With just a brief two-year transition period from 1 July 2016, the Modern Award System (MAS) will take effect on Norfolk Island from 1 July 2018, representing the largest single impact on the Norfolk Island economy at a time of declining visitor numbers (-11% in last 3 months), severe economic contraction, and on top of a raft of new Federal and local Government taxes, rates, fees and charges.
Despite repeated warnings of loss of employment, severe increase in business costs, reduced business viability, and damage to tourism, the Department of Regional Development & Cities (DIRDC) has not conducted any economic assessment, which many consider to be reckless, even irresponsible.
Damage to Tourism, Norfolk Island’s dominant industry
Within the Retail sector, the published modeling indicates a massive 35.5 % hike in business employment costs from 2017-8 to 2018-9. Within the Accommodation sector, the hike in employment costs exceeds 40%. Net revenue is forecasted to decline by 33% over a 3-year period.
Cafes and restaurants may impose surcharges, cut opening times, replace experienced workers with juniors or close their doors. With a small, finite market, it may not be viable to stay open, particularly on penalty days, which are also be flight days. Larger tours operators will curtail employment on flight days, reducing the number of available tours. This will diminish the tourism experience.
Minimum shift periods of 6 hours designed for high traffic urban environments are not appropriate for the island, where commute time is 5 minutes and many jobs are naturally short duration, such as airport bus transfers, servicing a hotel room, airport security, or airport welcome services for visitors.
Businesses will be forced to pay for hours not even worked, reducing productivity and raising costs.
Federal Government Response.
The Administrator of Norfolk Island (Mr Eric Hutchinson), the Federal Minister for Territories (Minister John McVeigh), the Federal Member of Parliament for Canberra representing Norfolk Island (Senator Gai Brodtmann), have all remained silent, despite the dire warnings.
The NSW Business Council (NSWBC), Australian Business Lawyers (ABL), the Accommodation Association of Australia (AAoA), and Tourism Accommodation Australia (TAA) have each offered to assist in various ways, but ultimately the Federal Government Minister for Territories or Fair Work Commission needs to urgently suspend the MAS until an assessment can be completed.
NUG comprises a cross section of local community organisations, including the Norfolk Island Chamber of Commerce, Accommodation and Tourism Association, and the Mental Health Awareness Group, supported by the Norfolk Island People for Democracy, and Council of Elders.