15 October 2020
Key Insights
New Zealand — The country has moved to Level 1 Covid19 restrictions. There is intense public discussion regarding a progressive lifting of border restrictions to allow trans-Tasman travel. Phase 1 (travel from NZ to NSW and NT without quarantine) is set to commence from October 16th. Public reports suggest the $1 billion trans-Tasman tourism market may fully reopen during January 2021.
New Zealand — Austrade in New Zealand continues to receive increased levels of enquiry from Australian exporters. Trade and Investment Queensland (TIQ) will establish a presence in New Zealand from November 2020 as an initial six month pilot. The TIQ post will work from Austrade offices in Auckland.
Papua New Guinea — 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.
Papua New Guinea — The risks and challenges for Australian companies continue, especially with restricted access to foreign exchange. A further downturn of approximately 20% in the transport, accommodation and mining sectors is anticipated. The construction, oil and gas sectors have been less impacted as a result of global commodity prices.
The Pacific — Economic stress continues to grow across the region. The regional economic outlook continues to deteriorate and the Fijian economy has stalled. The Reserve Bank of Fiji says that its $2.3 billion of foreign reserves are sufficient to cover 8.5 months of retained imports of goods and services.
The Pacific — Pacific islands report close to zero occupancy rates in resorts and hotels, and the cruise industry is closed. All air traffic has either ceased or is available only on an ‘essential use’ basis. There is widespread discussion about extending the proposed trans-Tasman ‘bubble’ to include some Pacific Island nations.
Vanuatu: Freight costs have increased substantially, with the cost of sea freight increasing by 30%, and of air freight costs increasing by 150–300%.
Market opportunities
New Zealand
New Zealand — Austrade has recorded a substantial increase in enquiries as a result of COVID-19. The increase appears to be driven by the anticipated lifting of border restrictions as part of trans-Tasman ‘bubble’ and the view that New Zealand is a safe/known market. Enquiries typically relate to defence/advance manufacturing, agri-foods and health.
New Zealand — The new Trade and Investment Queensland (TIQ) post in Auckland will focus initially on five areas: food and agribusiness; health and wellness; infrastructure and construction; knowledge and innovation; and investment.
New Zealand — Austrade is also receiving direct enquiries from Australian state government agencies and ministries – including Tasmania, Queensland and ACT. The focus of enquiries is the potential to open a new market and explore partnership opportunities.
Papua New Guinea
Papua New Guinea — 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.
Papua New Guinea — The Asian Development Bank (ADB) is 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, and create new opportunities for job creation and socioeconomic growth. 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.
Papua New Guinea — The government plans to introduce a railway system in Papua New Guinea. It is anticipated that by mid-next year, a comprehensive railway policy with appropriate supporting legislation should be ready.
Papua New Guinea — The Ok Tedi mine is resuming operations after a six-week closure due to the COVID-19. Recommencement of operations is welcome news to the state and landowners with a K150million dividend paid last week. Meanwhile, Oil Search Ltd reported an 85% decline in half-year core profit, due to a slump in oil and gas prices as the coronavirus outbreak slowed economic activity and demand worldwide.
Papua New Guinea — Newcrest’s Lihir mine has awarded has awarded the Engineering, Procurement and Construction Management (EPCM) services contract to Australian services company Worley.
Fiji & the Pacific Islands
Fiji — The Australian Government has partnered with the Fiji Ministry of Health to improve access to medicines. The agreement aims to improve procurement & supply chains for medicines and consumables. This could open opportunities for Australian med-tech industries.
The Pacific — The COVID0-19-induced economic downturn across the region means new borrowing and debt funding for infrastructure by Pacific Island governments is extremely limited. As a result, new funding and contracting models will be required.