[Norfolk Island, South Pacific, Saturday 20 February 2016, 08:00am]

President of the Norfolk Island Accommodation and Tourism Association (ATA) Rael Donde expresses serious concern that the Norfolk Island economy is on the verge of collapse. This situation is caused by the sudden and substantial changes being introduced on the island by the Australian Government and the continuing uncertainty regarding their detail, described by Mr Donde as ‘reckless and irresponsible’. These views are expressed in a letter from the ATA to the Minister for Territories, Local Government and Major Projects, Hon Paul Fletcher, now published in The Norfolk Islander.

Tourism is Norfolk Island’s only major industry, accounting for 71 per cent of all businesses and 68 per cent of all private sector employment, according to Australian Bureau of Statistics figures.

The Australian Government has recently embarked on a process of transitioning Norfolk Island from the status of an external territory with a limited form of self-government, to that of a regional council modelled on those in the State of New South Wales: a process to be completed by 1 July 2016. This is against the wishes of the majority of Norfolk Islanders.

Mr Donde points out that the transition being implemented by the Australian Government will increase taxation, superannuation contributions from businesses, capital gains tax, and see substantial increases in regulatory compliance costs. These will lead to substantial price rises and further depress the already-depressed island economy.

Mr Donde says that the same unresolved issues he raises in his present letter were raised by the ATA with the previous Minister over six months ago and to which no reply was ever received. The ongoing uncertainty has serious implications for Norfolk Island and makes business planning impossible.

With less than five months to go to the proposed transition completion, Mr Donde points to several significant and still unresolved issues, including:

o very large impact of any introduction of mainland award pay rates, particularly for weekends and public holidays;
o uncertainty in the impact of federal income tax (the Commonwealth having reneged on an earlier written agreement for a phased introduction of income taxation);
o the removal of the Norfolk Island Tourism Manager and the lack of a replacement;
o lack of any announced short-term economic stimulus policy for Norfolk Island;
o the lack of serious engagement by the Australian Government with the local tourism industry concerning policy directions and the resolution of outstanding issues.

Mr Ian Kiernan, manager of the island’s major supermarket notes: “There is undeniably uncertainty throughout the business community on Norfolk Island. We are trying our best to identify and understand the myriad of changes coming into effect from 1 July 2016, but limited interaction with the various Australian Government Departments has so far been inadequate. Economic collapse is certainly a possibility.”

Letter at: http://welcometonorfolkisland.com/ata-letter-to-commonwealth-minister-responsible-for-norfolk-island/
Chris Nobbs, an independent commentator, Norfolk Island, Rael Donde, President, Norfolk Island Accommodation and Tourism Association (ATA)