The Tonga New Zealand Business Association would like the NZ government and business to support its proposal for joint venture scheme.
The proposal could get on the agenda when Tongan Prime Minister Dr Fred Sevele visits New Zealand in mid May. Comment on the proposal has been sought from NZ Minister of Foreign Affairs and Trade, Murray McCully.
An April RSE investment seminar, based on the Recognized Seasonal Employment scheme in the Hawkes Bay, is an indicator that seasonal workers in Marlborough and other regions could play a role in developing the sort of joint ventures the JOVE scheme anticipates.
Pousima Afeaki, Nuku’alofa, Tonga Islands based chair of the Tonga New Zealand Business Association (TNZBC) has already won some support from the NZ Pacific Business Council, which has circulated the JOVE proposal for comment.
The Tongan proposal is that a scheme be established to encourage New Zealand companies to set up joint-ventures in the Pacific, beginning with the Kingdom of Tonga as the pilot.
Afeaki, a commerce graduate from Victoria University of Wellington, former staff member of the Commerce Commission, financial journalist and now a Tongatapu farmer and trader received the Afeaki matapule title in 2008, which assigns him leadership obligations.
The TNZBC says the peoples of New Zealand and the Pacific Islands will mutually benefit from an increase in understanding of cultural similarities and differences through the process of working together in JVs.
For the Pacific Islands, the urgent need is to create jobs through investment in the private-sector. Pacific Island countries do not have money or expertise to do so on their own. TNZBC say the cost is social unrest resulting from the inability to create enough jobs for young and aspiring populations.
In the March 2009 background to the JV-encouragement (JOVE) scheme, the TNZBC said part of New Zealand’s aid to assist developing Pacific Islands is aimed at developing sustainable economic growth This includes helping the private-sectors in Pacific Island countries to grow and create jobs.
The JOVE proposal “aims to provide an effective way for New Zealand to help the private-sectors of Pacific Island countries grow and create jobs”.
The private sectors of developing Pacific Island countries do not have access to sufficient funding or expertise to make use of the opportunities that exist in areas such as agriculture, fishing, processing of agricultural and marine products, processing of forestry resources, tourism and hospitality.
New Zealand companies have world-class experience in all of these areas. If offered the right incentives, New Zealand companies would invest in joint-venture operations in the Pacific TNZBC says.
Incentives under the JOVE scheme could include a combination of cash/direct and non-cash/indirect incentives.
Cash/direct incentives could include a contribution towards the cost of a feasibility study conducted by a New Zealand company into setting up a JV in the Pacific.
Non-cash/indirect incentives could include:
- accelerated depreciation charges in New Zealand for investment/capital costs of the JV;
- credit in New Zealand for tax paid on JV profits in the Pacific;
- JV losses able to be written off in New Zealand as well as in the Pacific;
- R&D costs able to be written off in New Zealand as well as in the Pacific.
New Zealand Trade & Enterprise and the NZ-Pacific Business Council would be able to conduct research into the type and combination of incentives which would encourage New Zealand companies to invest in JVs in the Pacific says TNZBC.
Incentives under the JOVE scheme could include a combination of cash/direct and non-cash/indirect incentives.
Cash/direct incentives could include a contribution towards the cost of a feasibility study conducted by a New Zealand company into setting up a JV in the Pacific.
Non-cash/indirect incentives could include:
- accelerated depreciation charges in New Zealand for investment/capital costs of the JV;
- credit in New Zealand for tax paid on JV profits in the Pacific;
- JV losses able to be written off in New Zealand as well as in the Pacific;
- R&D costs able to be written off in New Zealand as well as in the Pacific.
TNZBC says New Zealand Trade & Enterprise and the NZ-Pacific Business Council would be able to conduct research into the type and combination of incentives which would encourage New Zealand companies to invest in JVs in the Pacific.
For the Pacific Islands, the benefits from JVs with New Zealand companies would include:
- improved access to funding;
- improved access to expertise;
- development of products for export and for import-substitution;
- widen access to overseas markets;
- creation of jobs.
For New Zealand, the benefits would include:
- initial supply of goods and services to set up JV operations;
- ongoing supply of goods and services to the JV operations;
- maintaining and increasing preference for New Zealand goods and services in the Pacific;
- increase trading opportunities for New Zealand;
- repatriated profits.
New Zealand Trade & Enterprise has developed some advisory materials for New Zealand businesses looking at setting up JVs in other countries. TNZBC suggest New Zealand Trade & Enterprise could administer the JOVE scheme in the Pacific through its network of Trade Commissioners, and through the New Zealand High Commissions/Embassies in Pacific Island countries where there are no Trade Commissioners.
In Tonga, the New Zealand High Commission and the Tonga-New Zealand Business Association (TNZBA) could be the initial contact point for New Zealand companies looking for JV partners under the JOVE scheme. TNZBA is very happy to assist New Zealand companies to find and establish relationships with the right partners.
By Anthony Haas, This e-mail address is being protected from spambots. You need JavaScript enabled to view it