New Caledonia: financial support of 37 million euros from the State

In great financial difficulty, New Caledonia will benefit from exceptional state aid to complete its annual budget

New Caledonia: financial support of 37 million euros from the State

In great financial difficulty, New Caledonia will benefit from exceptional state aid to complete its annual budget. This envelope, amounting to 37 million euros, should make it possible to “avoid a break in the payment of pensions and allowances paid to people with disabilities and dependency”, explains, in a press release, the high- police station of the Republic in New Caledonia, equivalent to the prefecture. It specifies that the aid “will also be used to support the hospital sector in difficulty”.

The president of the New Caledonian government, from an independence party, Louis Mapou, requested financial support from the State last April, New Caledonia being very in debt since the health crisis and risking the cessation of payments by at the end of the year.

This financial support will be paid in installments, upon decision of the State and depending on the implementation of reforms, in particular on the sustainability of health insurance, the local retirement fund and the disability and loss of autonomy regime. A committee, which will meet monthly, will be responsible for monitoring the implementation of this aid and the requested reforms.

The Congress of New Caledonia adopted a timetable of reforms in May 2022, which should notably make it possible to increase the tax yield for 2023 by around 275 million euros. But the texts are struggling to be adopted, due to lack of consensus between the political groups. In a report published at the beginning of August, the territorial chamber of accounts regretted that "few measures had been voted on and that programming had fallen behind schedule", while the New Caledonian government had massive recourse to borrowing (580 million euros between 2020 and 2022) to deal with the Covid crisis, causing the territory to reach “the limits of its solvency”.