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Tuesday, 14 August 2012
Page: 5222


Senator HUMPHRIES (Australian Capital Territory) (19:57): I rise to talk tonight about a subject about which I am sure you know a little as well, Acting Deputy President Pratt—that is, Norfolk Island. Norfolk Island is a very beautiful Australian external territory in the Pacific Ocean. It is an absolutely gorgeous place to visit, is a place with lush vegetation and a very charming lifestyle, and is a place that has a great deal of heritage and history. The settlement at Kingston on Norfolk Island was established in 1788, the same year that Sydney was established, and much more of the early buildings and infrastructure of that period exists than does in Sydney.

I regret to tell the Senate that there is trouble in paradise. Norfolk Island is in very significant difficulties of an economic kind. Evidence of this is that the permanent population of the island has dropped from about 1,844 in 2007-08 to about 1,507 in January of this year. It is clear that many residents of the island are leaving in order to seek employment elsewhere, often in mining, as a result of the collapse of the local private sector. Unemployment is increasing as businesses on the island are cutting back employment and many businesses are folding.

Those who have been there will be aware that the major industry of Norfolk Island is tourism, but tourist numbers have decreased significantly in recent years, from about 40,000 a few years ago to about 25,000 last financial year. The average tourist stay is seven nights, but the number of visitors to the island over the last few weeks, even given a relatively long stay, has fallen to below 200 per week in the most recent set of statistics. I ask senators to consider the implication. Here is a small community supported substantially by tourism: a population of about 1,500 people supported by about 200 visitors a week does not add up to a very bright economic picture. In fact, 71 per cent of business income on the island and 68 per cent of private sector employment is derived from tourism related businesses. Clearly, there is a significant problem.

So serious is this problem that the Norfolk Island government's budget for 2012-13 could more accurately be described as a budget for 2012 because it has only produced written figures, a documented budget, for the first six months of this financial year. It has such uncertainty about what will happen in the second half of the financial year it has not been able to produce a complete picture for the entire financial year. It has looked in the past and is looking again at the moment to the Australian government to see what assistance it can provide to a community which is in serious trouble. It seems to me there is very little doubt that some assistance will again have to be considered for the island as the number of business failures increases, the population drops and other signs of serious economic and social dislocation manifest themselves.

There is some hope in sight for residents of Norfolk Island. In March last year the Minister for Regional Australia, Regional Development and Local Government, Simon Crean, signed an agreement with the Chief Minister of Norfolk Island, David Buffett, which was called the Norfolk Island Road Map. That agreement was designed to provide some change in outlook for the island by strengthening its economic diversity and in turn providing some support for an economy, for its social cohesion and resilience and therefore for the other things that make the island such a valuable place to live. That document essentially foreshadowed integrating the Norfolk Island tax system and welfare system more closely into Australia's, something which has not been the case throughout this island's independent history for much of the last 200 years. But what is concerning to me and others who observe affairs on the island is that it appears the road map process has ground to a halt. I am aware that the government of Norfolk Island and the government of the Commonwealth have been in discussions about this matter, but the fact remains that it is not entirely clear why the road map process has come to a halt. What is very clear is that, without some progress on this or some other reform for the island, the outlook for the island's economy and therefore for its community is very bleak indeed.

I am not used to quoting Labor members of other parliaments, but the ALP member of the Norfolk Island Assembly described the situation on the island as:

Parlous, desperation, uncertainty, lack of confidence.

He has also said:

People who have had to split up their families by going offshore to work and sending money back. I know there are people who have simply closed up their homes here on the island and abandoned them because they can't sell them, there's no resale market.

A businessman on the island, Mr Brad Forrester, has said:

This little island's in a state of recession. And a lot of people are finding it very difficult to make ends meet.

The Chief Minister, David Buffett, has said:

I worry, we all worry—that's part of the difficulty of this community at this moment. It's tremendous stress for each member of the Norfolk Island community.

There are other consequences of the failure to make progress on the road map. One of them, to give an example, is the effect of the carbon tax on Norfolk Island. The carbon tax is levied on freight fuels. Everything that arrives on the island comes either by boat or plane. Anything that comes from Australia is affected by those higher fuel charges, but the compensation that the Australian government has engineered for Australian citizens through the tax system of course is not available to citizens of Norfolk Island because they do not pay Australian taxes. They pay island taxes, but they are not part of the Australian income tax system so they are potentially seriously disadvantaged. When you go to the island and see that a litre of unleaded fuel costs $2.50 and a litre of fresh milk costs more than $7, it is not hard to realise that those higher freight costs can be a very serious exercise in compromising the standard of living of people on the island.

My appeal tonight is for the parties here, the Australian government and the Norfolk Island government, to work quickly to find solutions to this problem. The road map is a good basis on which to provide relief to the island and to produce some optimism for its economy, but the road map seems to be experiencing a road block. It is incumbent on both sides to remove that road block as soon as possible. Until that happens I expect there will be more business failures, more people leaving the island and greater uncertainty for a part of the world which I think deserves a better outlook than it presently is facing.