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Tough calls: Saving money to save lives

Tuesday 31 March 2020 | Written by Rashneel Kumar | Published in Economy


Tough calls: Saving money to save lives

Government reveals the cost-cutting that is helping to pay for the coronavirus economic response package.

Government has cut payments to Air NZ and is delaying buying a cargo ship and building cyclone centres for the Pa Enua – freeing up money to combat Covid-19.

The savings, supplemented by a $7 million coronavirus aid commitment from New Zealand, have paid for the economic support package that takes effect tomorrow.

The inter-island cargo ship was budgeted to cost $2.2 million, and Cook Islands had been paying air New Zealand $2.5 million to fly here – big costs that can be saved with the new travel bans and flight reductions.

Natalie Cooke, the government’s director of economic planning, said due to the global economy, “it is highly unlikely that they would be able to purchase the vessel this financial year”.

So they had pulled back the money and would re-appropriate it in the 2020/21 Budget if the Shipping Roadmap, which the government is undertaking, indicated they should.

Government had decided to purchase the vessel after Cook Islands’ only barge, the 46-metre Layar Mas, was sold to a buyer from the Bahamas last year.

The Layar Mas, operated by Cook Islands Towage, had been a huge help to those living in the outer islands. It also shipped government cargo from Rarotonga for infrastructure work on southern and northern group islands.

The Air New Zealand subsidies are being saved after the airline cancelled most of their flights to Rarotonga from Auckland, and all of those from Sydney and Los Angeles, as Covid-19 closed the borders.

The savings are balanced against an $200,000 increase inMPs’ travel and allowances. Cooke said part of that funding had already been spent on travel from December to March.

And an additional $30,000 was budgeted for constituency visits, she said, in MPs needed to travel to the Pa Enua.

“While quarantining is required prior to departure, this does not mean that MPs will not be able to travel to the Pa Enua – rather that they need to undertake their quarantine period first.”

Parliament also approved a $95,000 increase to the Seabed Minerals Commission budget: “Government is continuing with its plan to proceed to exploration of our EEZ in the coming year – this was the plan prior to the Covid-19 pandemic,” she said.

“The funding provided to the Seabed Minerals Authority will provide the ability for the Authority to operationalise the steps required to achieve exploration.”