Beer. 14040218

Dear Editor, Your story headed “Licence Change Means $240,000 Lost Fees” raises some questions.

The Government, in its 2013 and 2014 Budget Estimates Appropriation Bill estimates revenue collected from drivers’ licences is in the vicinity of $700,000. The Financial Secretary mentions a similar amount in your story.

It is estimated that 12,000 overseas drivers purchase this licence when they visit – at $20 each – for a total of $240,000. 

That leaves $460,000.00 collected every year from drivers in the Cook Islands. 

However, some Cook Islands drivers may hold annual drivers licences and some may hold multiple-year licences. To do a best-case revenue calculation, if we were to take the largest amount of income generated per annum it would be when Cook Islanders buy annual licences at $20 each. Let’s then divide the balance of the revenue which is $460,000 by the amount of an annual licence (our hypothetical $20) we would then have the number of annual licences. This figure is 23,000. That’s 23,000 local residents buying licences every year. If we use multi-year licenses, which are cheaper, then even more people would have to buy licenses to make up the annual dollar figure of $460,000.

We know that our resident population is roughly half 23,000 and we know a portion of those residents would be children and babies who would not qualify to drive.

I'm sure some small part of the calculation is missing here, but we can’t tell from the numbers supplied by MFEM and the Financial Secretary what that might be. But it does appear as if the Financial Secretary will be looking for a lot more than the $240,000 estimated losses from the change in drivers licence rules for visitors.

James Beer

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