The law's actually been in place for some time but is rarely enacted.
A group of key stakeholders, including the tourism industry council and the body which collects departure taxes met yesterday (Wednesday), voting to make the recommendations.
Metua Vaiimene from the Cook Islands Tourism Corporation's says the changes are needed if Cook Islands wants to remain competitive.
Presenter: Catherine Graue
Speaker: Metua Vaiimene, Cook Islands Tourism Corporation
VAIIMENE: The recommendations that we have all agreed on that both crews as well as passengers should be exempted from the departure tax requirements as long as they travelling into and out of the Cook Islands on the same vessels, and that they are internationally registered crew ships. This we feel will help entice cruise ships to visit the Cook Islands and will also streamline the exemptions currently in place for air crew, with ships crew.
GRAUE: So by making all crew passengers and their staff exempt from this departure tax is there any timeframe, the incident that has brought this whole issue to light was that the MS Marina wanted to stay overnight and that's when it was discovered that it would then have to pay a departure tax. So you're saying now that you're recommending the government completely make any cruise ship, doesn't matter how long it stays in port in Cook Islands, is not required to pay a departure tax?
VAIIMENE: That would be the ideal environment with which the Cook Islands as a cruise destination would remain competitive, given that we don't have any actual berthing places for our cruise ships, they all have to anchor offshore and tender into the islands. So anything that will reduce cost to the cruise liners and of course any savings that they can pass on to their passengers, their clients, makes the Cook Islands a more attractive cruise destination.
GRAUE: Now I understand that you want to remain competitive, obviously there are many beautiful islands in the Pacific that cruise ships want to come and visit, but also the departure tax would be a valuable source of income for the Cook Islands. So how have you been able to balance that up and decided it would be more worthwhile and more cost-effective or beneficial for Cook Islands to not charge a departure tax than to do so otherwise?
VAIIMENE: Some of the considerations are to do with volume, so we're not talking about large volumes of passengers on cruise ships. In the past few years there have been less than five-thousand passengers listing the Cook Islands on cruise ships. In years past we did have triple those numbers, and we'd like to be able to get back to those levels. But the revenue that is foregone or not levied in this case in terms of cruise ship passengers, is quite minimal, when you compare that to the economic benefits that a cruise ship does provide. We are currently studying more carefully the visitor spend by cruise passengers, but we estimate that it is somewhere in the vicinity of say 160 dollars to 220 New Zealand dollars per day for cruise ship passengers, and we feel strongly, the Cook Islands Tourism Cooperation and the Industry Council, that the spend is much better served for the economy if it is out there in the private sector, and that will offset any reductions in revenues to the Ministry of Finance.
GRAUE: Alright so now you've put together your final recommendations, everyone's agreeing, you'll put them forward to the government, what do you expect their response to be and in what kind of timeframe could changes take place?
VAIIMENE: We are looking to see some of these regulatory changes put through very quickly. There are some finer details to be looked into by the likes of our Crown Law Office, and once the finer details are ironed out we should look to in the next at least a month before those become final, and then we can communicate with our trade partners what this new regulatory framework will look like. The exemptions for crews crew should be faster or easier to implement, and exempting international cruise ship passengers will take a few more weeks. But it is a swift response by the government and by government agencies to put these recommendations together, and the review of this framework has actually been spearheaded by Cabinet and by government so we expect these recommendations to roll our fairly quickly.