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Norfolk Island Legislation Amendment Bill 2015



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ISSN 1328-8091

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BILLS DIGEST NO. 102, 2014-15 12 MAY 2015

Norfolk Island Legislation Amendment Bill 2015 Cathy Madden Politics and Public Administration Section

Contents

The Bills Digest at a glance ................................................... 3

Purpose of the Bill ............................................................... 4

Structure of the Bill ............................................................. 4

Background ......................................................................... 5

Governance arrangements ...................................................... 6

Prior to self-government ....................................................... 6

Current arrangements ........................................................... 6

Recent developments ............................................................ 8

Current proposal ................................................................... 9

Committee consideration .................................................. 10

Selection of Bills Committee.................................................. 10

Senate Standing Committee for Scrutiny of Bills ................... 10

Policy position of non-government parties/independents ... 10

Position of major interest groups ....................................... 11

Financial implications ........................................................ 12

Statement of Compatibility with Human Rights .................. 12

Key issues and provisions................................................... 13

Schedule 1—Interim arrangements ...................................... 13

Part 1, Division 1—Amendments to the Norfolk Island Act 1979 .............................................................................. 13

Schedule 1, Part 1, Division 2—Amendments to other legislation .......................................................................... 16

Schedule 1, Part 2—Transitional provisions for the interim transition period ................................................... 16

Schedule 2—Final Arrangements .......................................... 17

Part 1, Division 2—Amendment of other legislation .......... 18

Date introduced: 26 March 2015

House: House of Representatives

Portfolio: Infrastructure

Commencement: Items 1-4 on the day the Act receives Royal Assent. Schedule 1 Part 1 and Schedule 2 Part 2 commence on a day to be fixed by proclamation or if the provisions have not commenced within six months of Royal Assent on the day after the end of that period. Schedule 1, Part 2 and Schedule 3 on the day after the Act receives Royal Assent. Schedule 1, Part 3 on the later of the commencement of provisions covered by Schedule 1 Part 1 and the commencement of Schedule 1 of the Acts and Instruments (Framework Reform) Act 2015. Schedule 2, Part 1 commences on 1 July 2016.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website.

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Health ................................................................................ 19

Welfare .............................................................................. 20

Migration ........................................................................... 20

Schedule 2, Part 2—Transitional provisions ........................ 21

Concluding comments ....................................................... 21

Appendix : List of selected inquiries relating to Norfolk Island ................................................................................ 22

Royal Commission ............................................................... 22

Parliamentary reports ......................................................... 22

Government reports ............................................................ 22

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The Bills Digest at a glance Norfolk Island (NI) was accepted as an Australian external territory in 1913. Under arrangements introduced in 1979 Norfolk Island has had partial self-government in which the Norfolk Island Government is required to deliver many federal, state and local services. Australian taxation, migration, health and welfare services do not extend or only partially extend to NI.

The Norfolk Island Legislation Amendment Bill 2015 has been introduced to radically overhaul the governance arrangements that currently operate on NI.1 Over many years a series of parliamentary and government reports have shown that NI is facing a critical financial situation, with forecast deficits for each of the next three financial years of between $7.4 and $7.8 million and that Norfolk Islanders receive services well below the standard that mainland Australians receive.2 This legislation is an outcome of a report by the Joint Standing Committee on the National Capital and External Territories (the Committee), Same Country: Different World, tabled in October 2014.3 The Committee concluded that governance and economic reforms must occur together in order to ensure that NI is sustainable. This Bill starts the transition of NI from a self-governing territory to a modern local government type authority.4 The Bill abolishes the NI Legislative Assembly and Executive Council and replaces them with a NI Advisory Council appointed to support the transition to an elected NI Regional Council. The Regional Council is to commence on 1 July 2016. New South Wales (NSW) laws will apply on NI from 1 July 2016 and that State will deliver services and administer laws following agreement between NSW and the Commonwealth. The Bill also starts the process of extending Australian legislation to NI, in particular social security, Medicare, Pharmaceutical Benefits Scheme and taxation measures, again to commence from 1 July 2016.

The NI Government has in principle welcomed the extension of Australian health and welfare measures but does not support the governance arrangements as recommended by the Same Country: Different World report and the implementation of the recommendation through this Bill.

1. Parliament of Australia, ‘Norfolk Island Legislation Amendment Bill 2015 homepage’ Australian Parliament website, accessed 11 May 2015. 2. Department of Infrastructure and Regional Development, ‘Note 1.3 Going Concern’ in The Australian National Audit Office independent report of Norfolk Island’s financial statements 2012/13, ANAO, 10 December 2013, accessed 11 May 2015. 3. Joint Standing Committee on the National Capital and External Territories, Same country: different world: the future of Norfolk Island,

Canberra, October 2014, accessed 16 April 2015. 4. Ibid., p. 41.

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Purpose of the Bill The purpose of the Norfolk Island Legislation Amendment Bill 2015 (the Bill) is to amend the Norfolk Island Act 1979 (the NI Act) to reform the governance arrangements on Norfolk Island (NI).5 During the interim transition period an Advisory Council will be established to support the transition of the NI Legislative Assembly to the NI Regional Council, which will have local and municipal responsibilities but not powers usually exercised by state or national governments. The Bill provides for consequential amendments to numerous Acts, including omitting references to the territory of NI, extending legislation to NI and amending or repealing relevant definitions.

The package of Bills also proposes to integrate NI with the Australian tax and social security systems, including access to Medicare and the Pharmaceutical Benefits Scheme. Australian immigration, customs and quarantine services will also be extended to NI. These services are proposed to commence from 1 July 2016. The other Bills are:

• Tax and Superannuation Laws Amendment (Norfolk Island Reforms) Bill 20156

• A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Amendment Bill 20157

• Health and Other Services (Compensation) Care Charges Amendment (Norfolk Island) Bill 20158

• Health Insurance (Approved Pathology Specimen Collection Centres) Tax Amendment (Norfolk Island) Bill 20159

• Health Insurance (Pathology) (Fees) Amendment (Norfolk Island) Bill 201510

• Private Health Insurance (Risk Equalisation Levy) Amendment (Norfolk Island) Bill 201511 and

• Aged Care (Accommodation Payment Security) Levy Amendment (Norfolk Island) Bill 2015.12

These Bills are discussed in two separate Bills Digests.13

Structure of the Bill The Bill is divided into three schedules.

Schedule 1 provides for interim arrangements for Norfolk Island with Part 1, Division 1 amending the NI Act and Division 2 amending other legislation; Part 2 contains transitional provisions and Part 3 amendments contingent on the Acts and Instruments (Framework Reform) Act 2015 (Cth).

Schedule 2 provides for the final arrangements for Norfolk Island: Part 1, Division 1 relates to amendments to NI Act; Division 2 relates to other legislation; Part 2 relates to transitional provisions. Schedule 3 provides for statistical information by amending the Census and Statistics Act 1905 (Cth).

5. Norfolk Island Act 1979 (Cth), accessed 6 May 2015. 6. Parliament of Australia, ‘Tax and Superannuation Laws Amendment (Norfolk Island Reforms) Bill 2015 homepage’, Australian Parliament website, accessed 8 May 2015. 7. Parliament of Australia, ‘A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Amendment Bill 2015’, Australian Parliament website,

accessed 8 May 2015. 8. Parliament of Australia, ‘Health and Other Services (Compensation) Care Charges Amendment (Norfolk Island) Bill 2015 homepage’, Australian Parliament website, accessed 5 May 2015. 9. Parliament of Australia, ‘Health Insurance (Approved Pathology Specimen Collection Centres) Tax Amendment (Norfolk Island) Bill 2015

homepage’, Australian Parliament website, accessed 5 May 2015. 10. Parliament of Australia, ‘Health Insurance (Pathology) (Fees) Amendment (Norfolk Island) Bill 2015 homepage’, Australian Parliament website, accessed 5 May 2015. 11. Parliament of Australia, ‘Private Health Insurance (Risk Equalisation Levy) Amendment (Norfolk Island) Bill 2015 homepage’, Australian

Parliament website, accessed 5 May 2015. 12. Parliament of Australia, ‘Aged Care (Accommodation Payment Security) Levy Amendment (Norfolk Island) Bill 2015 homepage’, Australian Parliament website, accessed 5 May 2015. 13. B Pulle and K Swoboda, Tax and Superannuation Laws Amendment (Norfolk Island Reforms) Bill 2015 [and] A New Tax System (Medicare Levy

Surcharge—Fringe Benefits) Amendment Bill 2015, Bills digest, 99, 2014-15; A Biggs and A Grove, Aged Care (Accommodation Payment Security) Levy Amendment (Norfolk Island) Bill 2015 [and associated Health and Aged Care Bills], Bills digest, 98, 2014-15, Parliamentary Library, Canberra, 2015, both accessed 11 May 2015.

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Background NI had a population of about 2,300 people in 2011, according to the most recent census.14 At the time of the 2011 census, 38.4 per cent of ordinarily resident population were of Pitcairn descent and 60.8 per cent were not of Pitcairn descent.15 At the census date, approximately twenty per cent were visitors, suggesting a resident population of approximately eighteen hundred Island residents. The population has a disproportionately high number of senior residents, possibly reflecting pattern of migration to the mainland by younger workers.16

The 2014-15 Budget update indicates the fiscal position of NI. The NI Government is reliant on the funding agreement with the Commonwealth Government of up to $7.5 million, subject to certain milestones being achieved, to ensure that the NI Government budgeted expenses of $39.66 million can be met. The majority of NI budget is derived from the activities of Government Business Enterprise (49 per cent),17 Commonwealth subsidy (18 per cent) and GST (NI tax measure) income (16 per cent).18

The 2014-15 Budget for the service delivery areas indicate:

2014-15 Revenue 2014-15 Expenses

$28,756,869 $36,254,979

Source: Norfolk Island Government, Community budget update 2014-15, p. 5.

The independent report on Norfolk Island Financial statements by the Australian National Audit Office (ANAO) has indicated that NI would have deficits for the three years of: $6.4 million in 2015-16, $5.5 million in 2016-17 and $5.5 million in 2017-18. The report indicated that NI would not be able to sustain itself financially.19

Tourism has traditionally been the main economic driver on NI. Many recent reports have noted the downturn in tourism which has impacted negatively on NI economy. The NI Tourist and Transport Forum indicates that tourism accounts for 41 per cent of the Gross Island Product on NI but tourist numbers had reduced markedly over the last decade.20

In December 2014, Gary Hardgrave, the Administrator of Norfolk Island, released a report by the Centre for International Economics on the impact of the proposed reforms on the NI economy. The report found that combined, income tax, social security payments and Medicare will increase economic activity on the Island by around 14 per cent.21

The Australian Citizenship Act 2007 (Cth) extends to NI, as external territories are included in the definition of Australia.22 While Norfolk Islanders are entitled to enrol to vote in Australian federal elections, they are not obliged to do so like other Australian citizens.23

The NI Government has national (such as immigration, welfare, quarantine), state (such as legislative assembly, education, police) and local (such as roads, waste management, planning) responsibilities.

The NI Government operates its own social security system under the Social Services Act 1980 (NI) and its own health care scheme, the NI Healthcare Scheme.24 The Scheme established under the Healthcare Act 1984 (NI) and the Healthcare Levy Act 1990 (NI), is a medical fund to assist with the payment of medical expenses for the

14. Administration of Norfolk Island, Census of population and housing, 30 November 2011, p. 6, accessed 16 April 2015. 15. Administration of Norfolk Island, Addendum to the Norfolk Island 2011 census report, 17 January 2012, p. 2, accessed 16 April 2015. 16. Census, op. cit., p. 8. 17. The Norfolk Island Administration (NIA) has a number of government business areas, which serve to contribute essential, non-essential and

profit-generating services to the community and administration. Examples include Norfolk Telecom, Norfolk Energy, Airport, and Electricity. 18. Norfolk Island Government, Community budget update 2014-2015, 19 December 2014, pp. 1-3, accessed 16 April 2015. 19. Department of Infrastructure and Regional Development, Australian National Audit Office independent report of Norfolk Island’s financial

statements 2013/14, 14 November 2014, p. 4, accessed 22 April 2015. 20. NI Tourism and Transport Forum (TTF), Submission to the Joint Standing Committee on National Capital and External Territories, Inquiry into the economic development on Norfolk Island, 14 April 2014, accessed 16 April 2015. 21. Centre for International Economics (CIE), Economic impact of Norfolk Island reform scenarios, November 2014, p. 3, accessed 16 April 2015. 22. Australian Citizenship Act 2007 (Cth), sections 3 and 11, accessed 11 May 2015. 23. Commonwealth Electoral Act 1918 (Cth), subsections 95AA, 101(1A), 101(5A), 245(1). Residents of Norfolk Island who are Australian citizens

have the option to vote in a federal state electorate they have connection to or the electorate of Canberra, ACT or Solomon in the Northern Territory. 24. Social Services Act 1980 (Norfolk Island), accessed 5 May 2015.

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residents of NI.25 NI residents are not eligible to receive Medicare benefits or Pharmaceutical Benefits. The NI Government provides free infant, primary and secondary schooling on the Island, based on the NSW education system. NI operates its own immigration regime under the Immigration Act 1980 (NI).26

Australian income tax and other federal taxes are not payable on Norfolk Island. Instead, the NI Government levies a range of local taxes, including GST, and imposts but it does not tax wealth or income.

NI takes its own censuses, independently of those taken by the Australian Bureau of Statistics which does not cover the island.

Governance arrangements

Prior to self-government NI has operated in an unusual and complex legislative and governance framework, as has been outlined in previous Bills Digests relating to NI.27 By virtue of section 122 of the Constitution, the Australian Parliament is authorised to make laws:

… for the government of…any territory placed by the Queen under the authority of and accepted by the Commonwealth, or otherwise acquired by the Commonwealth… 28

In 1975 a Royal Commission, headed by Sir John Nimmo, was established to investigate the future status of NI and its constitutional relationship to Australia. Its report was tabled in the Australian Parliament in November 1976. Its key recommendations were to:

• give full Commonwealth voting rights to Norfolk Island residents

• replace the then Norfolk Island Council with an elected Assembly to act like a local government, although not necessarily on the same terms as applicable on the mainland, and even, in some respects, like a state government

• extend mainland services and obligations, notably health services, justice administration, education, social security and taxation, to Norfolk Island residents and

• apply all Commonwealth legislation to Norfolk Island with the exception of immigration, customs, telephone and postal services.29

The federal government’s response to the report, while generally not accepting of the recommendations, led to the enactment of the Norfolk Island Act 1979 (Cth).

The constitutional position of NI as a territory of Australia was confirmed in 1976 when the High Court in a unanimous decision decided that NI is part of Australia, a fact disputed by some residents of NI, mainly of Pitcairn heritage.30

Current arrangements The Norfolk Island Act 1979 (the NI Act) establishes a limited form of self-government for the Island. The Act established the NI Government, composed of an Administrator (and Deputy Administrator(s)), a Legislative Assembly, an Executive Council and a public service. NI is administered by an Administrator who must approve all Bills passed by the NI Legislative Assembly before they become law.31 The Preamble to the Act states that it

25. Healthcare Act 1989 (Norfolk Island) and Healthcare Levy Act 1990 (Norfolk Island), accessed 11 May 2015. 26. Immigration Act 1980 (Norfolk Island), accessed 11 May 2015. Norfolk Island Administration, Norfolk Island annual report 2013-14, The Administration, NI, 2014, pp. 60, 66, and 67, accessed 6 May 2015. 27. S Brennan, Norfolk Island Amendment Bill 1999, Bills digest, 11, 1999-2000, Parliamentary Library, Canberra, 1999 and MA Neilsen, Territories

Law Reform Bill 2010, Bills digest, 158, 2009-10, Parliamentary Library, Canberra, 2010, accessed 13 April 2015. 28. Constitution, accessed 11 May 2015. 29. J Nimmo, Report of the Royal Commission into matters relating to Norfolk Island, Australian Government Publishing Service, Canberra,

October 1976, accessed 11 May 2015. 30. Berwick Ltd v Gray (1976) 133 CLR 603, accessed 12 May 2015. 31. NI Act, section 21.

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was the Commonwealth Parliament’s intention that NI achieve over a period of time internal self-government as a territory under the authority of the Commonwealth.32

NI is administered by the Administrator, appointed by the Governor-General (effectively the Commonwealth Government). In forming certain opinions required under the Act, the Administrator must rely on his or her own judgement. In all other respects, the Administrator acts on advice. That advice comes from a variety of sources depending on the category of matter involved. In some instances, the Administrator is the senior representative of the Commonwealth on the Island, acting on the advice of the Minister for Territories. In other situations, the Administrator fills a role akin to the vice-regal function of a State Governor, acting on the advice of the NI Executive Council or Legislative Assembly (both discussed immediately below). Finally, in some situations the Administrator refers matters to the Governor-General, who in turn acts on the advice of the Commonwealth Government.33

The NI Act creates an Executive Council ‘to advise the Administrator on all matters relating to the government of the Territory’.34 Members of the executive (that is, Ministers) are appointed from the Legislative Assembly by members of the Assembly, and have authority over matters listed in Schedules 2 and 3 of the NI Act. There are currently four Ministers of the NI Government.35

The NI Act also invests the Legislative Assembly with the power ‘to make laws for the peace, order and good government of the Territory’.36 There are nine members of the NI Legislative Assembly, elected at a minimum every three years.37

The legislative power of the Assembly is plenary (with four defined exceptions),38 but the Commonwealth retains a significant influence over NI laws. The NI Act divides the legislative functions and responsibilities of the Assembly into Schedule 2, which includes matters normally performed by state and local governments, and Schedule 3, which covers matters normally reserved for the Commonwealth, such as customs, quarantine, immigration and social security. Every law made by the Legislative Assembly is presented to the Administrator for Assent. Laws about matters listed in Schedule 2 are at the heart of NI self-government, because the Administrator assents or not to such laws on the advice of the Executive Council (the NI Government) and the instructions of the Commonwealth Minister (if any). In assenting to Schedule 3 laws, the Administrator is subject to over-riding instructions from the Commonwealth Minister. Where a law relates to a matter in neither Schedule 2 nor 3, the Administrator reserves the law for the attention of the Governor-General (who will act on the advice of the Commonwealth Government).39 The Governor-General also has the power to make ordinances for the Island and to introduce legislation into the Assembly.40

Commonwealth legislation only applies in NI if the Commonwealth Act expressly says so.41

Part VII of the NI Act provides for the NI judicial system which includes a Supreme Court. Other courts and tribunals for NI may be established by or under enactment.42

The NI Assembly and Government have powers far beyond those of the Australian states. They control not only what falls within state jurisdiction but also social security, taxation and immigration and settlement, subject to limited oversight by the Commonwealth. NI’s immigration regime is distinct from that applicable throughout the remainder of the Commonwealth. The Commonwealth’s Migration Act 1958 has no application on NI. Instead immigration, including immigration by Australian citizens from other parts of Australia, is regulated by the NI Immigration Act 1980.

32. NI Act, Preamble and Part II—Administration. 33. Ibid.

34. Ibid., section 11. 35. Ibid., section 12; Norfolk Island Fourteenth Legislative Assembly, Administrative arrangements order, 20 March 2013, accessed 7 May 2015. 36. Ibid., section 19. 37. Ibid., section 31 and 35. 38. Acquisition of property otherwise than on just terms, raising defence forces, coining money, and euthanasia: see NI Act, section 19. 39. Ibid., section 21. 40. Ibid., sections 26 and 27. 41. Ibid., section 18. 42. Ibid., sections 52 and 60.

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Recent developments NI legislative, financial and governance arrangements have been the subject of many government and parliamentary reports, including a number examining the financial sustainability of the Island. Most of these reports have called for reforms to NI’s administration, law, governance, and electoral and financial structures.43 It has been clear through the various inquiries and reports that the NI Government is not able to fulfil the range of federal, state and local responsibilities for which it currently has responsibility. Most importantly, it has not been able to provide an adequate social safety net for its residents, resulting in significant consequences for community health and welfare. For example, in 2006 the Australian Government had announced that the NI governance arrangements were financially unsustainable and needed to be replaced with some form of self-government involving greater Commonwealth control or a form of local government.44 The Government did not proceed on the basis of the ‘assurances of the Norfolk Island Government that it will continue its program of economic and financial reform and that it will seek to improve the transparency and accountability of governance on the island.’45

However one of the most significant of these reports, Quis Custodiet ipsos custodes? Inquiry into Governance on Norfolk Island,46 led to the enactment of the Territories Law Reform Act 2010 (Cth).47 That Act amended the NI Act to implement a contemporary financial and governance management framework that ensured public accountability through finance and performance audits, access to an Ombudsman, protecting the disclosure of personal information to public agencies and the availability of merits review of decisions which affect rights and entitlements. Amendments also extended the Australian Government’s oversight of NI legislation to include Schedule 2 matters, as well as enable the Commonwealth Minister and Governor-General to introduce legislation into the NI Legislative Assembly.48

The changes to financial management and accountability required the NI Minister for Finance to prepare annual financial statements at the end of each financial year in relation to the administration and territory authorities and provide it to the Commonwealth Auditor-General, who must prepare an audit report on the financial statements. The audit report is provided to the Finance Minister, the responsible Commonwealth Minister and the Administrator.49

The amendments also provided that the Administrative Appeals Tribunal Act 1975 (Cth) and the Freedom of Information Act 1982 (Cth) apply to NI; enabled the Commonwealth Ombudsman to assume the function of the NI Ombudsman under NI legislation; and that the Privacy Act 1988 (Cth) applies to the NI public sector.

In 2011 the Norfolk Island Road Map, an agreement between the Commonwealth and NI governments, outlined a number of reform objectives:

Governance through providing a stronger, more open and transparent form of government, building on the reforms in the Territories Law Reform Act 2010;

Economic development through quick action to address barriers to tourism, particularly reform of air services, access to the Island, and facilities for cruise ships;

Enabling the Norfolk Island Public Service to provide good financial and policy advice and effective services to the Norfolk Island Government and community;

Social services including immigration … removing barriers to business investment ...;

43. See Appendix 1 for a list of selected reports and inquiries. 44. J Lloyd (Minister for Local Government, Territories and Roads), New governance arrangements for Norfolk Island, media release, 20 February 2006, accessed 20 April 2015. 45. J Lloyd (Minister for Local Government, Territories and Roads), Norfolk Island governance arrangements, media release, 20 December 2006,

accessed 20 April 2015. 46. Joint Standing Committee on the National Capital and External Territories, Quis custodiet ipsos custodes? Inquiry into governance on Norfolk Island, Canberra, December 2003, accessed 20 April 2015. 47. Territories Law Reform Act 2010, accessed 12 May 2015. 48. MA Neilsen, op. cit. 49. NI Act, subsections 48B(2), 48B(3), 48C(1), 48C(3).

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Access to the benefits provided by the Australian tax system and a fair contribution to the tax system in return for the benefits; and

Extend[ing] Commonwealth laws to the Island to promote improved economic growth and diversification. 50

The Road Map’s objectives were to ensure that residents of NI can access a similar range and quality of basic services as those available to other Australians living in rural and remote communities.

In a report on a visit to NI in 2013, the Joint Standing Committee on the National Capital and External Territories (the Committee) noted that while progress continued on the implementation of the Road Map the ‘economy of Norfolk Island and the finances of the Norfolk Island Government will remain in a state of crisis and decline without fundamental reform to the governance and economy of Norfolk Island’.51 The report also noted a number of milestones since the Road Map’s signing, including relaxation of immigration controls with the introduction of an Unrestricted Entry Permit for all Australian and New Zealand citizens upon arrival and the option to apply for residency.52

Current proposal During the 2013 election campaign the Coalition made an election commitment to integrate NI into Australia’s taxation, social security and health arrangements.53

In tabling the Australian National Audit Office report on NI financial statements in 2014, the Assistant Minister for Infrastructure and Regional Development, Jamie Briggs, noted:

The ANAO has now forecast unfunded budget deficits for the Norfolk Island government in future years of between $7.4 million and $7.8 million…The ANAO has also found there is a lack of proper financial controls and poor financial management practices in the Norfolk Island administration, and has concluded that without further Commonwealth support, the administration is not a 'going concern'…

… the Norfolk Island Government seems to lack the capability to address many of the key sustainability issues facing the island. 54

In March 2014 the Australian Government referred to the Committee an inquiry into economic development on Norfolk Island. While the focus was to be on economic development the Committee found it necessary to also examine governance matters. The Committee found that ‘sound governance underpins any discussion of economic development...this is especially the case given the increasingly dire fiscal situation that the Norfolk Island Administration finds itself in’.55 The Department of Infrastructure and Regional Development submission painted a bleak summary of the state of NI due to infrastructure failures, reduced revenue capacity, services below standard and the continued lack of investment.56

The recommendations of the bipartisan report, Same Country: Different World: The Future of Norfolk Island, resulted in the introduction of this legislation.57 The key recommendation was:

That as soon as practicable, the Commonwealth Government repeal the Norfolk Island Act 1979 and establish an interim administration to assist the transition to a local government type body..(Recommendation 1)

50. On 2 March 2011 the Norfolk Island Road Map was agreed between S Crean (Minister for Regional Australia, Regional Development and Local Government) and D Buffett (Chief Minister of the Norfolk Island Government), p. 4. 51. Joint Standing Committee on the National Capital and External Territories, Report of the visit to Norfolk Island: 29-30 April 2013, Canberra, May 2013, p. 13, accessed 20 April 2015. 52. Ibid., pp. 6-9. 53. M Keenan, A better way for Norfolk Island, media release, 5 September 2013, accessed 13 April 2015. 54. J Briggs (Assistant Minister for Infrastructure and Regional Development), ‘Ministerial statements: Australian National Audit Office: Norfolk

Island Financial Statements’, House of Representatives, Debates, 27 March 2014, p. 3355, accessed 20 April 2015. 55. Joint Standing Committee on the National Capital and External Territories, Same country: different world: the future of Norfolk Island, op. cit., p. 7. 56. Department of Infrastructure and Regional Development, Submission to the Joint Standing Committee on the National Capital and External

Territories, Inquiry into economic development on Norfolk Island, 13 May 2014, accessed 16 April 2015. 57. Joint Standing Committee on the National Capital and External Territories, Same country: different world: the future of Norfolk Island, op. cit.

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The Government’s response to the report noted the strong mood for reform within the community with most individuals, including some members of the Legislative Assembly, acknowledging there needs to be some change to the model of self-government. The Government however indicated that the NI Government's preferred model of modified self-government would continue to see the NI both legislate for and administer state and municipal services, with the Commonwealth taking on national services only, such as immigration, customs and quarantine. The Government indicated it did not favour this approach as it would not address the governance and economic issues that have negatively impacted the NI community and economy over time. The Commonwealth Government has committed to high levels of consultation with NI Government and residents on the reforms.58

The Bill proposes to introduce the changes to the governance arrangements over two stages.

Firstly, an interim transition period in which the Government proposes to abolish the NI Legislative Assembly, with legislative power being conferred on the Governor-General. The statutory office of the Administrator will continue. During the interim period an Advisory Council, with representatives from the local community, will be established to provide advice to the Administrator. The Administrator will be assisted by a new position of Executive Director, who will be responsible for the day-to-day running of the NI Administration. The Explanatory Memorandum (EM) makes it clear that the responsible Commonwealth Minister will have overarching supervisory powers in relation to the NI Administration and existing NI body corporates. During the interim transition period powers and functions under existing NI laws will be conferred on the responsible Commonwealth Minister who can delegate the powers and functions.59

The second or “final” phase will be the establishment of the elected NI Regional Council. The NI Regional Council will have local and municipal responsibilities. The laws of NSW will apply on NI and the State, through arrangements with the Commonwealth, will supply state services to the Island. The Commonwealth will provide national type services through the extension of Australian taxation, migration, social security and health services.

According to the EM, the final governance arrangements and the applied law regimes will be similar to those operating on Cocos Keeling Islands and Christmas Island.60

Committee consideration Selection of Bills Committee The Senate Selection of Bills Committee resolved that the Norfolk Island Legislation Amendment Bill 2015 not be referred to a Committee.61

Senate Standing Committee for Scrutiny of Bills At the time of writing the Senate Standing Committee for the Scrutiny of Bills had not made any comments in relation to any of the Bills in the package of Bills.

Policy position of non-government parties/independents The Labor Opposition has indicated support for these changes. The Shadow Parliamentary Secretary for External Territories said:

We absolutely concur, and we are determined to assist you in that process. You have rightly pointed out that the Australian government will not be introducing welfare benefits without the obligation of the Australian taxation system, and we concur with your position. We also concur with your observation that Australians should be treated the same, no matter where they live.

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58. Joint Standing Committee on the National Capital and External Territories, Same Country: different world: the future of Norfolk Island Government response, February 2015, accessed 20 April 2015. 59. Explanatory Memorandum, Norfolk Island Legislation Amendment Bill 2015, p. 4, accessed 11 May 2015. 60. Ibid., p. 5; Christmas Island Act 1958 (Cth), accessed 11 May 2015. 61. Selection of Bills Committee, Report No. 4 of 2015, The Senate, Canberra, 26 March 2015, accessed 23 April 2015. 62. W Snowdon, ‘Ministerial statements: Australian National Audit Office: Norfolk Island Financial Statements’, House of Representatives,

Debates, 27 March 2014, p. 3359, accessed 20 April 2015.

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The member for Canberra, the default parliamentary representative for NI residents, has shown support for the new governance arrangements as a means of protecting the human rights of the residents of NI through access to opportunity, equality and fairness. However there is some opposition from within the ACT Labor Party where John Stanhope, former ACT Chief Minister and administrator of Christmas Island, is fighting to have a motion of support for the continuation of self-government passed by the Branch Council.63

The policy position of other non-government parties/independents was not known at the time of writing.

Position of major interest groups The NI Government, members of the Legislative Assembly and NI residents and business people have provided their views on the Same Country: Different World report and the legislation. Most agree in principle on the need for reform, particularly in the areas of the economy, infrastructure and the extension of Australian taxation, social security and health benefits to NI but do not agree with the new governance model. The NI Chief Minister has stated that:

The Norfolk Island Government welcomes the introduction of the Australian Commonwealth social security and taxation systems including Medicare and PBS. This has been a promise to the Norfolk Island community since 2010. The Norfolk Island Government unreservedly rejects the proposal to remove self-government from the island and abolish the Legislative Assembly, the Norfolk Island community’s elected representative body…

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The 2010 legislation drew criticism from the NI Government as discussed in its submission to the inquiry on the Bill:

The Norfolk Island Government recognises in principle the need for changes but the draft provisions largely do not address the changes required and essentially do not improve the situation on Norfolk Island. It is an inappropriate way to move forward. 65

The NI Government’s preferred model for self-government was submitted to the Commonwealth Government by the 13th Legislative Assembly in July 2011 and re-affirmed by Motion of the 14th Legislative Assembly on 9 May 2013.66 It was discussed with Minister Briggs on his visit to NI in February 2014 and formed part of the NI Government’s submission to the Committee: their preferred model for territory self-governance provides for the current NI institutions to remain.67

Other submissions by people such as Neil Pope, former administrator of NI, described the Legislative Assembly as moribund, and saw the lack of trust fed by vested interests as a major problem. He called for the abolition of the Assembly and the introduction of a local-government type administration. The same approach was echoed by Julian Yates, a former commonwealth public servant with extensive experience in working on areas related to NI:

Governance reform is vital. Limited progress has been made, but much more needs to be done. Norfolk Island should not continue as a self-governing territory: the experience has not worked. The government on Norfolk Island should become a local government, perhaps with some enhanced responsibilities given its remote location, but it ought not to attempt to provide services beyond its financial and technical competence.

68

The NI Government has proposed the holding of a referendum on the issue of future governance arrangements before any legislative change was introduced. The Assistant Minister in response to a petition by 834 NI residents and descendants of the Pitcairn islanders presented to the federal Parliament noted:

63. K Lawson, ‘ACT Labor split on Norfolk Island self-government’, The Canberra Times, 25 February 2015, p. 6, accessed 20 April 2015. 64. L Snell (Chief Minister and Minister for Tourism), Self-government of Norfolk Island, media release, 10 April 2015, accessed 16 April 2015. 65. Norfolk Island Government, Submission to the Joint Standing Committee on the National Capital and External Territories, Inquiry into the Territories Reform Bill 2010, April 2010, p.4, accessed 16 April 2015.

66. L Snell (Chief Minister and Minster for Tourism), Preferred model of self-government, media release, 20 March 2014, accessed 16 April 2015. 67. Same country: different world, op. cit., Appendix D, pp. 103-104. 68. N Pope, Submission to the Joint Standing Committee on the National Capital and External Territories, Inquiry into economic development on Norfolk Island, 11 July 2014; J Yates, Submission to the Joint Standing Committee on the National Capital and External Territories, Inquiry into

the economic development on Norfolk Island, 14 April 2014, accessed 7 May 2015.

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Given the consultation that has already occurred, it is not my intention to call a referendum or plebiscite on the governance arrangements on Norfolk Island. I note the Norfolk Island Legislative Assembly may pass a resolution to direct a referendum and does not require the approval of the Australian Government (the Government). However, on 11 February 2015 the Hon Lisle Snell MLA, the Chief Minister of the Norfolk Island Legislative Assembly, withdrew his intention to call a referendum at this time.

69

Following the introduction of this legislation the NI Legislative Assembly has resolved to hold a non-binding referendum on 8 May 2015 on the question:

Should the people of Norfolk Island have the right to freely determine their political status, their economic, social and cultural development and be consulted at referendum or plebiscite on the future model of governance for Norfolk Island before such changes are acted on by the Australian Parliament. YES/NO. 70

The results of the referendum have shown that NI residents want a say in their future governance model for NI: 624 yes, 266 no and 22 informal.71

It has been reported that the Speaker of the NI Legislative Assembly has opined that the Commonwealth’s Regional Council model will entail a loss of democracy and the Hon Lisle Snell, Chief Minister and Minister for Tourism has said:

The Norfolk Island Government welcomes the introduction of the Australian Commonwealth social security and taxation systems including Medicare and PBS. This has been a promise to the Norfolk Island community since 2010. The Norfolk Island Government unreservedly rejects the proposal to remove self-government from the island and abolish the Legislative Assembly, the Norfolk Island community’s elected representative body’.

72

In contrast, the Administrator for Norfolk Island prepared a paper on community consultations with NI residents following the release of the Same country report. The key finding of the community’s views on the key recommendation was:

Recommendation 1: The repeal of the current Act and the introduction of a new Norfolk Island Act to effect change of governance arrangements is supported by a substantial majority of Norfolk Island residents.

The vast majority of residents believe the 14th Assembly has not acted in the best interests of the people of Norfolk Island. The overwhelming view of the community is the Norfolk Island Legislative Assembly should now be abolished and replaced, after a transitional period to effect changes to the governance structures for service delivery, by a local government type body.

73

Financial implications The EM notes that the total NI reform package is estimated to cost $136.2 million over the forward estimates. Financial arrangements operating at the time the interim transitional period commences will continue to operate.

Statement of Compatibility with Human Rights As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.74

The EM to the Bill notes that the package of Bills engages a number of human rights:

• the right to self-determination

69. J Briggs, ‘Petitions Norfolk Island’, House of Representatives, Debates, 24 March 2015, p. 3245; ‘Petitions Norfolk Island’, House of Representatives, Debates, 1 December 2014, p. 13597, accessed 23 April 2015. 70. L Snell, Matter of public importance, media release, 25 March 2015, accessed 22 April 2015. 71. L Snell (Chief Minister and Minister for Tourism), Norfolk Islanders vote YES at today’s Referendum for the right to have a democratic say at

the ballot box on their future governance arrangements!, media release, 8 May 2015, accessed 11 May 2015. 72. L Snell, Self-government on Norfolk Island, media release, 10 April 2015, accessed 20 April 2015. 73. G Hardgrave, Norfolk Island community consultations: report to Minister, 20 December 2014, accessed 21 April 2015. 74. The Statement of Compatibility with Human Rights can be found at pages 9-13 of the Explanatory Memorandum to the Bill.

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• the rights of minorities

• the right to take part in public affairs and elections

• the right to freedom of movement

• the right to social security

• the right to health

• the right to an adequate standard of living and

• the right to work.

One of the key issues is whether the Bill allows for the human rights and freedoms of the residents of NI, especially the Norfolk-Pitcairn population. Some of this population identify as a people with rights to self-determination under Article 1 of the International Covenant on Civil and Political Rights and Article 1 of the International Covenant on Economic, Social and Cultural Rights. The EM outlines that the proposed measures are a result of extensive consultation and one of the key objectives of the legislation is to provide for sustainable economic and social development of NI, an important aspect of the right to self-determination in maintaining the Norfolk-Pitcairn culture. The EM acknowledges that during the interim arrangements the ability of NI residents to participate in public affairs at the local level will be limited but the final governance arrangements will allow for the NI Regional Council, responsible for local and municipal issues, to be elected by the citizens. Moves to bring NI into Australia’s migration, social security and health arrangements are given as evidence of complying with the right to freedom of movement, the right of everyone to social security and the right of everyone to the highest attainable standard of physical and mental health.75

The EM concludes that ‘The Bill is compatible with human rights because it advances the protection of human rights. To the extent that it may limit human rights, those limitations are reasonable, necessary and proportionate’.76

The Parliamentary Committee on Human Rights has not yet reported on the Bill.

Key issues and provisions As outlined above, significant concerns have been raised by the NI Government and some residents about the proposal to abolish self-government. However the residents of NI have indicated they welcome the benefits that will come with access to Australia’s health and medical services.

Schedule 1—Interim arrangements During the interim transition period, which commences on a day to be proclaimed following the passage of the Bill, the Government proposes to abolish the Legislative Assembly, with legislative power being conferred on the Governor-General. The statutory office of the Administrator will continue. During the interim period, an Advisory Council, with representatives from the local community, will be established to provide advice to the Administrator. This period will enable time for consultation between Australian Government officials and NI residents to prepare for the introduction of Australia’s health, social security and taxation regimes and finalise the final governance model in the form of the NI Regional Council.

Part 1, Division 1—Amendments to the Norfolk Island Act 1979 Item 1 repeals the Preamble to the Act. The Preamble provides a history of the constitutional and legislative arrangements for NI. Within in it the Commonwealth acknowledges that the residents include the descendants of the settlers from Pitcairn Island and recognises their special relationship with NI and their desire to preserve their traditions and culture. The Preamble also states that the Commonwealth recognises that it is desirable for the people of NI to achieve over time, internal self-government. The EM states that ‘the preamble no longer reflects the Parliament’s intention for the governance of Norfolk Island’.77 This legislation abolishes self-government, despite the NI Government’s previous work towards continuous devolution and steady progress to full self-government. As noted earlier in this Digest, the Committee and members of the

75. Explanatory Memorandum, op. cit., pp. 12-13. 76. Ibid., p. 13. 77. Ibid., p. 15.

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Commonwealth Parliament have over a number of years raised the independence of NI as an important issue, and there is a very fiercely held belief among many of the people on the Island that they should be independent.

Item 2 inserts the definition of NI Advisory Council which is to be established during the transition period to support the transition. The item also provides a new definition of Australia which includes the external territories such as NI.

Items 4, 6, 8, 14, 15 and 17 all repeal definitions relating to executive positions previously held in the NI Government, including Chief Minister, Speaker, Deputy Speaker, Executive Council, and Minister.

NI Administrator

Item 20 repeals section 7, the provision that deals with the Administrator’s exercise of executive powers, and substitutes a proposed section 7 and 7A. Proposed section 7 requires the Administrator to exercise powers and functions conferred upon them in accordance with the tenor of his or her Commission and with written directions given by the Commonwealth Minister. The proposed section omits any reference to matters listed in Schedule 2 and 3 about which the NI Government had been able to legislate on, as these schedules are being repealed.78

Proposed subsection 7A(1) allows the Administrator to delegate any or all of his or her powers to the Executive Director, an employee of the Administration, an office holder under an enactment, or an employee of a body corporate established under an enactment. This will ensure that the NI administration is able to continue to perform their normal business during the interim period. Proposed subsections 7A(2)-(6) relate to a delegate complying with written directions from the Administrator or the responsible Commonwealth minister.

Item 21 repeals sections 9 and 10. Section 9 currently allows for the appointment of a deputy or deputies to the Administrator and section 10 provides that an Administrator or Deputy Administrator has to take an oath or affirmation of office before undertaking the duties of the office. Proposed section 9 allows for the Commonwealth Minister to appoint a specified employee of the NI Administration as the Executive Director of Norfolk Island. Subsection 9(2) indicates that the written declaration is not a legislative instrument. The EM states that the role of the Executive Director will be to oversight and manage the NI administration and the territory instrumentalities such as the NI Hospital. He or she will have an immediate role in restructuring the NI Administration and improving the efficiency of the public sector.79 The EM states that during the interim transition period it is anticipated that the responsible Commonwealth minister will delegate spending control to the Executive Director, the Chief Executive Officer of the NI Administration and managers of territory authorities.80 It is unclear how the positions of Executive Director and Chief Executive Officer will operate together as both positions appear to have similar functions. The Chief Executive Officer role is defined under Part 5 of the Public Service Act 2014 (NI).81 The Executive Director and Chief Executive Officer positions are both abolished on the commencement of the final arrangements.

Proposed section 10 provides for the Administrator to engage employees for the Government of NI and on such terms and conditions that the Administrator determines.

Proposed section 10A allows for Commonwealth public service employees or officers and employees of statutory authorities to assist the Administration.

NI Advisory Council

Item 22 repeals Part III of the NI Act which dealt with the establishment and operation of the Executive Council. The proposed Part III establishes the NI Advisory Council. New section 12 establishes the Advisory Council and new section 13 states that the function of the Advisory Council is to advise the Administrator on matters affecting the peace, order and good government of NI. Proposed sections 14-14C outline the membership of the Advisory Council. The Advisory Council will have five members one of which will be Chair; they will be appointed by the responsible Commonwealth minister; the positions will be part-time and will be for a specified period no longer than 12 months. Provisions are made for a person to be appointed acting Chair or acting

78. Schedules 2 and 3 are repealed by item 82 in Schedule 1 of the Bill. 79. Ibid., p. 17. 80. Ibid., p. 5. 81. Public Service Act 2014 (NI), sections 25-36, accessed 11 May 2015.

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member of the Advisory Council if the chair or member is absent or cannot perform the duties of office. Advice from the Department of Infrastructure and Regional Development states that the Advisory Council will be drawn from the NI community; residents will have the opportunity to provide a nomination to the Administrator.82 It is worth noting that this is the intention but is not a legal requirement of the Bill. As a first priority, the Advisory Council will be asked to consider the best model for the future NI Regional Council, to be elected in the first half of 2016, to ensure the highest quality of local services can be delivered to the community.83 The Advisory Council will be abolished on commencement of the final arrangements.

Proposed sections 14D to 14H provide for the responsible Commonwealth Minister to prescribe the remuneration and allowances for Advisory Council members (by legislative instrument); requirements for members to disclose interests in writing; the resignation of Advisory Council members; and the termination of a member’s appointment by the responsible Commonwealth minister. Advisory Council members otherwise hold office on terms and conditions determined by the responsible Commonwealth minister.

The responsible Commonwealth minister may prescribe (by legislative instrument) procedures for the operation of the Advisory Council. New section 14K requires the Advisory Council to keep minutes of meetings. New section 14L allows the Administrator to assist the Advisory Council by way of information, advice or making resources and facilities available. However new section 14M clarifies that the Administrator does not have to obtain advice from the Advisory Council before acting.

Continuation of laws

Item 23 inserts new section 15 which outlines the laws in force during the interim transition period.

Item 26 provides for the continuance of laws in force prior to the interim transition period to continue. The legal regime in NI comprises: Commonwealth statutes that extend to NI; Ordinances made by the Governor-General; enactments of the NI Legislative Assembly; ordinances made under the Norfolk Island Act 1957 (repealed) and Norfolk Island Act 1913 (repealed); consolidated laws of the Island as published in the NSW Government Gazette of 24 December 1913; English statutes in force on 28 July 1828 capable of applying to NI on 14 April 1960 and United Kingdom paramount laws.84

Legislative powers of the Governor-General

Item 28 repeals Divisions 2 and 3 of Part IV of the NI Act which set out the legislative power of the Legislative Assembly (Division 2) and the legislative powers of the Governor-General (Division 3). Proposed Division 2 relates to the legislative powers of the Governor-General. New subsection 19A(1) provides that legislative power for NI will now be conferred on the Governor-General who may make Ordinances for the peace, order and good government of the territory. New subsection 19A(2) indicates that an ordinance is a legislative instrument. Item 33 provides that in cases of inconsistency between regulations and a section 19A Ordinance, the regulations prevail.

Other amendments

Item 34 repeals Part V of the NI Act which established the NI Legislative Assembly. As a result, the Legislative Assembly will cease to exist from the commencement of the interim transition arrangements. Current Members of the Legislative Assembly will not continue in an elected-representative capacity.

Items 35 to 68 contain amendments to the financial provisions of the NI Act. Item 36 repeals subsection 47(4) which relates to revenues that had previously been raised for use for matters listed in Schedule 2 of the NI Act. Items 40-44 amend financial reporting requirements in the NI Act to provide that annual budgets and financial statements are to be prepared by the Administrator not by the NI Minister for Finance. Other amendments are as a consequence of the abolition of the Legislative Assembly and executive positions, such as changing ‘Norfolk Island Minister’ to ‘Administrator’ or repealing provisions that include a reference to the ‘Legislative Assembly’.

82. Department of Infrastructure and Regional Development, ‘Territories: Norfolk Island: FAQs-governance’, Department of Infrastructure and Regional Development website, accessed 21 April 2015. 83. J Briggs (Assistant Minister for Infrastructure and Regional Development) and Senator Z Seselja, Nominations open for Local Advisory Council, joint media release, 23 April 2015, accessed 23 April 2015. 84. G Carney, The constitutional systems of the Australian states and territories, Cambridge University Press, 2006, p. 469.

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Items 72 and 73 allow for the employment of officers for the purposes of government in NI and a person so appointed must uphold the NI Public Service Values. The officers could be employed under NI law or the Public Service Act 1999 (Cth). Item 74 repeals the previous section dealing with grants of land and inserts new section 62 relating to disposal of land.

Item 78 proposes to repeal section 65 which provides for remuneration and allowances for members of the Legislative Assembly and section 66A requiring reports by the Commonwealth Ombudsman to be given to NI Ministers.

Items 79 and 80 amend the regulation-making powers in section 67 of the NI Act to remove references to the NI Legislative Assembly and Schedules 2 and 3 of the NI Act.

Schedule 1, Part 1, Division 2—Amendments to other legislation Items 85 to 183 make amendments to 27 Commonwealth Acts as a result of the changing governance arrangements for NI. For example, these items include:

• repeal definitions of, or references to, a ‘NI Minister’ (such as item 87 Administrative Appeals Tribunal Act 1975)

• extend certain Acts to NI (such as item 90 Administrative Decision (Judicial Review) Act 1977 and item 144 Legislative Instruments Act 2003)

• replace reference to a Minister of NI with the Administrator of NI (item 92 Carbon Credits (Carbon Farming Initiative) Act 2011)

• omits reference to NI from definition of self-governing territories (item 96 Defence Act 1903)

• omit references to the Legislative Assembly of NI (item 117 Freedom of Information Act 1982 and item 183 Transfer of Prisoners Act 1983)

• insert references to a NI body or agency appointed by the Administrator other than under a NI enactment (item 151 Privacy Act 1988) and

• substitute references to the NI Legislative Assembly with references to the NI Advisory Council (item 181 Remuneration Tribunal Act 1973).

Schedule 1, Part 2—Transitional provisions for the interim transition period This Part provides for rules and other matters (such as the transfer of assets and liabilities and employment arrangement for the employees of NI Administration) that apply during the transition from the current arrangements operating on NI to those operating during the interim transition period.

Item 184 provides a list of definitions to apply during this period including a definition of ‘interim transition time’ which means the commencement of Part 1 of the Schedule.

Subitem 185(1) allows the responsible Commonwealth Minister to make (by legislative instrument) rules for the interim transition period. However, subitem 185(2) provides that the rules cannot create an offence or civil penalty along with other matters.

Items 186 and 187 allow for the rights, assets and liabilities of the Executive Council or Legislative Assembly existing immediately before the interim transition period to become the rights, assets and liabilities of the NI Administration. If a minister or members of the Legislative Assembly or the Executive Council held an asset or a liability in that capacity immediately before the interim transitional period then it becomes an asset or a liability of the Administration (items 188 and 189).

Eligible employees as defined in item 193 who were employed by the NI Administration prior to the transition period will become employed by the Administration on the same terms and conditions that operated prior to the interim transition time. The definition is wide ranging to encompass many different types of existing employment arrangements. Provision is made for terms and conditions to be varied. Eligible employees have to adhere to the Public Service Values referred to in section 61A of the NI Act. There will be no immediate change to the employment arrangements within the NI Administration and related entities, and business will continue

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as usual as the services and functions delivered by the Administration will need to continue to support the community.85

Items 194 and 195 specify that the changes made to sections 48B, 48C and 48J of the NI Act, relating to financial statements and annual reports as discussed earlier in this Digest, apply from 1 July 2015 (or a later financial year if necessary).

Item 196 provides that, despite changes made to the Administrative Appeals Tribunal 1975, those sections will continue to apply after the interim transition period as if the amendments had not been made.

Item 197 clarifies that declarations made under the Historic Shipwrecks Act 1976 (Cth) before the interim transition period will continue.

Item 198 provides that changes to the Public Disclosure Act 2013 (Cth) will only apply to conduct that occurs after the interim transition time.

Item 199 provides that an exempt matter, being the operation of these transitional rules including for the transfer of assets and liabilities, does not trigger an obligation to pay a stamp duty or tax under state or territory law. Subitem 199(3) provides that the responsible Commonwealth Minister may certify in writing that a particular matter is an exempt matter for the purpose of this section.

Item 200 provides a ‘constitutional safety net’ covering unjust acquisition of property as a result of changes occurring during the interim transition period.

Part 3 Amendments contingent on the commencement of the Acts and Instruments (Framework Reform) Act 2015

The amendments in Part 3 of Schedule 1 would amend the Legislative instruments Act 2003 as amended by the Acts and Instruments (Framework Reform Act) 2015 (Framework Reform Act).86 Item 12 of Schedule 1 of the Framework Reform Act will (among other things) insert a new section 10 into the Legislative Instruments Act, dealing with instruments that are declared to be legislative instruments. New paragraph 10(2)(c) provides that an Ordinance made under section 27 of the NI Act is a legislative instrument. New section 10 has not yet commenced and a date for its commencement has not yet been proclaimed. Part 3, items 204-206 repeal paragraph 10(2)(c) of the Legislative instruments Act 2003 from the later of the time of commencement of Schedule 1 of the Framework Reform Act and the interim transition time.. Paragraph 10(2)(c) will no longer be required as section 27 of the NI Act will be repealed by item 28 of Schedule 1 of the Bill. However the paragraph continues to apply to ordinances made before the commencement of Part 1 of Schedule 1.

Schedule 2—Final Arrangements The final arrangements will commence on 1 July 2016 and the new governance arrangements for NI will be in place with the election of the NI Regional Council and NSW laws applying to NI. NI judicial arrangements will be preserved.

Part 1, Division 1— Amendments to the Norfolk Island Act 1979

Items 1-24 amend subsection 4(1) of the NI Act to repeal many definitions including those relating to the interim transition period such as Administrator, Advisory Council, Chief Executive Officer and so on. Item 17 inserts a definition of the Norfolk Island Regional Council as a body corporate established under a law in force in the territory. There are a considerable number of options for how the Regional Council might be formed in terms of the numbers of councilors and how voting will be conducted. The Administrator will consult further with the community on the final model ahead of facilitating the transition to the locally-elected Regional Council from 1 July 2016. The NI Regional Council will be modelled on local governments in NSW with some adjustments for local conditions. Following the election of councillors from the community in early 2016, the Regional Council

85. Department of Infrastructure and Regional Development, Norfolk Island reforms: information for Norfolk Island administration employees, Fact sheet, accessed 7 May 2015. 86. Legislative Instruments Act 2003 and Acts and Instruments (Framework Reform) Act 2015, accessed 12 May 2015.

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will commence operations from 1 July 2016. The EM says the Regional Council could be established under NSW law or under an ordinance under the NI Act.87

Item 25 repeals Parts II and III of the NI Act thereby repealing provisions relating to NI Administration and the NI Advisory Council. Item 26 sets out the laws that will be in force in NI at the commencement of the final transition period.

Item 27 inserts new section 18A allowing for the application of NSW laws to NI. Such laws can be amended or repealed by a section 19A Ordinance (subsection 18A(2)). Provision is made for cases of inconsistency (subsections 18A(4) and (5)) and to ensure that provision of NSW law also includes principles of common law (subsection 18A(6)). New section 18B provides that powers vested under the NSW laws to NSW ministers and the NSW Governor are instead vested in the responsible Commonwealth minister who can delegate any such power.

New subsection 18C(1) provides the Commonwealth may enter into an arrangement with NSW for the effective application and administration of the laws in force in NI. This section would allow the Commonwealth to arrange for the NSW Government to deliver services or administer laws in relation to NI.88

Item 28 repeals the entirety of Part VI of the NI Act, which contains provisions relating to Finance.

Item 29 repeals the NI Public Service Values which will be replaced by applied NSW law or equivalent arrangement established under an ordinance.89

Part 1, Division 2—Amendment of other legislation As discussed, the NI Act provides Commonwealth legislation only applies in the NI if there is an express provision in the legislation. The majority of the amendments in this division remove redundant references to the crown in the right of Norfolk Island, which ceases to be an operative concept upon the commencement of the final transition time. The EM provides this Table below.90

Acts being amended to remove redundant references to the crown in the right of Norfolk Island

Acts beginning with letters A-L Acts beginning with letters M-W

Aboriginal and Torres Strait Islander Act 2005

Age Discrimination Act 2004

Agricultural and Veterinary Chemicals Act 1994

Airports Act 1996

Airports (Transitional) Act 1996

Air Services Act 1995

Australian Crime Commission Act 2002

Australian Human Rights Commission Act 1986

Australian Postal Corporation Act 1989

Banking Act 1959

Bank Integration Act 1991

Charter of the United Nations Act 1945

Civil Aviation Act 1988

Civil Aviation (Carriers’ Liability) Act 1959

Copyright Act 1968

Corporations (Aboriginal and Torres Strait

Marriage Act 1961

National Environment Protection Council Act 1994

National Residue Survey Administration Act 1992

National Transmission Network Sale Act 1998

Native Title Act 1993

Olympic Insignia Protection Act 1987

Ozone Protection and Synthetic Greenhouse Gas Management Act 1989

Patents Act 1990

Product Grants and Benefits Administration Act 2000

Productivity Commission Act 1998

Product Stewardship (Oil) Act 2000

Protection of Movable Cultural Heritage Act 1986

Protection of the Sea (Oil Pollution

87. Explanatory Memorandum, op. cit., p. 3. 88. Ibid.

89. Ibid., p. 38. 90. Ibid., p. 39.

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Acts being amended to remove redundant references to the crown in the right of Norfolk Island

Islander) Act 2006

Crimes (Superannuation Benefits) Act 1989

Designs Act 2003

Disability Discrimination Act 1992

Disability Services Act 1986

Financial Sector (Shareholdings) Act 1998

Financial Transaction Reports Act 1988

Fisheries Management Act 1991

Foreign Corporations (Application Of Laws) Act 1989

Fringe Benefits Tax Assessment Act 1986

Hazardous Waste (Regulation of Exports and Imports) Act 1989

Healthcare Identifiers Act 2010

Industrial Chemicals (Notification and Assessment) Act 1989

Insurance Acquisitions and Takeovers Act 1991

Marine Navigation Levy Collection Act 1989

Marine Navigation (Regulatory Functions) Levy Collection Act 1991

Compensation Funds) Act 1993

Sex Discrimination Act 1984

Small Superannuation Accounts Act 1995

Superannuation Contributions Tax (Assessment and Collection) Act 1997

Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997

Superannuation (Self-Managed Superannuation Funds) Taxation Act 1987

Superannuation (Unclaimed Money and Lost Members) Act 1999

Telstra Corporation Act 1991

Termination Payments Tax (Assessment and Collection) Act 1997

Tobacco Plain Packaging Act 2011

Trade Marks Act 1995

Trusts (Hague Convention) Act 1991

Weapons of Mass Destruction (Prevention of Proliferation) Act 1995

There are amendments to other Acts which do more than remove a redundant reference to the crown in the right of NI but the focus here is on those that extend health, migration and welfare to NI.

Health In Part 1 of Schedule 2, items 122 to 125 and 214 to 220 bring NI into Australia’s health system. Items 122 to 125 brings NI under the Dental Benefits Act 2008 (Cth) by among other matters changing the definition of Australia to include NI and inserting a new section 7A into the Act extending the Act to all external territories.91 Item 214 revises the definition of Australia to include NI under subsection 3(1) of the Health Insurance Act 1973 (Cth), while item 217 extends the Act to NI.92 Items 215 and 216 insert new subsections that for the purpose of the definition of patient contribution and for other unspecified health services, that NI is taken to form part of NSW. Items 223 and 224 change the definition of Australia to include NI in section 3 of the Human Services (Medicare) Act 1973 (Cth) and add a new subsection 3B that extends that Act to NI.93

The National Health Act 1953 (Cth) is extended to NI by item 265. Item 306 extends the provisions of the Private Health Insurance Act 2007 (Cth) to NI.94 Items 308 and 309 relate to the commencement for the application of lifetime health cover base day as it applies to residents of NI who have turned 31 before the final transition time.95 Item 310 inserts a new definition of Australia to include NI into the dictionary that covers the Private Health Insurance Act.

91. Dental Benefits Act 2008, accessed 12 May 2015. 92. Health Insurance Act 1973, accessed 12 May 2015. 93. Human Services (Medicare) Act 1973, accessed 12 May 2015. 94. National Health Act 1953 and Private Health Insurance Act 2007, accessed 12 May 2015 95. For more information see A Biggs and A Grove, Aged Care (Accommodation Payment Security) Levy Amendment (Norfolk Island) Bill 2015

[and associated Health and Aged Care Bills], Bills digest, 98, 2014-15, Parliamentary Library, Canberra, 2015, accessed 11 May 2015.

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Welfare Items 51-55 insert new definitions into A New Tax System (Family Assistance) Act 1999 (Cth) and A New Tax System (Family Assistance (Administration) Act 1999 (Cth) to extend those Acts to NI.96

Items 81-91 bring NI into Australia’s child support arrangements.

Item 221 inserts a new definition of Australia which includes NI into section 3 of the Human Services (Centrelink) Act 1997 (Cth) and item 222 extends that Act to NI.97 Item 322 inserts a new section 3AA into the Social Security Act 1991 (Cth) extending the Act to NI.98 Item 325 changes the residency status provisions (by amending paragraph 7(4)(e) to include NI, and therefore makes accessible to NI residents payments under the age pension, disability support pension, bereavement allowance and widow B pension. Items 327, 328, 331 all amend the Act to include NI in the definitions of ‘remote area’ and ‘regional or remote location’. Item 329 changes the definition of Australia to include NI and item 330 amends the definition of external territory to remove NI in section 23 of the Social Security Act 1991 to ensure that NI is considered part of Australia for the purposes of social security law.

Item 334 adds a new section 6B to the Social Security (Administration) Act 1999 (Cth) extending the Act to NI.99

Item 295 and 296 extend the Paid Parental Leave Act 2010 (Cth) to NI and adds NI to the definition of Australia.100

Items 371-376 in Part 2 of Schedule 2 contain transitional provisions to ensure that NI residents will not have retrospective access to entitlements under the extended social security arrangements such as age pension, Newstart allowance, disability support pension and youth allowance. Items 377-381 are transitional provisions that ensure that family tax benefit and single income family supplement cannot be paid for periods before the 1 July 2016. Item 381 allows for early claims of family tax benefit. Item 382 allows for early lodgment of claims for an assessment of child support under the Child Support (Assessment) Act 1989 (Cth) for up to eight weeks before commencement of the final transition time.101

Items 383-388 are transitional provisions that allow for a designated official to be appointed to work out a person’s adjustable taxable income for the purposes of the Child Support (Assessment) Act 1989, the Social Security Act 1991 and the Paid Parental leave Act 2010 and technical issues around determining the tax-exempt income if there is insufficient information and documentation. Item 390 allows for a review of decisions.

Migration Item 249 amends the Migration Act 1958 (Cth) to insert NI into the definition of adjacent area with other states and territories in subsection 5(1), which impacts on how sea installations near NI will be treated.102 Item 250 changes the definition of an excluded maritime arrival. Item 251 amends subsection 7(1) of the Migration Act by including NI in the definition of prescribed territories, which ensures that NI is deemed to be part of Australia and not a place outside Australia.103 Items 252-254 are technical provisions relating to travel between NI for non-Australian citizens resident on NI. Under current arrangements for travel purposes NI is treated as if it were another country, despite it being part of Australia, and flights between NI and other Australian states and territories are processed as international flights. This means all people travelling to or from NI must undergo immigration clearance when arriving in or departing from another Australian state or territory. Currently Australian citizen permanent residents of NI do not require a visa when travelling to Australia as Australian citizens do not require a visa to enter Australia (and this will continue). Permanent non-Australian residents of NI need to apply for a Permanent Resident Norfolk Island visa (PRNIV) on arrival in Australia by presenting a current passport endorsed with their permanent resident of NI sticker that indicates resident status, and a completed

96. A New Tax System (Family Assistance) Act 1999 and A New Tax System (Family Assistance) (Administration) Act 1999, accessed 12 May 2015. 97. Human Services (Centrelink) Act 1997, accessed 12 May 2015. 98. Social Security Act 1991, accessed 12 May 2015. 99. Social Security (Administration) Act 1999, accessed 12 May 2015. 100. Paid Parental Leave Act 2010, accessed 12 May 2015. 101. Child Support (Assessment) Act 1989, accessed 12 May 2015. 102. Migration Act 1958, accessed 12 May 2015. 103. Explanatory Memorandum, op. cit., p. 50.

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incoming passenger card.104 Item 370 contains a transitional provision to provide that non-citizens on NI can be granted visas under the Migration Act to ensure they do not inadvertently become unlawful as a result of the transition.

Item 225 inserts a new definition of Australia to include NI into the Immigration (Guardianship of Children) Act and item 226 inserts a new subsection 4AAC extending the Act to NI.105

Schedule 2, Part 2—Transitional provisions This Part provides for the rules and other matters (such as the transfer of assets and liabilities) that apply during the transition from the interim transition period to the final arrangements. Many of the provisions mirror those applying during the transition to the interim transition period.

Item 356 provides definitions for the purposes of Part 2, Schedule 2 of the Bill. This includes a definition of ‘final transition time’, which means the commencement of Part 1 of Schedule 2—that is, 1 July 2016.106

Items 358-363 provide that at the final transition time the assets and liabilities of the NI Administration will be invested in the NI Regional Council. The Responsible Commonwealth Minister can specify that any asset or liability can be vested in the Commonwealth.107 The records of the Administration will be transferred to the Commonwealth or to the Regional Council (item 366).

Items 368-369 provide that employees of NI Administration employed prior to the final arrangements will be transferred to the NI Regional Council at that time. They will retain the same salary and conditions.

Item 392 is the equivalent provision to item 199 of Part 2 of Schedule 1 relating to exemption from stamp duty and other state taxes.

Items 393 and 394 provide constitutional safety nets in relation to unjust acquisition of property and imposition of taxation.

Schedule 3 allows for the Census and Statistics Act 1905 to cover NI.108 This means that NI will be included in the collection of statistical information, including the census of population and housing conducted by the Australian Bureau of Statistics.

Concluding comments The Norfolk Island Legislation Amendment Bill 2015 has bipartisan support from the major parties. However there seems to be growing disquiet in NI on the extent of the reforms to their governance arrangements which are perceived as reducing their democratic rights. Community consultation and submissions to the Committee inquiry have indicated that many NI residents welcome the introduction of Australia’s health and welfare arrangements as well as further investments in infrastructure and tourism ventures.

The NI residents have shown an overwhelming support for a say on the future model of governance for NI. The referendum is non-binding, but it provides an indication of the level of support and/or disagreement with the proposed reforms, especially the changes to the governance arrangements. Whether it will have any impact on the debate on this legislation remains to be seen.109

The Australian Government has already commenced a community consultation programme with NI residents about the reforms, in particular changes to social security, health and taxation and has also started the process for appointing members of the five-person Norfolk Island Advisory Council, to represent the local community and contribute to reform for Norfolk Island.110

104. Department of Immigration and Border Protection, Immigration arrangements for Norfolk Island, Fact sheet, 59, January 2014, accessed 21 April 2015. 105. Immigration (Guardianship of Children) Act 1946, accessed 12 May 2015. 106. See clause 2, table item 5, of the Bill. 107. Explanatory Memorandum, op. cit., p. 6. 108. Census and Statistics Act 1905, accessed 12 May 2015. 109. L Snell (Chief Minister and Minister for Tourism), Norfolk Islanders vote YES at today’s Referendum for the right to have a democratic say at

the ballot box on their future governance arrangements!, media release, op. cit. 110. J Briggs and Senator Z Seselja, joint media release, op. cit.

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Appendix: List of selected inquiries relating to Norfolk Island

Royal Commission Australia, Report of the Royal Commission into matters relating to Norfolk Island, AGPS, Canberra, October 1976

Parliamentary reports Joint Standing Committee on National Capital and External Territories, House of Representatives

Same Country: Different World: The Future of Norfolk Island, Canberra, October 2014

Report of the visit to Norfolk Island 29-30 April 2013, Canberra, June 2013

An advisory report on the Territories Law Reform Bill 2010, Canberra, May 2010

Norfolk Island Financial Sustainability: The Challenge - Sink or Swim, Canberra, November 2005

Report on the visit to Norfolk Island: 2-5 August 2006, Canberra, September 2006

Norfolk Island: Review of the Annual Reports of the Department of Transport and Regional Services and the Department of the Environment and Heritage, Canberra, July 2004

Quis custodiet ipsos custodes? Inquiry into Governance on Norfolk Island, Canberra, December 2003

Norfolk Island Electoral Matters, Canberra, June 2002

In the Pink or in the Red? Inquiry into the Provision of Health Services on Norfolk Island, Canberra, July 2001

House of Representatives Legal and Constitutional Affairs Standing Committee, Islands in the Sun: The Legal Regimes of Australia's External Territories and the Jervis Bay Territory, Canberra, March 1991

Government reports Department of Infrastructure and Regional Development, Australian National Audit Office Independent Report of Norfolk Island’s Financial Statements 2013/14, ANAO, December 2014

Centre for International Economics, Economic Impact of Norfolk Island Reform Scenarios, report prepared for the Department of Infrastructure and Regional Development, CIE, November 2014

Deloitte Access Economics, Review of Norfolk Island Government Business Analysis, Deloitte Access Economics, November 2014

Department of Infrastructure and Regional Development, Australian National Audit Office, Independent report of Norfolk Island's financial statements 2012/13Independent Report of Norfolk Island's Financial Statements 2012/13, ANAO, December 2013

Department of Regional Australia, Regional Development and Local Government, Australian National Audit Office, Independent Report of Norfolk Island's Financial Statements 2011/12, ANAO, March 2013

G Calvert AO and M Connolly, Review of Existing Child and Family Support Services on Norfolk Island, prepared for the Department of Regional Australia, Regional Development and Local Government, September 2012

ACIL Tasman, Norfolk Island Economic Development Report, report for the Department of Regional Australia, Regional Development and Local Government ACIL Tasman, March 2012

Australian Continuous Improvement Group, Norfolk Island Public Service Review, prepared for the Department of Regional Australia, Regional Development and Local Government, ACIG, November 2011

Commonwealth Grants Commission, Update of the Financial Capacity of Norfolk Island 2011, The Commission, 2 December 2011

Commonwealth Grants Commission, Review of the Financial Capacity of Norfolk Island 2006, The Commission, 2006

Acumen Alliance, Norfolk Island Government, Financial Advisory Report, report for the Department of Transport and Regional Services Acumen Alliance, November 2005

Human Rights and Equal Opportunities Commission, Territorial limits: Norfolk Island's Immigration Act and Human Rights, The Commission, March 1999

Commonwealth Grants Commission, Report on Norfolk Island, AGPS, Canberra, 1997

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Australian Bureau of Statistics, Norfolk Island Household Expenditure Survey 1995, The Bureau, Canberra, 1996

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