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The ongoing costs of Covid-19 pandemic

Saturday 5 March 2022 | Written by Al Williams | Published in Features, Weekend

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The ongoing costs of Covid-19 pandemic
PHOTO: BBC/22021012

Cook Islands continues counting the cost of Covid-19 with increasing numbers entering quarantine.

While Covid-19 contacts are no longer required to spend seven days in self-quarantine, household contacts – people sharing accommodation with a positive case – are still required to quarantine for 10 days.

As of Friday, there were 160 close and household contacts in quarantine.

It adds to the ongoing financial cost of an economy already burdened by associated expenses.

Latest figures show Cook Islands’ Covid-19 medical response cost more than $2 million in the six months to January.

Figures from the December 2021 Quarterly Financial Report show the total spent for the quarter year to date (YTD) was 70 per cent against total budget – or $2.1 million against a budget of $3m.

That included vaccination rollout-related and managed isolation quarantine (MIQ) expenses of two scheduled flights in November and December 2021.

Government anticipates further utilisation of the medical response budget this year.

It includes continuing the remaining vaccination rollout on Rarotonga and Pa Enua plus preparation work in lead up to the reopening of the borders in January.

There are also significant business and infrastructure related costs.

In late November it was announced $20 million of a $60 million grant from New Zealand would be spent on immediate financing needs, while $40 million would contribute to infrastructure initiatives.

Two weeks later Cook Islands borrowed US$40 million ($58.3m) from the Asian Development Bank for immediate financing needs with an additional US$40 million set aside if the country became in need of the money.

After signing off the loan, Prime Minister Mark Brown said half of the money would be for immediate use to create an enabling environment for the private sector to grow and develop.

On Wednesday PM Brown told Cook Islands News there are provisions for people who are required to isolate, “similar to the wage subsidy”.  

“There will be I think for us, the inconvenience of having a number of staff who will be isolating for a 10-day duration.”

The following day he announced Covid-19 contacts would no longer be required to spend seven days in quarantine.  

“We are keeping close contact with our community, the business sector, and the tourism sector in particular, but I think that all of us are expecting as a result of the spread of Covid-19, there will be an increase in people taking 10-days isolation.

“We have set aside a budget for this sort of thing.”

The key focus remains on health measures, he said, “to look after people who are sick”.

“Government has a package for people if the private sector business is not able to pay them, the government has a facility available to assist those people who are required to isolate.

“The Private Sector Taskforce will bring a message to the likes of the Ministry of Finance to see what sort of continuation is needed and whether the wage subsidy needs to continue.”  

Rebecca Tavioni from the Cook Islands Chamber of Commerce said a critical labour shortage in the Cook Islands has been further exasperated by the requirement for staff to isolate when required.

It has resulted in multiple new challenges for business owners to navigate.

For the office of the Chamber of Commerce, currently 30 per cent of its staff are in quarantine, however, given the impacted roles can work remotely, the effect isolation has on their productivity is nil.

“For some of our members in hospitality, the impact of isolating staff is first felt by the consumer,” said Tavioni, Chamber’s chief executive officer.

“Some businesses are strategically limiting their menu to counter staff shortages.

“For one business in particular, the absence of their staff may result in a temporary pause in retail sales.

“However, given the relationship they have with many of their wholesale customers, wholesale sales can still continue through logistically timing ‘no contact’ exchanges with remaining staff.”  

Tavioni said local businesses are doing their best to support Te Marae Ora measures while protecting their ability to operate.

“The public text notification calling for community testing on Tuesday morning threw a spanner in the works, with many of our members questioning how they could adhere to TMO’s request without closing down their doors completely.

“TMO, through the Cook Islands Tourism office have made available free RAT tests for businesses carrying out RAT tests on their staff, this approach helps relieve congestion at public testing stations and reduces time away from work for testing for affected staff members.

“Undeniably, the private sector is feeling the pinch, across the island many businesses who provide goods and produce to our community are privately owned and operated, these businesses are now in a situation where they must delicately manage the needs and health safety of their staff, while maintaining service for their customers, primarily local residents.

“Furthermore, businesses who have staff in isolation are still required to pay wages, regardless of whether or not their doors remain open for service, this is aided by the limited isolation leave payments available from the Cook Islands Government.”  

Beyond the current impact Covid-19 isolation and testing requirements has on existing staff, there remains the need for additional workers to be able to enter the country, she adds. 

“The Chamber of Commerce continues dialogue with government through the Private Sector Taskforce to see this to resolution.

“The Chamber has collated many of its member’s views on the matter and welcome anyone who wishes to discuss this area further to contact our office.”

Cook Islands Tourism Industry Council president Liana Scott said there is anxiety among industry members and business operators about the possibility of quarantine.

“It’s about the implications of which are pretty significant to the output of business, particularly at a time where staff numbers are already low,” said Scott, who is also the general manager of the Muri Beach Club Hotel.

“Most if not all have been through the Tourism/TMO RAT training workshop, and therefore are able to administer RAT tests to staff on a regular basis – this has given significant relief for staff members, but ongoing test kits do come at a cost, difficult at a time where businesses are cash poor, particularly if regular tests are indeed required.”

Scott said industry has reached out to government to look for solutions where staff or owner operators, particularly of the smaller businesses where they are all regarded as essential, to give some leniency as to isolation orders.  

“Particularly if that business has guests that still need to be cared for and no one left to do it.

“As Covid numbers increase in New Zealand, forwards bookings are starting to cancel with one property indicating that they have dropped from 45 per cent occupancy to zero for the month of March. 

“Industry members have discussed alternate options such as offloading guests to another property not subject to the same constraints, however that comes with associated difficulties, not only financial, but consequential problems further down the track if the property to which guests are relocated experiences similar difficulties.

“It would be comforting to know that in the different dire scenarios, that the businesses can see some prospect of support and assistance where under the Covid-19 restrictions they are unable to continue to operate.”