News Desk: As Niue faces mounting economic pressure from rising global and regional costs, Prime Minister Dalton Tagelagi has ruled out a cost-of-living adjustment (COLA) for now, citing fiscal constraints and the need for continued subsidies to support the island’s population.

In a rare, wide-ranging interview with BCN News, PM Tagelagi acknowledged the increasing financial burden on households, particularly as shipping costs spike following a recent price hike by U.S.-based freight carrier Matson. The Prime Minister confirmed that the government will renew its shipping agreement with Matson in the coming weeks, despite the added cost pressures.

“There is no poverty in Niue,” Tagelagi stated, “but we are not immune to the global cost-of-living crisis. We feel the flow-on effects from price increases in New Zealand, where we import most of our goods.”

The decision not to implement COLA comes at a time when small island nations across the Pacific are grappling with the ripple effects of global inflation, exacerbated by supply chain disruptions and increased freight charges. Niue, a self-governing Pacific island in free association with New Zealand, relies heavily on imports from Auckland, making it particularly vulnerable to external price fluctuations.

Instead of direct income support, Tagelagi emphasized the government’s ongoing subsidy programs as a primary method of relief—covering electricity, water, free healthcare, and schooling. He acknowledged the strain these subsidies place on the national budget but maintained that they remain critical for protecting low-income families.

The Prime Minister urged the Price Control Board and private sector stakeholders to collaborate in managing price volatility and shielding the public from further economic shocks.

“The public can help by understanding the government’s predicament,” he said, calling for unity in addressing the broader economic challenges.

While the Prime Minister ruled out COLA in the short term, the situation remains fluid as Niue, like other small island states, continues to navigate a difficult global economic landscape—one increasingly defined by external dependencies and the vulnerabilities of import-reliant economies.