New Caledonia In Financial Strife – Budget Minister
Article – RNZ
“We can no longer afford to ensure the smooth operation of New Caledonia due to substantial loss of tax revenues and social contributions.”
Patrick Decloitre, Correspondent French Pacific Desk
New Caledonia’s local government budget minister says the territory is trying to get emergency money from France due to financial troubles.
One of the factors is believed to be the ongoing civil unrest that broke out on 13 May, which caused most of the French Pacific entity’s public sector employees not being able to pay their social contributions.
The crisis is compounded by a recurrent shortage of cashflow, making local authorities unable to pay their employees as well as their usual suppliers.
Public broadcaster NC la 1ère reported New Caledonia’s local government budget minister, Yannick Slamet, told a Congress standing committee on Friday: “We can no longer afford to ensure the smooth operation of New Caledonia due to substantial loss of tax revenues and social contributions.”
He said talks were underway with the French government in a bid to secure emergency funds to the tune of €260 million.
The rescue package would be used to help New Caledonia implement just-announced financial assistance to those who have totally or partially lost their jobs as a result of massive destruction and damage, caused by riots, to local companies (one third of the requested assistance) and the rest would help fill the immediate cashflow gap.
Last week, New Caledonia’s President Louis Mapou sent a request in similar terms to French President Emmanuel Macron.
So far, France is reported to have agreed to contribute only part of the requested amount, but on the condition that New Caledonia’s government implements stringent cost cuttings.
Another French concession would be that an earlier massive French loan in 2023 (to enable New Caledonia to stay financially afloat after the Covid crisis) could be turned into a grant.
At the time, the French-agreed package amounted to some €37 million Euros, already tied at the time to the implementation of necessary reforms to New Caledonia’s social security system.
Between 2020 and 2022, during the global Covid crisis, New Caledonia has borrowed a total of over €500 million.
As a more recent compounding factor, the violent and destructive riots, especially in the Greater Nouméa Area, put at least 7000 employees out of their jobs due to the destruction, arson and looting of over 500 businesses and companies.
The total damage to New Caledonia’s economic fabric is well beyond one billion Euros, the local Chamber of Commerce estimated earlier this month.
Content Sourced from scoop.co.nz
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