Norfolk Island – Paradise Island gone bust
Not so long ago, Norfolk Island was a popular tourist destination, thanks to its fascinating history of convict settlements and Bounty mutineers. As well, locals don’t pay Australian income tax, and that’s the way they like it, or at least did. Now Norfolk’s economy is in ruins and they want the Federal Government to bail them out.
Norfolk Island is part of the Commonwealth of Australia, but is a self-governing external territory. A legislative assembly headed by Chief Minister David Buffett runs most of the island’s affairs and the 2,000 or so locals pay no Australian income tax. Now this fiercely independent community desperately needs outside help.
Tourism is Norfolk’s Island’s only significant industry, trading on the dramatic tale of the mutiny on The Bounty. But a combination of the Global Financial Crisis and overwhelming infrastructure costs has hit hard. Tourism has slumped by more than 30 per cent, employment is way down and 25 per cent of homes on the island are for sale.
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 in the island and abandoned them because they can’t sell them, there’s no resale market.
Norfolk Island is so remote that everything here costs more and it has its own GST of 12 per cent. At the supermarket a litre of fresh milk is around $7.
»Norfolk Island faces economic ruin
The fomer penal colony is in dire straits, and Australia has pumped nearly $40 million into its economy,
The picturesque Norfolk Island, which has been proudly self governing for more than three decades, has run out of money and been declared officially insolvent.
An investigation by The Sun-Herald reveals that the government of the former penal colony-turned-tourist playground has been unable to pay its bills for almost a year.
A collapse in the tourism industry is sending financial shockwaves across the island. Many homes, hotels and businesses are up for sale, islanders who are not eligible for Australian unemployment benefits are struggling to make ends meet and the island airline, Norfolk Air, has been grounded.
A bailout is not enough, and islanders have been warned that the only way to save their island is through the sale of government-owned enterprises coupled with a raft of reforms including joining the Australian tax system and paying income and land tax.
The island’s most famous resident, the author Colleen McCullough, said islanders felt the federal government was out to ”bust” Norfolk Island’s autonomy.
Ms McCullough, who has lived on the island for 32 years, said the average person would not be able to afford to remain if they were forced to pay land tax. ”Local people are land rich and cash poor,” she said. ”We don’t pay income tax but we pay a lot of other bills and our freight costs are astronomical.”
The author would like to see the island made a protectorate of Australia but remain autonomous and receive assistance in developing another industry, such as off-shore banking. ”It would give us another income,” she said.
Settled just six weeks after Sydney, the island is famous for its history as a penal settlement. Its historical precincts won World Heritage status in 2010.
The island is home to many of the Pitcairn Island descendants of the 1789 mutiny on the HMS Bounty, who were resettled in 1856. The Pitcairn Islanders have long had a strained relationship with Australia, labelling its interference with island business as ”illegal and immoral”. They fought hard to keep their independence after winning autonomy in 1979.
But the global financial crisis forced the island’s economy into depression, and its government agreed that the federal government should take back some control in exchange for financial support.
”The most significant issue uncovered is that most of the issues identified in this review have been identified in earlier reviews, sometimes multiple times and some as many as 14 years ago,” the report said.
»How Norfolk Island has gone bust
- Norfolk not yet ready for Aust tax system (news.theage.com.au)
- Disappear From The Map On These Independent Islands (gadling.com)