Tough Times In The Pacific As Customers Rally To Support Friends And Family

As many Pacific countries start to feel the economic burn of Covid-19, ANZ customers in New Zealand and Australia have rallied to send money home to family and friends.

With borders still shut across the Pacific, the tourism economies of Fiji, Cook Islands, Vanuatu, Samoa and to a lesser extent Tonga have not had any leisure travellers since April.

Several income streams have collapsed to zero; including the in country spend by tourists on domestically produced goods and national airlines revenue from leisure travellers. The stimulus from consumer demand, investment and government expenditure, which is supported by tourism activity, has been significantly impacted.

News of a vaccine brings hope, but naturally, the duration of the international border shutdown is the key. The longer it lasts, the deeper the pain will be.

“With the impacts of Covid-19 really starting to take effect, it’s important that we keep costs low to encourage money flows into the islands."

Tessa Price, ANZ Regional Executive for the Pacific.

One small beacon of light has come in the form of remittances – the money that families and friends abroad send back home.

“Private inward transfers to Fiji and Samoa for the first seven months of this year is holding at the 2019 levels and this is supporting household disposable income and consumer demand”, says ANZ Pacific Economist Kishti Sen.

“Given that remittances can sometimes account for up to 25% of a households’ income in the Pacific, this flow of money becomes even more significant.”

“Remittances don’t only support household budgets, they help pay for imports and as a result, ease the pressure on a nation’s foreign reserves.”

“In 2019 for example, 12,200 Pacific people worked in Australia under the Seasonal Worker Program remitting nearly AUD110m back to their families. For some countries such as Tonga, the net income remitted rivalled the direct aid provided by the Australian government.”   

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In an effort to encourage these money flows into the Pacific, ANZ introduced a temporary waiver of its $7 international money transfer fee for online foreign currency payments made from Australia and New Zealand into ten Pacific countries.*

The results of the fee waiver have been encouraging.

In the first month since introduction of the fee waiver, ANZ customers made more than 8,000 transfers, totalling almost NZ$15m.

In that same month, the number of online money transfers from New Zealand to the Pacific increased by 86 percent and transfers from Australia increased by 77 percent, compared to the same period last year.

“With the impacts of Covid-19 really starting to take effect, it’s important that we keep costs low to encourage money flows into the islands”, said ANZ Regional Executive for the Pacific, Tessa Price.

 “I encourage our Pasifika customers in Australia and New Zealand to take advantage of the fee waiver which will run until the end of February 2021.”

In 2019, ANZ customers in Australia and New Zealand made over 40,000 online transfers to the Pacific in 2019, totaling more than NZD$85 million.

* ANZ customers in Australia and New Zealand can send money electronically with no ANZ transfer fee, using ANZ Internet Banking (from both Australia and New Zealand) and the ANZ GoMoney App (from New Zealand only), until the end of February 2021.

The waiver applies to any foreign currency international money transfer sent from Australia and New Zealand to the following Pacific countries: Cook Islands, Fiji, Kiribati, New Caledonia, Papua New Guinea, Samoa, Solomon Islands, Tonga, Timor Leste and Vanuatu. Usual foreign exchange rates and terms and conditions will still apply. For certain currencies, a correspondent bank may charge a fee for processing the payment to the beneficiary bank and the beneficiary's bank may charge the beneficiary fee(s) for receipt of the payment. Additional fees may also apply when using an ANZ Credit Card. For more information and full terms and conditions, please visit www.anz.com/imt