2 Dec 2015

Report finds remittances bring big economic benefits in Pacific

From , 6:03 am on 2 December 2015

A new report has found New Zealand's seasonal worker scheme is bringing big economic benefits to the countries of Samoa and Tonga.

Under the Recognised Seasonal Employer scheme, the horticulture and viticulture industries in New Zealand recruit workers from the Pacific islands for seasonal work.  

The study of 640 Samoan and Tongan workers in Hawkes Bay has found they sent home more than 40 percent of their take-home income, an average of US$3,000 plus per person.  

Massey University Professor Rukmani Gounder told Bridget Grace those remittances are helping with development in Samoa and Tonga.  

RUKMANI GOUNDER: We found that most of these workers spend their money looking at daily expenses, looking also at education, health, housing.  They also have small investment, business investment when they go back to Samoa and Tonga.  They also invest in small agriculture, farm production of goods.  Based on some of this household expenditure pattern you find that they do have various social welfare development impact as well.

BRIDGET GRACE: I understand with the remittances it can support on average nine people, how important could you say this money is for those families?

RG: It is quite important because the income they earn from New Zealand of course is much higher, and so when they go back that is the amount of income they are able to support their families.  One of the things about the remittances is that the families in the South Pacific particularly Samoa and Tonga but also Vanuatu and other places.  The number of the people in the households are usually larger than most of the other developed countries so this is the money which goes a bit more, further enough.  In terms of not just helping their own household but their parents and grandparents and uncles and aunties who are dependent on some of this.  And culturally based on that as well you'll see that remittances go afar in terms of providing for a range of household activities and at the same time looking after the families as well.  The other thing we also found that a lot of money also goes into education, and also for the housing as well you'll see that a lot of better houses are built. Particularly more important is also for educational expenditure for their children and all that.  You also found that a bit of the money also goes into health services as well, and better health medicine and visiting the doctors and so on and so forth.  So I think it is quite important and it does stretch further enough than the income they would have probably earned if they were just working at home.  

BG: Are there any, are there going to be any changes from the report?

RG: Well what we have said is basically that this has got a development impact, it shows a wide range of expenditure and importance to the seasonal workers.  The governments probably in Samoa and Tonga might be quite interested in these findings as well and see how it improves their economy, particularly the social development side, economic development side and of course remittances earning itself.  It's a big assistance from the macro economy for the government as well because it fuels some of the gap in terms of foreign exchange earnings and so on.  So I think it is very important from both sides.  

BG: Do you know if the scheme is going to be expanded in any way?

RG: At the moment there is a cap of 9000 workers per year from the Pacific.  Depending on the findings I'm sure the government would be interested to see the benefits that can be derived from this project.