14 July 2021

Key Insights

New Zealand: Management of the trans-Tasman ‘bubble’ is maturing to manage the fast-evolving conditions in Australian states and territories. Currently, travel from NSW is ‘paused’. New Zealand now requires a negative pre-departure test for COVID-19. Conditions are available on the New Zealand Home Affairs safe travel zone site.

New Zealand: Enquiries about trade opportunities in agriculture, food and beverages, health and advanced manufacturing are all on the increase. Most economic indicators point to a strong recovery, despite the impact on international tourism.

Papua New Guinea (PNG): Infection rates are thought to be stabilising. Most resources-based companies have resumed work, and many FIFO employees have returned. The pandemic and associated border closures are still the biggest challenges facing companies, however. The Government’s “Take Back PNG” campaign is causing investment uncertainty (see below).

Fiji: The country remains in lockdown. The economy will see a further contraction this year and there will be a delay to a reopening of the border. The Government’s focus is on vaccination: 50% of Fijians have received one vaccine dose, and the Government hopes to have 80% of the population fully vaccinated by October. This should enable Fiji Airways to return to 25 per cent capacity.

The Pacific: Economic stresses continues to grow across the region. Central Bank governors from Pacific Island nations are lowering growth projections, and report that their monetary and fiscal positions remain fragile. The latest edition of Pacific News reports in detail on the current situation 

Market opportunities

New Zealand

·         The New Zealand Government’s International Airfreight Capacity Scheme (IAFC) has been extended to the end of October 2021. Meanwhile, the Maintaining International Air Connectivity (MIAC) program has enabled over 6,000 flights in and out of New Zealand carrying over 120,000 tonnes of airfreight worth NZ$8 billion.

·         New Zealand continues to experience significant delays in international supply chains. This is partly due to global disruptions caused by COVID−19. Structural issues include a shortage of skilled labour at ports. Order to delivery timeframes have increased from an average 90 days to 360 days for imported goods.

·         The Government has announced a range of measures to deal with housing affordability and supply. Initiatives include a NZ$3.8 billion housing acceleration infrastructure fund. They also include a range of tax and tax-offset changes to dampen investment market and support first home buyers.


Papua New Guinea

·         Australian defence spending in Papua New Guinea looks set to create opportunities for Australian maritime and engineering companies. The Australian government has signed a A$300m for the development of 7 ports. Austrade will help identify opportunities for Australian sub-contractors and supply chain operators.

·         The PNG Government’s ‘Take Back PNG’ campaign over the past two years has focused on five key resources projects:

o   P’nyang (ExxonMobil),

o   Papua LNG (Total),

o   Pasca A (Twinza Oil),

o   Porgera mine (Barrick Niugini)

o   Wafi-Golpu mine (Newcrest).

The campaign wants a greater share of returns/royalties to maximize revenues for the state. As a result, the mining and resources sector has slowed considerably. Recent comments by PM Marape that PNG is … “not in the business of scaring off foreign investors” … is seen as a welcome shift in approach.

·         The Managing Director of PNG Power, Flagon Bekker has outlined the state-owned utility’s plans to improve the power supply in Papua New Guinea, including a massive new hydroelectric dam, called Ramu 2. This huge investment project would take 6–7 years to complete.

·         The Government’s national electrification project – which is supported by Australia, New Zealand, Japan and the US – continues to provide opportunities for Australian companies. This includes contributing to supply chain and technical solution requirements. Austrade is working with multiple energy and engineering companies to help various consortia to bid for work.

·         Australian engineering companies engaged in a A$10 billion road infrastructure program are seeking partnerships with Australian roads companies. The geography in PNG is challenging and will require new technologies and equipment. Long-term maintenance programs are attached to the initial capital projects, providing ongoing security. The project is financed by the Asian Development Bank.

·         The Asian Development Bank (ADB) is set to finance a Greenfield 4G mobile telecommunications network through Fiji’s Amalgamated Telecom Holdings (ATH) subsidy, ATH International Venture Pte. Limited (ATHIV). The new network is designed to enhance mobile, broadband and internet services. According to ADB, Papua New Guinea is the Pacific’s largest-and-least-developed telecommunications market, since only 11% of the population have internet access.


The Pacific Islands

·         Industry sources predict substantial growth in retail sales of food, grocery and hardware across the Pacific. This includes:

o   Kiribati: 40% increase in food, grocery and hardware

o   Vanuatu: 115% increase in food, grocery and hardware

o   PNG: 30% increase in food and grocery

o   Nauru: 15% increase in food and grocery

o   New Caledonia: 45% increase in food and grocery

o   Other Pacific nations: Average increases of 39%

·         All Pacific islands report close to zero occupancy rates in resorts/hotels. The Cruise industry is also closed. Austrade is assisting with introductions and regulatory advice in several markets.

·         The PACER Plus trade agreement is liberalising trade among multiple Pacific nations, including New Zealand, Australia, Samoa, Solomon Islands, Niue, Kiribati and Tonga and the Cook Islands. Opportunities for Australian businesses will increase. Austrade is working with the Office of the Pacific in DFAT, Pacific Trade Invest, New Zealand Trade and Enterprise and various Pacific business chambers to develop a business engagement strategy.

·         The Reserve Bank of Fiji June Review reports continuing sluggishness in investment and economic activity. Liquidity, inflation and foreign reserves remain stable. The prolonged unemployment situation due to the pandemic has exacerbated poverty and inequality amongst vulnerable groups. Continued fiscal support will be crucial to ease the burden on households and firms.

·         Importers and wholesalers in Fiji are having difficulty arranging freight. Since the merger of Neptune and PDL into NPDL, shipping from Australia to some Pacific nations goes via New Zealand. Currently freight can take 6–8 weeks via New Zealand. This imperils supplies of perishable goods. Businesses who use consolidators find that loads of one or two containers struggle to gain passage because they are displaced by larger consignments. Importers are planning stock for 3–5 months in advance, as airfreight is currently too costly.

·         Help may be on the way. Maersk has resumed shipping to Fiji after a 7-year absence. Maersk is now operating two 2,500 twenty-foot container capacity vessels between Suva, Lautoka and Auckland, Tauranga, Nelson, Timaru and Lyttleton in New Zealand. Fiji Ports Corporation Ltd expects this new service to increase competition.

·         Fiji’s tourism sector continues to be severely impacted by the COVID-19-related downturn. There are knock-on effects for unemployment and social dislocation throughout the formal and informal economy. Tropical cyclones Yasa and Ana have added flooding and storm damage to the strain: the Australian Government and the ADF are rendering assistance.



·         Austrade’s NZ Pacific May 2021 edition of Pacific News contains current opportunities in infrastructure and other market information. Pacific News offers a regional round-up of infrastructure and other opportunities for Australian business and is distributed to over 600 businesses each month.



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