15 April 2021

Key Insights

New Zealand: Quarantine-free travel between New Zealand and Australia is set to commence form 19th April 2021. Austrade posts have received an increased level of enquiry regarding trade opportunities as a result of this announcement, especially in agribusiness, food and beverage, health, defence, and advanced manufacturing.

New Zealand – Trade and Investment Queensland (TIQ) now has a presence in New Zealand, and is collocated with Austrade in Auckland. It will focus initially on five areas: food and agribusiness; health and wellness; infrastructure and construction; knowledge and innovation; and investment. Papua New Guinea – The impact of COVID-19 continues to worsen. A national lockdown is in place. Compliance levels are concerning and health services are under stress. Aid programs and vaccination programs are escalating, but COVID-19 factors add to ongoing political and economic uncertainties to increase risks for Australian companies.

Fiji and the Pacific – Economic stresses continue to grow across the region. Covid-19 has virtually ended tourism receipts in most Pacific nations. Consequently, the regional economic outlook continues to deteriorate. Discussions regarding a Pacific bubble continue, however, and the Austrade Team in Suva is researching importer and supply chain needs in anticipation of relaxed border restrictions.

The Pacific – Austrade in New Zealand reports numerous opportunities for construction, upgrade and development projects in multiple Pacific islands. These are detailed in the latest edition of Pacific News.

Market opportunities

New Zealand

  • 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. For example, a lack of seaport crane operators’ means Ports of Auckland is operating at 50% crane capacity. Order to delivery timeframes have increased from an average 90 days to 360 days for imported goods.
  • The Government’s International Airfreight Capacity Scheme – IAFC – will continue until October 2021. Now called Maintaining International Air Connectivity (MIAC), the scheme has enabled over 6,000 flights in and out of New Zealand carrying over 120,000 tonnes of airfreight worth NZ$8 billion.
  • 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

  • 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

  • Pacific – Industry sources predict substantial growth in retail sales of food, grocery and hardware across the Pacific. This includes:
  • Kiribati: 40% increase in food, grocery and hardware
  • Vanuatu: 115% increase in food, grocery and hardware
  • PNG: 30% increase in food and grocery
  • Nauru: 15% increase in food and grocery
  • New Caledonia: 45% increase in food and grocery
  • Other Pacific nations: Average increases of 39%
  • Austrade is assisting with introductions and regulatory advice in several markets.
  • All Pacific islands report close to zero occupancy rates in resorts and hotels. The cruise industry is closed. All air traffic has either ceased or is available only on an ‘essential use’ basis. There is widespread advocacy for an extension of the proposed trans-Tasman ‘bubble’ to accommodate Pacific nations.
  • 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 2500 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.
  • The PACER Plus trade agreement came into force on December 13 2020. The Cook Islands join New Zealand, Australia, Samoa, Solomon Islands, Niue, Kiribati and Tonga, which have all ratified the agreement. The aim of the agreement is to help the island nations to become more active partners in regional and global trade. Opportunities for Australian businesses will increase over time. 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 and webinar information program.
  • 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.