Cook Islands says a misunderstanding has led to NZ freezing development funding

The Cook Islands government says a misunderstanding over consultation requirements is behind New Zealand’s decision to freeze millions in aid.

In a statement, the Cook Islands Ministry of Foreign Affairs and Immigration (MFAI) says, “there has been a breakdown and difference in the interpretation of the consultation requirements” in the 2001 joint agreement.

The statement was in response to New Zealand’s Foreign Affairs Minister Vaovasamanaia Winston Peters pausing $18.2 million in development assistance planned for the Cook Islands’ 2025/26 financial year.

The freezing of funding stems from a lack of consultation with New Zealand following an agreement between the Cook Islands and China earlier this year.

It's understood that $10 million of the paused funding was for core sector support, which represents four per cent of the Cook Islands’ domestic revenue.

A spokesperson for Peters tells PMN the funding was for “financial assistance directly to the Cook Islands budget, which relies on a high-trust environment”.

Cook Islands Prime Minister Mark Brown, left, and Foreign Affairs Minister and Deputy Prime Minister Winston Peters in Rarotonga. 8 February 2024 Photo: RNZ Pacific / Eleisha Foon

According to the spokesperson, the “decision was taken by Minister Peters in early June, and communicated at the time via letter to Cooks’ Prime Minister Mark Brown.”

PMN News understands that the Cook Islands government had anticipated this funding cut and had adjusted its budget accordingly, knowing that core sector support would not be included.

The Cook Islands News was first to report on the funding issue when it was briefly mentioned by the Public Accounts Committee in its Report on the Review of the Appropriation Bill 2025/2026, which was tabled in the Cook Islands Parliament this week.

In the statement released Thursday, the Cook Islands says it highly values New Zealand’s development assistance and reaffirms its commitment to restoring the high-trust relationship that has benefitted both peoples.

“That there has been a breakdown and difference in the interpretation of the consultation requirements committed to by the two governments in the 2001 Joint Centennary Declaration (JCD), is an issue that the Cook Islands is determined to address as a matter of urgency,” the Cook Islands’ statement reads.

“Constructive dialogue is ongoing, and the Cook Islands remain committed to engaging closely with New Zealand to understand where their concerns lie and how they can be addressed.”

A former policy analyst for ex-Cook Islands Prime Minister Henry Puna is concerned that New Zealand’s decision to pause funding for the Cook Islands could bring the island nation closer to China.

William Numanga describes the fallout as a “family conflict” rather than a failure of diplomacy.

“You could be pushing us closer to China by pushing us away and I think there is a potential for that,” Numanga tells PMN News.

Numanga says Peters has escalated the disagreement between himself and Prime Minister Brown.

William Numanga worked as an analyst for the Cook Islands Party for over five years. Photo/Supplied

“Peters has taken it further, he has taken it to the next level by threatening with the funding [pause],” Numanga says.

“It can be seen from the Cook Islands side as an overreaction and I think what it potentially could do is force people to come back to the table and to sit down and iron out their differences and hopefully we can move forward.”

Green MP Teanau Tuiono criticises the use of development funding as leverage for diplomatic expectations.

He tells PMN News that the funding pause would negatively impact health and social services in the Cook Islands and raised questions about the timing of the decision.

“Why now? We have the Prime Minister of New Zealand in China, just about to meet the Premier of China. What was the political calculation to make the call to freeze funding right at this particular time while the Prime Minister is in China and about to walk in and have discussions with the Premier of China?”

New Zealand Prime Minister Christopher Luxon has completed his visit to Shanghai and will now meet with Chinese President Xi Jinping and Premier Li Qiang in Beijing.

Green MP Teanau Tuiono. Photo/PMN News/Joseph Safiti

Tuiono believes the funding pause should be debated in the Cook Islands Parliament to support the independence and self-determination of its people.

“We don't want to shake off the yoke of colonisation of New Zealand to put on the yoke of colonisation of China or anybody else.”

As the Cook Islands approaches 60 years of self-governance in free association with New Zealand, Numanga notes the irony of heightened tensions as celebrations draw near.

Numanga argues that New Zealand should stop treating the Cook Islands as a “younger brother that needs to get in line”.

“The Cook Islands is maybe a bit tired of being perceived as the little kid that is still growing up, and maybe it's time for New Zealand to say, ‘hey, how can we work together, strengthen that partnership’ rather than New Zealand telling us what to do.

“I think that's where a lot, maybe that's where a lot of the sentiments are from the Cook Islands government and obviously from the officials and how they perceive New Zealand. That's why this relationship has gotten to this point.”