Part II. The Australian Government’s Role
[This article first appeared in The Norfolk Islander and on Norfolk Online News, 20 August 2016]
In Part I ( HERE ) we considered political, economic and governmental aspects of this matter from an “on the ground on Norfolk Island” perspective. This week we consider the other side of the equation: the role of the Australian Government.
Norfolk Island’s infrastructure
Prior to 1979 the Australian Government, through the Administrator, was responsible for all matters relating to Norfolk Island including the island’s infrastructure. Some of these responsibilities were transferred to the Norfolk Island Government in the Norfolk Island Act 1979 which made provision for a limited form of self-government for the island, and was based on the idea of partnership between the two governments.
However that idea seems to have had a very short honeymoon. Promised reviews of the workings of the Act did not occur. The Island’s Administration was not permitted to use debt or bond financing for development without the Commonwealth’s permission, and this was never forthcoming. The Commonwealth did itself however provide two loans: for the Cascade Cliff Safety Project (1990s, ~$3.1m) and for the Airport Reseal (2006, ~$11.5m).
In the 1990s it became apparent to the Norfolk Island Government (NIG) that diversification away from tourism would be an important strategy, and a number of government-backed and private enterprise initiatives for revenue-raising projects were proposed. These invariably were denied by either the Norfolk Island Administrator or the Commonwealth.
These initiatives included: the minting of Norfolk Island coinage, exchangeable at full value for Australian currency (1993-94); establishment of an offshore financial/banking centre on the island (1997, 2010); proposal to develop a small-scale offshore commercial fishery in the Norfolk Island exclusive economic zone (2010-14); establishment and location on Norfolk Island of an appropriately structured Australian International Shipping Register (2013-14). On two occasions the Norfolk Island Government issued licences under Norfolk Island law for the cultivation and harvest of medicinal cannabis but on both occasions the licences were cancelled by the Administrator on instruction from Commonwealth Minister (2014, 2015). However the Commonwealth did provide tied funding for some capital projects over these years including the Water Assurance Scheme (1980s), and the Waste Management Centre (2002-03).
Given this background it is not surprising that the island’s infrastructure is now run down. The Australian Government must bear substantial responsibility for that fact. (And indeed, if it had provided some appropriate technical assistance over these years the ‘airline problem’ might well have been avoided.)
“If all you have is a hammer…”
It was the American psychologist Abraham Maslow who half a century ago surmised that “If all you have is a hammer, everything looks like a nail”. This unimaginative approach has characterised large swathes of the Australian Government’s policies and actions, and those of the Department of Infrastructure and Regional Development (DIRD), towards Norfolk Island in recent years.
It shows several characteristics. One is encapsulated in the oft-repeated phrase “Norfolk Island is just the same as an Australian country town”. This is a lazy belief, and analysis shows that it is very important ways it is false (1). However it enables politicians, bureaucrats, and indeed others, to impose well-worn formulaic prescriptions and standards on Norfolk Island without further thought. This approach underlies the determination of the level of medical services to be provided on Norfolk in future, and is threatened in the wholesale application of Australian and New South Wales regulatory standards. More egregious in terms of island culture is the opening of the island to unlimited Australian immigration.
A second characteristic is a more directly ideological one, namely that whatever the economic problem, a free market approach will provide the best solution to it. However the assumptions under which this ‘theorem’ of economics has meaning are not met on small islands. Furthermore it discounts the notion of community which is of great important in small societies, and ignores the importance of a government buffer against the wide swings of uncertainty experienced by small islands (2). A prime example of the Commonwealth’s failure to comprehend such subtleties is provided by DIRD’s decision on the privatisation of pharmaceutical provision – and possibly GP services – on Norfolk Island (3).
A consequence of these characteristics is that criteria of judgment are limited to what is provided within their own sphere of action. There is a tendency to believe that one has all the answers; to not feel obliged to pursue evidence because the answer is already known; and to look merely for faults in the other’s position (the “It’s a failure” syndrome). Public and community opinion can be ritualised and sidelined (4). And judgments made can be reaffirmed by talking only to those on the ground who agree with you.
What all this leads to is distrust. This is exacerbated by such things as the remarkable evidence that DIRD required a private contractor to rewrite a report on aged care on Christmas and Cocos Islands sixteen times before it was accepted (5). Even more remarkable is the experience of the modeling of the Norfolk Island economy commissioned by DIRD initially in 2006. The report from this study was suppressed by DIRD who opposed FoI requests for its release for eight years on the grounds that it would be “contrary to the public interest” (6). When in 2014 a new report from the same consultants using the same CGE economic model was commissioned and released, lo and behold the results were more advantageous to the view that the Commonwealth’s intervention on Norfolk Island would provide positive benefits to the island. A review of the two reports by an independent expert in the UK determined that not only was the type of model used inappropriate for application to such a small economy as Norfolk’s, but that there was inadequate information available publicly to decide on the relative merits of the two sets of results, and that in any case the models took no account of economic inequality (7).
Alternative opportunities
When one is prepared to move away from the mindset of “This is a failure and we the Australian Government must fix it”, from “What do we understand?” to “What’s in their best interests?”, from a perspective of ownership to one of development, then new possibilities arise. Here are five for starters (not including those already referred to, some of which might be worth revisiting):
– Explore what it is that makes the arrangements between New Zealand and its Pacific dependencies so agreeable to both parties, and apply some of that reasoning to Norfolk Island;
– Examine the case of the Falkland Islands, an economically successful British Overseas Territory with internal self-governance, and find what lessons may be applicable to Norfolk Island;
– Make an annual payment to Norfolk Island as rental for the benefits received by the Commonwealth from the island’s location, strategic value and Exclusive Economic Zone;
– Permit the Norfolk Island authorities to reintroduce customs duties on some selected imported products;
– Envision Norfolk Island not as ‘part of New South Wales’, but as a world-relevant semi-autonomous model system of twenty-first century sustainable living.
Conclusion
In 2014 the Commonwealth Minister referred an inquiry into future economic development on Norfolk Island to the Joint Standing Committee on the National Capital and External Territories. However the major recommendations from its final report did not deal with economic development, but with governance, and in particular the abolition of the democratic structures in place on the island since 1979. In this the Committee went far beyond its terms of reference and beyond the terms on which these issues had been discussed with the public: the implicit assumption apparently being that democracy and economics are co-extensive, or alternatively that democracy is a sub-category of economics. Such assumptions are based on ignorance. One person one vote is a different construction from one dollar one vote.
Norfolk Island has in recent years become the plaything of Australian political and bureaucratic ideologues. The conduct of the Commonwealth has been to a large degree characterised by a failure of intellect and imagination which has rendered many of their judgements questionable where not actually faulty.
In 2015 the Australian Government was faced with a choice: give Norfolk Island and its Legislative Assembly a hand in putting the island back on its financial feet, or destroy it and reconstruct it in Australia’s own image. Sadly they appear to have chosen the latter, going against a worldwide trend in relation to the governance of sub-national island jurisdictions. Geoffrey Robertson QC pointed to it as a “heavy-handed act of regression” (8). In a subsequent article we will look at how the Australian Government went about this process and what the consequences have been and will likely be for the Norfolk Island community.
References
(1) “Why Norfolk Island is not an Australian country town”, The Norfolk Islander and Norfolk Online News, 25/06/16; (2) “Norfolk Island Regional Council and the proposed ‘Core Principles’”, idem, 31/10/2015; (3) “Norfolk Island health services and the pitfalls of privatisation”, idem, 16/07/2016; “Some simple economics that the Australian Government seems to have forgotten – or doesn’t want to know”, idem, 09/07/2016; (4) “The Norfolk Island Advisory Council process is a disgrace to Australia”, idem, 16/01/2016; (5) Towell, N., “APS department orders report to be rewritten 16 times”, The Canberra Times, 15/04/2015. After two years of suppression the original draft report is now available following an FoI process; (6) Belot, H., “Uncensored audit report of Norfolk Island’s economy must be released, tribunal”, The Canberra Times, 11/06/2015; (7) “Norfolk Island reform scenarios – comparing the two CIE reports”, The Norfolk Islander and Norfolk Online News, 28/11/2015; (8) Robertson, G., “The recolonisation of Norfolk Island is a heavy-handed act of regression”, The Guardian, 23/04/2016.
References 1-4 and 7 available at: http://www.norfolkonlinenews.com/chris-nobbs.html
*Dr Chris Nobbs is an economist and social commentator currently resident on Norfolk Island, where he was born.
Chris Nobbs
