18 Jul 2002

World Bank says Pacific Islanders sending money home, harm the NZ economy

10:46 am on 18 July 2002

The World Bank is urging Pacific Islanders in New Zealand to stop sending cash to families in the islands, saying it creates dependency and harms New Zealand's economy.

The call has come at a two day Pacific Economic Symposium in Auckland attended by representatives of the public and private sectors.

Remittances from New Zealand, Australia and the United States are vital for the economies of countries such as Samoa, Kiribati and Tonga.

In the latest monthly figures from Samoa, released yesterday, five million US dollars was remitted back to Samoa in May.

It was by far the biggest source of revenue for the Samoan economy.

The chief economist of the Westpac Bank and Pacific Business Person of the year in 2001, Adrian Orr, says people need the right incentives around them to invest and work hard.

He says remittances and welfare can lead to dependence.

Denise Aldous, the general manager fo the World Bank's South Pacific Project Facility says as so many pacific people are on welfare, remitting funds ultimately costs the New Zealand taxpayer.

"And I worry I suppose, that a lot of the money that's coming in to keep the families going in the islands is actually putting strain on the families here in New Zealand and also a strain on the New Zealand taxpayer as a result of that."

Denise Aldous.