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The $61m prescription: Cook Islands govt answer to Covid-19

Thursday 19 March 2020 | Written by Rashneel Kumar | Published in Economy


The $61m prescription: Cook Islands govt answer to Covid-19
Finance Minister Mark Brown: “It is our people who provide the resilience, the compassion and care for one another that will sustain the security and prosperity of our Ipukarea.” – Mark Brown, Finance Minister“It is our people who provide the resilience, the compassion and care for one another that will sustain the security and prosperity of our Ipukarea.”

As New Zealand shuts downs its borders, Cook Islands government announces a rescue package to prop up struggling businesses and keep people in work.

Most hotel workers have already been told their hours will be cut, they say. That is just how fast the Covid-19 crisis is sweeping through the economy.

“This could affect them and their families, but at the moment they are standing by and working together,” said Fijian Community vice president Savenaca Tukitoba.

Last night, under the grim threat of widespread redundancies and mothballed resorts, Finance Minister Mark Brown announced his $61 million prescription for the coronavirus malaise.

Critically, government will subsidise the payroll of companies suffering from the economic downturn and tourism collapse: $304 a week towards the wages of every employee – the equivalent of the minimum wage for three months.

The package is intended to keep people in work but if they are laid off, local and foreign workers alike will get a month’s unemployment benefit.

Business and union leaders last night welcomed the package.

“This will put many business owners’ minds at rest and maybe people will get a bit of sleep tonight,” said Sue Fletcher-Vea, president of the Tourism Industry Council.

Fletcher Melvin, the president of Chamber of Commerce, said businesses had been waiting anxiously. Both he and Helen Maunga, from Cook Islands Workers Association, thanked government for the support.

Last night, Brown said the response package was divided into three components: health, labour and business support.

They would provide public health $5m towards preventing and preparing for the arrival of Covid-19.

They would support vulnerable community members with a one-off payment of $400 to all pensioners, caregivers and the destitute, and double the child benefit if the school holidays are extended.

And finally, they would cushion the economic shock with $22.5m for business continuity including debt repayment holidays, reduced superannuation contributions, $2000 tax credits for small accommodation providers, and payroll subsidies.

Brown said the economic response package was about prioritising people’s health and security. “It’s also about cash flow and confidence but ultimately it’s all about our people.”

He said a significant mid to longer-term recovery package would come later. “Government officials will continue to engage to inform the development of a broader economic package to be tabbed in Parliament as part of June budget session.” – additional reporting Losirene Lacanivalu


1. Support public health – $5m

-Public health communications

-Continuity of care

-Support for vulnerable communities, including the Pa Enua

-Support for health workforce

2. Support the vulnerable

-One-off $400 payment to pensioners, caregivers and destitute

-Unemployment benefit for up to one month, and support for vulnerable contract workers

-Double the child benefit for each additional fortnight of school holidays

3. Support business – $22.5m

-Work with banks to achieve three-month debt repayment holidays

-$2000 income tax credit for accommodation providers with up 10 beds

-Three-month wage subsidy at minimum wage rate to all employers are affected by Covid-19, doubled if time is used for training

-$15,000 grants for some struggling businesses

-Early refunds of provisional tax; tax threshold increase to $5000

-Reduce superannuation deductions from 5% to 3% for three months

+ Discounted power, phone and internet