In recent months there have been quite a number of stories circulating about the supposed autocratic management style of the Norfolk Island Regional Council’s general manager. Some of these draw attention to disagreements between the elected councillors and administrative staff both, it appears, in relation to jurisdiction and in relation to policy. This needs to be raised as a serious matter as it concerns the possible impediment to councillors in their delivery on the wishes of the Norfolk Island community expressed through its councillors, under law.
There are a number of documents which bear on this matter. First and most general are the legislated Acts and Ordinances relevant to the Norfolk Island Regional Council (NIRC). The Norfolk Island Act 1979 states (section 18A) that all NSW law applies to Norfolk Island unless modified by an Ordinance declared under section 19A of that Act. (Such Commonwealth Ordinances, recommended by the Minister, need the signature of the Governor-General in order to become operative.) The Norfolk Island Applied Laws Ordinance 2016 (which is a section 19A Ordinance), amends, repeals and suspends applied NSW laws in relation to Norfolk Island as set out in the Schedules of that Ordinance. Schedule 4 of the Ordinance amends the operation of the Local Government Act 1993 (NSW), so that this Act applies to Norfolk Island with the specified modifications. Considerable case law has built up over the years in relation to the manner of operation of this Act.
(It is not known how many people on Norfolk Island are familiar with the content of these legal documents as they relate to the NIRC. Nor is it known whether any analysis has been done of the ways in which Norfolk Island law differs from that applied on the ground by local councils in NSW, and what the consequences of these differences might be.)
The second relevant document is the NIRC Model Code of Conduct, which is available on the NIRC website. Part 6 of the Code deals with the relationship between council officials. And the third relevant document is the general manager’s own contract, originally signed under the mandate of the earlier transitional administration (pre-1 July 2016). This document also needs to be available to councillors. If not, the bizarre situation would arise in which an employer (the council) does not have access to the contract of an employee (the general manager). And as a particular case in point: at whatever point in time the general manager is subject to performance review by council, how could that be achieved without knowledge of what is contained in that contract? Transparency is a cornerstone of good public administration.
The issue raised here relating to possible interpretational conflicts between councillors and council management is I believe, an important one for the Norfolk Island community, and needs to be discussed and clarified publicly for the benefit of all.
Yours sincerely, Chris Nobbs.
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34. Calls for Removal of Norfolk Island Administrator become Deafening
Since his appointment on 1 July 2014 the present Administrator of Norfolk Island, The Hon Gary Hardgrave, has proved to be the most contentious and divisive in the island’s history. His conduct has been such that he has:
t Been the subject of numerous calls for his sacking from private and public figures on Norfolk Island, both in the columns of the local media and in letters to the Australian Minister responsible for Territories and the Prime Minister (1);
t Been the subject of a petition, signed by over 450 members of the Norfolk Island community and delivered to His Excellency the Governor General of Australia Sir Peter Cosgrove at Government House Canberra on 14 May 2015, petitioning that he ‘immediately terminate the appointment of the Administrator of Norfolk Island, the Hon Gary Hardgrave as our trust in the position has been shattered’ (2);
t Been the subject of a signed statement to the UK House of Commons by members of the UK Parliament who visited Norfolk Island in October 2016 (3). In this statement dated 25 October the members recorded that they were deeply disturbed by what they found on the island, that the current Administrator ‘has lost the confidence of the overwhelming majority of the people of Norfolk Island’, that the present situation is ‘damaging the lives of the people of Norfolk Island as well as the reputation of Australia’, and they urged that the Commonwealth Government ‘re-build trust with the people of Norfolk Island and adopt a new approach, with a new Administrator in Government House’;
t Been the subject of a letter from Australian Senator Pauline Hanson to the Australian Prime Minister Hon Malcolm Turnbull MP dated 19 October 2016 (4), in which were described allegations made in six different areas against the Administrator, and in which the Senator stated that ‘Based on the allegations that have been made, there appears to be a strong case for the immediate dismissal of Mr Hardgrave as Administrator’, and further that ‘I share the concerns of the people of Norfolk Island that Mr Hardgrave has failed to uphold the obligations of his high office and should be immediately replaced’.
In response to Senator Hanson’s letter to the Prime Minister, the Australian Minister for Local Government and Territories, Senator the Hon Fiona Nash, put out a statement saying “Mr Hardgrave will not be sacked based on vague and unsubstantiated allegations’ (5).
Such a response merely fudges the issue, and does not speak well of the Australian Government. The allegations made in Senator Hanson’s letter are not without substance, and there is much evidence readily available in relation to them. For example in relation to whether the Administrator did or did not mislead the former Minister - and thereby the Australian Parliament - by reporting that the proposed ‘change in governance arrangements is supported [sic] by a substantial majority of Norfolk Island residents’ (6): this statement is contradicted by all known information available in the public arena, a finding that was reported publicly at least as early as February 2016 (7). Again, the truth or otherwise of the statement alleged to have been made by the Administrator at a dinner for the visiting UK Parliamentarians, namely that Norfolk Island residents had been responsible for criminal acts in burning down houses bought by the Australian Government to house workers involved in the recent takeover, could be resolved one way or the other by a few simple telephone calls. The relevant information required to explore in detail the several allegations reported in Senator Hanson’s letter, if not immediately available, should be readily recoverable.
One response by Minister Nash to the issues raised in Senator Hanson’s letter that would not attract the label of ‘evasion’, would be one that continued: ‘… and I will investigate the matter immediately to determine whether the allegations are true or false, make the findings available publicly, and if the weight of evidence indicates that the allegations are true then I will remove the Administrator’. Given the importance of the Administrator’s position as the representative of Queen Elizabeth II on Norfolk Island, this would seem to be an essential step. To fail to undertake it would merely confirm once again the charge made by many Norfolk Islanders, that the Australian Government is care-less as to their real interests and concerns.
If the Australian Government in its dealings with Norfolk Island is to be seen to have any integrity and credibility whatsoever, this matter needs to be promptly addressed. Power may give governments licence to ride roughshod over whomsoever they choose and at whim, but justice sets a higher standard. And furthermore Australia cannot avoid judgement in this matter on the international stage. Why should any nation want to support the Australian Government’s current bid for a seat on the United Nations Human Rights Council when the Government itself condones such a mess in its own back yard? I urge Minister Nash to take decisive action to clean up this mess.
- Chris Nobbs
(1) For one example amongst many: CN, ‘Commonwealth Day, the Commonwealth Charter, and why the Norfolk Island Administrator should resign or be sacked’, The Norfolk Islander and Norfolk Online News, 26/03/2016; (2) Letter from Mr Ron Nobbs MLA to His Excellency the Governor-General (with signed petition), 13/05/2015, and letter in response from the Governor-General, 15/05/2015; (3) Kawczynski, D., Sherriff, P. and Rosindell, A., ‘Statement by U.K. Members of Parliament regarding the situation in Norfolk Island’, from the House of Commons, London, 25/10/2016, available at: http://www.norfolkschoice.com/press-releases/; (4) Senator Pauline Hanson, Letter to Prime Minister Hon Malcolm Turnbull MP, dated 19/10/2016, available at: http://www.norfolkschoice.com/press-releases/; (5) Melissa Davey, ‘Norfolk Island: Fiona Nash dismisses Pauline Hanson’s call to sack administrator’, The Guardian, 19/10/2016; (6) Hon Gary Hardgrave, Norfolk Island Community Consultations: Report to the Minister, 20/12/2014, p.3; (7) CN, ‘Was there ever a majority of Norfolk Islanders in favour of the removal of self-government?’, The Norfolk Islander and Norfolk Online News, 13/02/2016.
Earlier letters and articles by CN available at: http://www.norfolkonlinenews.com/chris-nobbs.html
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33. Norfolk Island: Counting the losses from the Australian Government intervention
In a letter published in TNI of 15 October 2016 the Australian Minister for Territories, Hon Fiona Nash, listed monies that the Australian Government was spending, or intending to spend, on Norfolk Island. Introducing the list the Minister said: “I’d like to let you know that your way of life will continue as it always has”. This is an extraordinarily benighted statement to come from the Minister responsible for Norfolk Island. Furthermore this was not a slip of the pen, as the Minister repeated the claim in a letter to TNI on 29 October. Perhaps on the other hand it is merely a final confirmation that post-truth politics has become endemic within the Australian Government.
Here I will enumerate for the Minister, and anyone else who is in doubt, what aspects of life on Norfolk Island have been changed for the worse by the recent Australian intervention. This is not to say that aspects of the intervention have not provided benefits to the island, not at all. However the list below should provide an initial step towards a more grounded reality than that provided by the biased and inflated claims of the Australian Government.
Due to space limitations, the following provides only a summary of main points. I have tried to avoid double counting, however it needs to be recognised that one policy intervention may affect more than one aspect of Norfolk Island life. If anyone would like to discuss further any of the points raised, or bring to my attention errors or appropriate additions, they are invited to contact me directly.
A List of Losses
1. Democracy and Representation
v As a result of the Norfolk Island Legislation Amendment Act 2015 passed in the Australian Parliament, Norfolk Island has been:
t Stripped of its Legislative Assembly and limited form of self-government;
t Denied special mention of the island’s Pitcairn heritage in the replacing Act;
t Disenfranchised non-Australians from participating in Norfolk Island elections;
t Subjected to a process in which all legislative reference to Norfolk Island residents and Norfolk Islanders as legal persons, has been deleted;
t Denied voting franchise in New South Wales, the laws of which are applied on Norfolk Island;
t Restricted in access to Australian democratic representation to parliamentary members 1,900km distant in Canberra;
t Subjected to unrestrained immigration which risks undermining the integrity of the island’s society;
t And these changes have been complemented by the Commonwealth’s gagging of free speech on the local radio (1).
Comment: The democratic deficit is now such that representation is in the Canberra electorate, 1,900km away, in which enrolled Norfolk Islanders number less than 0.5 per cent of the electorate.
v The disbanding of the Island’s Legislative Assembly and imposing in its place a Norfolk Island Regional Council (NIRC) based on a New South Wales model has:
t Emasculated the areas of responsibility accorded to the island’s decision making processes;
t Removed the ability of the NIRC to raise general revenues by taxation (including the ability to impose a GST which was the mainstay of the previous system);
t Financially burdened the NIRC with extravagant salaries for a new level of managers imposed by the Commonwealth (costing well over $1m per year);
t Further financially burdened the NIRC with the loss of revenues from registry functions, licence fees from the Norfolk Island Gaming Authority, and the non-application of the tobacco levy (over $1m per year);
t Forced the NIRC into a heavy reliance on land rates revenue with the consequential breaking up and dispossession of traditional land holdings and the island’s cultural tradition;
t Reduced some pension payments from those available under the former Norfolk Island pensions scheme, and made their access more difficult (2);
t Wasted Commonwealth money in unnecessary and/or poorly supervised consultancies, exacerbated by a failure to recognise that accumulated island experience represents a valuable input to decision-making for the island (3);
t And in channelling all Commonwealth provision to Norfolk Island through the Department of Infrastructure and Regional Services (DIRD), has exposed the island to an arrogant and systemically deaf interlocutor. (The similar experiences of the Indian Ocean Territories with this Department are well-documented.)
Comment: As a result of the Australian Government’s undermining of the NIRC’s abilities to raise revenues, and other impositions, the projected annual deficit of the NIRC since July 1 has already blown out by over $1.0m to $5.35m (4). The NIRC is being driven into becoming a mere supplicant at Canberra’s begging bowl.
v The Australian Government has enforced an economic regime based on the operations of the free market, within an Australian-imposed doctrinaire regulatory framework, both of which are highly inappropriate for an isolated small island economy in the twenty-first century. Furthermore the model is associated throughout the world with increased inequality and social injustice. This regime has:
t Undermined the ability of the island to respond to economic fluctuations and other destabilising factors by removing the power to accumulate general revenues;
t Increased direct and indirect costs as a result of inappropriate regulatory requirements;
t Decreased the convenience of medical patients by privatising the island’s pharmacy and removing it from the island’s hospital;
t Notified Norfolk Island commercial fishers that their traditional and current practices are illegal;
t Lowered biosecurity standards for primary producers in key areas because prohibitions formerly considered appropriate have been replaced by a ‘balance of risks’ approach;
t Forced people from the part-time workforce by fear of losing pension entitlements;
t Abolished the Norfolk Island Tourist Bureau and failed to develop and alternative tourism strategy;
t Under Australia Post, increased the local postage rate by 1,000 (sic) per cent;
t Imposed an economic transition process that has been brutally abrupt (despite several appeals for a slow-down) and characterised by inadequate information provision, both of which have disoriented and inhibited businesses in their ability to plan.
Comment: The imposed economic regime means loss of the island’s ability to retain profits on the island and to adequately regulate the island’s affairs. Uncontrolled immigration has opened up the island to economic exploitation.
4. Social, Community and Cultural
v The legislative changes pointed to in section 1 (above) represent a denial of the history and culture of the settlers from Pitcairn Island, who arrived on Norfolk Island not via Australia but from the east, and under British tutelage.
In recent times Norfolk Islanders have been subjected to persistent attacks and humiliations from Commonwealth Ministers, DIRD and the Norfolk Island Administrator, that have undermined Norfolk Islanders’ dignity, self-worth and pride. These attacks have undermined the community, and falsely polarised understandings between ‘Islanders’ and ‘Australians’ (5). I give a selection of examples (from a longer list):
t The dismantling and removal of the entire contents of the Norfolk Island Legislative Assembly in the Old Military Barracks in the KAVHA site: these things were in place when KAVHA was granted World Heritage status, and their removal may have been illegal under the World Heritage Convention (6). What this action says is that the Australian Government values convict buildings but does not care about Norfolk Islanders’ heritage;
t The systemic failure of the Minister, DIRD, the transitional Administration and the Administrator to respond to, or even acknowledge, correspondence, sends the message that ‘We don’t care what you think or how you may be hurting’;
t The failure to arrange for Commonwealth consultants to consult widely with island stakeholder groups and individuals sends the message that their accumulated island experience is either irrelevant or worthless;
t Although the KAVHA area is at the centre of community life, Norfolk Island’s management role and responsibility in regard to it have been reduced to zero;
t Pejoratively worded advertising by the NSW Government for teaching jobs on Norfolk Island denigrates the island’s standing (7);
t The Administrator, the Queen’s representative on Norfolk Island, referred publicly to Norfolk Islanders assembled to mourn the passing of the Legislative Assembly as ‘a mob’ and as participating in a ‘school breakout kind of activity’ when they proceeded to Government House, and implied that they or their friends might steal from Government House (8); complained on public television that the Government House water supply contained faecal material (9); failed to support the Norfolk Island Returned and Services League centenary celebration arrangements after bickering with the RSL over the singing of the Royal Anthem at Anzac Day services (a practice that has been honoured on the island since the first such service in 1916)(10).
Comment. Such acts divide and destroy a peaceful, well-ordered and compassionate community, proud of its heritage, which might otherwise have been a model for twenty-first century living.
5. And Finally
Armed with this list, each person will hopefully be better equipped to decide for themselves about the merits or otherwise of the Australian Government’s intervention on Norfolk Island. Some however have no doubts. Internationally regarded human rights lawyer Geoffrey Robertson QC has called it ‘a heavy-handed act of regression’ (11). And world renowned author and long-time resident of Norfolk Island, the late Colleen McCullough, referred to the actions of the Australian Government as ‘bloodless genocide’ (12).
- Chris Nobbs
(1) CN, ‘The gagging of Radio Norfolk’, TNI & NOL 27/02/2016; (2) See: Bebs, ‘Pensions’, letter to TNI 05/11/2016; (3) CN, ‘Norfolk Island: New Minister, old spin?’, TNI & NOL, 05/11/2016; (4) NIRC, Quarterly Budget Review Statement, 16/11/2016; (5) CN, ‘How to dismember a community’, TNI & NOL, 09/04/2016; (6) CN, ‘Norfolk Islanders must stand their ground over KAVHA’, TNI & NOL, 09/01/2016; (7) Dave South, President NICS P&C, letter to TNI 15/10/2016; (8) CN, ‘Comments on an interview…’, TNI 27/06/2015; (9) Channel 7, Sunday Night, Norfolk Island: ‘This isn’t Australia’, 26/07/2015. https://au.news.yahoo.com/sunday-night/features/a/29053437/norfolk-island-this-isnt-australia/; (10) Norfolk Island RSL, ‘Community Announcement’, TNI 14/03/2015; (11) Geoffrey Robertson, ‘The recolonisation of Norfolk Island is a heavy-handed act of regression’, The Guardian, 23/04/2016; (12) Ric Robinson, personal communication. [Earlier CN letters available at: http://www.norfolkonlinenews.com/chris-nobbs.html, or contact: email@example.com].
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32. Norfolk Island in Oceania or: When is a hospital not a hospital?
The Oxford English Dictionary defines a hospital as: “An institution providing medical and surgical treatment and nursing care for sick or injured people.” OK, so Norfolk Island has a hospital, doesn’t it? I seek reassurance elsewhere. The standard American dictionary Merriam-Webster offers: “a place where sick or injured people are given care or treatment and where children are often born”. Even people who speak Australian appear to agree, as the Macquarie Dictionary gives us: “An institution in which sick or injured persons are given medical or surgical treatment.” Phew. I can relax. Norfolk Island has a hospital.
But we better be careful here, ‘hospital’ is a pretty technical term, all those long names for diseases, all that techy apparatus, all those white coats and uniforms. So it might be a good idea to check what the United Nations thinks a hospital is, just to be sure. Well the United Nations Statistics Division defines a hospital as: “an institution which offers in-patient care under direct supervision of qualified medical doctors.” (1) So it’s pretty clear then?
Well no, not necessarily. The Australian Government defines a hospital as “A health care facility established under Commonwealth, state or territory legislation as a hospital or a free-standing day procedure unit, and authorised to provide treatment and/or care to patients.” (2) The key to this definition is that a hospital is what the Australian Government says is a hospital. Oh hoh! Norfolk Island doesn’t really have a hospital after all, as the Australian Government says it hasn’t. What it has is a not-hospital, a NIHRACS, a Norfolk Island Health and Residential Aged Care Service.
This seems like Newspeak. Shades of George Orwell’s Nineteen Eighty-Four? We might recall that that novel, generally agreed to be one of the most outstanding written in English in the twentieth century, is set in the capital of the dystopian state of Oceania (sic), in a world which is characterised by war, government surveillance and political manipulation. There is a special language called Newspeak ordained by the ruling party and its leader Big Brother, the purpose of which is to keep the general population docile by limiting freedom of thought and eliminating concepts such as ‘freedom’, and ‘self-expression’ that might threaten the stability of the state. As the ruling party requires, brainwashing and torture are the responsibility of the Ministry of Love, shortages and rationing the responsibility of the Ministry of Plenty, while the Ministry of Peace deals with war, and the Ministry of Truth with lies. The main character of the novel, Winston Smith, works for the Ministry of Truth and his job is to rewrite historical articles so that they keep up with the changing ruling party line.
At this point I don’t know whether to laugh or cry. How threatening a concept is ‘hospital’? What mayhem might a Ministry for Infrastructure and Regional Development create in Oceania? And - considering the titles imposed on roles within the Norfolk Island Regional Council by the Australian Government’s transitional administration - what might the mawkishly labelled ‘Customer Care Team’ do in Oceania? Then again maybe Norfolk Island should award an annual Winston Smith Prize to an Australian Government bureaucrat or politician chosen by popular vote? Perhaps too we could all go back to our Orwell to see what really happened? (3)
But to return to the point: I say that Norfolk Island has a hospital, and it appears that most or the world agrees with me.
- Chris Nobbs.
(1) United Nations Statistics Division, “Hospital”, Detailed structure and explanatory notes, COICOP code 06.3; (2) Australian Institute of Health and Welfare, National Health Data Dictionary, Version 16 (2012), p.2654; (3) Wikipedia, “Nineteen Eighty-Four”, is a good place to start.
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31. Norfolk Island: New Minister, Old Spin?
I note the letter that appeared in The Norfolk Islander (15/10/16) over the signature of the Australian Government Minister now responsible for Norfolk Island, The Hon Fiona Nash. In this letter a catalogue was given of the various monies that the Australian Government says it has spent and would be spending on Norfolk Island – on health services, the Central School, Cascade Pier, Medicare, and so on. There is much in the Minister’s letter which appears beneficial for Norfolk Island. For example the Cascade Pier upgrade involves a substantial Commonwealth commitment of money, and if the augmented pier performs as intended it will be a great blessing for the island’s economy.
The Minister’s letter was an informational promotion on behalf of the Commonwealth. Nothing wrong with that, you may say: “Don’t look a gift horse in the mouth”. But there is an even older horse proverb which says: “Beware of Greeks bearing gifts”, referring to the episode of the wooden horse in the sacking of the city of Troy in the twelfth century BC. So how best should we read the Minister’s letter? Because the history of Australian Government’s past conduct on Norfolk Island has been characterised by so much duplicity, Norfolk Islanders would do well to be wary.
We need to ask: Is what has been said fact, or are these numbers just being waved around as a stick with which to beat the island? To what extent do the monies expended address the island’s priorities? Do the expenditures represent an efficient use of Commonwealth funds? Why are they doing what they are doing? In what follows, and for the reason just noted, I give a sceptic’s view. We will consider a selection of the issues.
Age pensions. According to the Minister, 229 people on Norfolk are being provided with age pensions, for around $4 million which it is said is “double the $2 million that was provided under the old system”. However what we don’t know is how many of the 229 are Australians recently come to live on the island, nor how many of them are New Zealanders now being paid under agreements with the Australian Government. Both of which groups should be excluded from current provision when comparing it with what went before.
These matters aside there is still a more fundamental problem with these numbers. The maximum basic rate of the Australian age pension per fortnight is $797.90 for a single person and $1,203.00 for a couple. This means that if the Commonwealth is spending $4m on age pensions – and supposing there are say, 83 single pensioners and 73 couples – then ALL of the pensioners would have to be in receipt of the maximum basic pension and no one getting less than the maximum. This is a nonsense, and the numbers promoted by the Minister cannot be relied upon. And if one cannot rely on these numbers, why should one rely on any of the others?
Medicare. Because of the introduction of Australian Medicare we are told, “residents can now access the local doctors much cheaper [sic], or even entirely paid for by Medicare.” If more people are currently going to the GP, as is contended, that is absolutely fine. However it is not so long ago that Norfolk Islanders were told that all GP visits would be bulk billed (i.e. “entirely paid for by Medicare”). Now this appears to have been withdrawn, and we are told that under some circumstances some visits to a GP may be fully paid by Medicare (and if not then the patient is responsible for the additional cost beyond the Medicare scheduled fee). The situation is only likely to get worse, particularly if as has been proposed, GP services are privatised (1). To claim virtue what needs to be compared here is the projected average annual cost of a family’s health care expenditures and scheme contributions under Medicare (including compulsory private insurance), with their equivalents under the old Norfolk Island Health Scheme. To my knowledge this has not been done.
The Hospital (aka NIHRACS) upgrades. The Minister’s letter states that the Australian Government has “Invested $700,000 on urgent repairs for the NI health service, which we look forward to improving.” Note that this expenditure has been for “urgent repairs”, not planning or administration. Now I can find only one recent DIRD tender relating to the hospital repairs, and that is for $466,000 to “upgrade Norfolk Island hospital and school”. Let us suppose that the hospital got half of this figure, $233,000. Then where has the other $467,000 for the hospital’s “urgent repairs” come from, what has it been spent on, and by whom? No one appears to know.
Known repairs carried out at the hospital have included providing fire doors, ramp access, water storage tanks, and upgrading the electrical system. The new concrete disability ramp has been installed to replace an old concrete disability ramp judged to be too steep. Unfortunately the new railings appear dangerously inadequate, and at the top the ramp meets an outward opening door which cannot be manipulated by a wheelchair-bound patient. And then there is the hospital ward which has new windows but none of which are capable of opening. And then there is the hospital kitchen which has been stripped for refurbishment, before the job was declared to have “run out of money”, so that all hospital meals are having to be bought in commercially. All these urgent repairs are visible to any casual visitor to the hospital. Job specifications appear to have been hopelessly less than those required.
Consultations and consultancies. When we try to interpret the money numbers given by the Minister we might want to ask: How much of the expenditures already made on flying the football teams of bureaucrats from Canberra to Norfolk Island for meetings, have been debited to the Island’s account? Concern is redoubled by the fact that in many instances the visitors speak only to a small clique of insiders, to the neglect of many genuine stakeholders. (We may recall the recent occasion on which DFAT flew 23 Canberra bureaucrats business class to Paris for a talkfest on how to save money, as reported by Heath Aston in the Sydney Morning Herald, 20 October 2016.)
Again we might ask what fraction of the expenditures has been on flown-in consultants employed to do things that could be done for a lesser cost if they had more effectively used local input? For example SGS Economics and Planning has been paid $69,000 by DIRD for producing a 24-page report on an economic development strategy for Norfolk Island which said little that was not already known and was deficient in several respects (2). That’s $2,800 per page. Then again DIRD has paid consultants KPMG an eye-watering $800,000 to develop the island’s multi-purpose health services plan. Truly, the ignoring of local input has its price.
In the face of such Commonwealth largesse, it might appear to the observant Australian taxpayer that there has been on Norfolk Island a lack of control and substantial wastage by the Australian Government. And Norfolk Island itself has a significant interest in these matters, both because efficient spending would free up funds for other projects, and because the island has never ever wanted to be seen merely as the recipient of alms.
What was not said. We also need to examine the Minister’s letter from the point of what it did not say. What the NIRC has actually asked the Commonwealth for in recent times – as distinct from what the Commonwealth has decided Norfolk should have – is assistance with: (i) the waiver of the debt from the resealing of the airport runway in 2006; (ii) a reliable and on-going commitment to provide financial support for tourism; (iii) investment in the installation of at least a spur connector to the Hawaiki fibre optic trans-Pacific cable about to be rolled out (minimum cost estimate for the connector of around A$2.6m). None of these requests has been agreed to by the Minister.
And finally…. When we are adding up the “benefits” provided by the Australian Government, we might reflect on the fact that all the assets of land, buildings and equipment of the Norfolk Island Hospital (including the privately donated dental clinic and physiotherapy unit), Police Station, and Central School, built up and maintained by the Norfolk Island community over many years, have been taken over by the Australian Government, without compensation or payment. And that transfer includes all legacies gifted to the Norfolk Island Hospital. Many would call that theft.
In a following letter I will consider a more shocking aspect of the Minister’s letter.
- Chris Nobbs.
(1) “Norfolk Island health services and the pitfalls of privatisation”, 16 July 2016; (2) “The proposed economic development strategy: good sense, fairy story, and deception”, 5 and 12 December 2015. Earlier letters available at: http://www.norfolkonlinenews.com/chris-nobbs.html
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30. NORFOLK ISLAND 1979-2015: SUCCESS OR FAILURE? PART II. THE AUSTRALIAN GOVERNMENT’S ROLE
In Part I we considered political, economic and governmental aspects of this matter from an “on the ground on Norfolk Island” perspective. This week we consider the other side of the equation: the role of the Australian Government.
Norfolk Island’s infrastructure
Prior to 1979 the Australian Government, through the Administrator, was responsible for all matters relating to Norfolk Island including the island’s infrastructure. Some of these responsibilities were transferred to the Norfolk Island Government in the Norfolk Island Act 1979 which made provision for a limited form of self-government for the island, and was based on the idea of partnership between the two governments.
However that idea seems to have had a very short honeymoon. Promised reviews of the workings of the Act did not occur. The Island’s Administration was not permitted to use debt or bond financing for development without the Commonwealth’s permission, and this was never forthcoming. The Commonwealth did itself however provide two loans: for the Cascade Cliff Safety Project (1990s, ~$3.1m) and for the Airport Reseal (2006, ~$11.5m).
In the 1990s it became apparent to the Norfolk Island Government (NIG) that diversification away from tourism would be an important strategy, and a number of government-backed and private enterprise initiatives for revenue-raising projects were proposed. These invariably were denied by either the Norfolk Island Administrator or the Commonwealth.
These initiatives included: the minting of Norfolk Island coinage, exchangeable at full value for Australian currency (1993-94); establishment of an offshore financial/banking centre on the island (1997, 2010); proposal to develop a small-scale offshore commercial fishery in the Norfolk Island exclusive economic zone (2010-14); establishment and location on Norfolk Island of an appropriately structured Australian International Shipping Register (2013-14). On two occasions the Norfolk Island Government issued licences under Norfolk Island law for the cultivation and harvest of medicinal cannabis but on both occasions the licences were cancelled by the Administrator on instruction from Commonwealth Minister (2014, 2015). However the Commonwealth did provide tied funding for some capital projects over these years including the Water Assurance Scheme (1980s), and the Waste Management Centre (2002-03).
Given this background it is not surprising that the island’s infrastructure is now run down. The Australian Government must bear substantial responsibility for that fact. (And indeed, if it had provided some appropriate technical assistance over these years the ‘airline problem’ might well have been avoided.)
“If all you have is a hammer…”
It was the American psychologist Abraham Maslow who half a century ago surmised that “If all you have is a hammer, everything looks like a nail”. This unimaginative approach has characterised large swathes of the Australian Government’s policies and actions, and those of the Department of Infrastructure and Regional Development (DIRD), towards Norfolk Island in recent years.
It shows several characteristics. One is encapsulated in the oft-repeated phrase “Norfolk Island is just the same as an Australian country town”. This is a lazy belief, and analysis shows that it is very important ways it is false (1). However it enables politicians, bureaucrats, and indeed others, to impose well-worn formulaic prescriptions and standards on Norfolk Island without further thought. This approach underlies the determination of the level of medical services to be provided on Norfolk in future, and is threatened in the wholesale application of Australian and New South Wales regulatory standards. More egregious in terms of island culture is the opening of the island to unlimited Australian immigration.
A second characteristic is a more directly ideological one, namely that whatever the economic problem, a free market approach will provide the best solution to it. However the assumptions under which this ‘theorem’ of economics has meaning are not met on small islands. Furthermore it discounts the notion of community which is of great important in small societies, and ignores the importance of a government buffer against the wide swings of uncertainty experienced by small islands (2). A prime example of the Commonwealth’s failure to comprehend such subtleties is provided by DIRD’s decision on the privatisation of pharmaceutical provision – and possibly GP services - on Norfolk Island (3).
A consequence of these characteristics is that criteria of judgment are limited to what is provided within their own sphere of action. There is a tendency to believe that one has all the answers; to not feel obliged to pursue evidence because the answer is already known; and to look merely for faults in the other’s position (the “It’s a failure” syndrome). Public and community opinion can be ritualised and sidelined (4). And judgments made can be reaffirmed by talking only to those on the ground who agree with you.
What all this leads to is distrust. This is exacerbated by such things as the remarkable evidence that DIRD required a private contractor to rewrite a report on aged care on Christmas and Cocos Islands sixteen times before it was accepted (5). Even more remarkable is the experience of the modeling of the Norfolk Island economy commissioned by DIRD initially in 2006. The report from this study was suppressed by DIRD who opposed FoI requests for its release for eight years on the grounds that it would be “contrary to the public interest” (6). When in 2014 a new report from the same consultants using the same CGE economic model was commissioned and released, lo and behold the results were more advantageous to the view that the Commonwealth’s intervention on Norfolk Island would provide positive benefits to the island. A review of the two reports by an independent expert in the UK determined that not only was the type of model used inappropriate for application to such a small economy as Norfolk’s, but that there was inadequate information available publicly to decide on the relative merits of the two sets of results, and that in any case the models took no account of economic inequality (7).
When one is prepared to move away from the mindset of “This is a failure and we the Australian Government must fix it”, from “What do we understand?” to “What’s in their best interests?”, from a perspective of ownership to one of development, then new possibilities arise. Here are five for starters (not including those already referred to, some of which might be worth revisiting):
- Explore what it is that makes the arrangements between New Zealand and its Pacific dependencies so agreeable to both parties, and apply some of that reasoning to Norfolk Island;
- Examine the case of the Falkland Islands, an economically successful British Overseas Territory with internal self-governance, and find what lessons may be applicable to Norfolk Island;
- Make an annual payment to Norfolk Island as rental for the benefits received by the Commonwealth from the island’s location, strategic value and Exclusive Economic Zone;
- Permit the Norfolk Island authorities to reintroduce customs duties on some selected imported products;
- Envision Norfolk Island not as ‘part of New South Wales’, but as a world-relevant semi-autonomous model system of twenty-first century sustainable living.
In 2014 the Commonwealth Minister referred an inquiry into future economic development on Norfolk Island to the Joint Standing Committee on the National Capital and External Territories. However the major recommendations from its final report did not deal with economic development, but with governance, and in particular the abolition of the democratic structures in place on the island since 1979. In this the Committee went far beyond its terms of reference and beyond the terms on which these issues had been discussed with the public: the implicit assumption apparently being that democracy and economics are co-extensive, or alternatively that democracy is a sub-category of economics. Such assumptions are based on ignorance. One person one vote is a different construction from one dollar one vote.
Norfolk Island has in recent years become the plaything of Australian political and bureaucratic ideologues. The conduct of the Commonwealth has been to a large degree characterised by a failure of intellect and imagination which has rendered many of their judgements questionable where not actually faulty.
In 2015 the Australian Government was faced with a choice: give Norfolk Island and its Legislative Assembly a hand in putting the island back on its financial feet, or destroy it and reconstruct it in Australia’s own image. Sadly they appear to have chosen the latter, going against a worldwide trend in relation to the governance of sub-national island jurisdictions. Geoffrey Robertson QC pointed to it as a “heavy-handed act of regression” (8). In a subsequent article we will look at how the Australian Government went about this process and what the consequences have been and will likely be for the Norfolk Island community.
(1) “Why Norfolk Island is not an Australian country town”, The Norfolk Islander and Norfolk Online News, 25/06/16; (2) “Norfolk Island Regional Council and the proposed ‘Core Principles’”, idem, 31/10/2015; (3) “Norfolk Island health services and the pitfalls of privatisation”, idem, 16/07/2016; “Some simple economics that the Australian Government seems to have forgotten – or doesn’t want to know”, idem, 09/07/2016; (4) “The Norfolk Island Advisory Council process is a disgrace to Australia”, idem, 16/01/2016; (5) Towell, N., “APS department orders report to be rewritten 16 times”, The Canberra Times, 15/04/2015. After two years of suppression the original draft report is now available following an FoI process; (6) Belot, H., “Uncensored audit report of Norfolk Island’s economy must be released, tribunal”, The Canberra Times, 11/06/2015; (7) “Norfolk Island reform scenarios – comparing the two CIE reports”, The Norfolk Islander and Norfolk Online News, 28/11/2015; (8) Robertson, G., “The recolonisation of Norfolk Island is a heavy-handed act of regression”, The Guardian, 23/04/2016.
References 1-4 and 7 available at: http://www.norfolkonlinenews.com/chris-nobbs.html
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29. Norfolk Island 1979-2015: Success or Failure? Part I. On the Ground on Norfolk Island
In 1979 the Australian Parliament granted Norfolk Island, as an external territory under the authority of Australia, a limited form of self-government. The arrangements were enshrined in the Norfolk Island Act 1979, and were based on the idea of partnership between the Australian and Norfolk Island governments in advancing the well-being of the island.
In recent years the Australian Government and its representatives, including the Norfolk Island Administrator, have regularly claimed that the period 1979-2015 on Norfolk Island was a ‘failure’, and this proposition has been used as one justification for the wholesale intervention of the Australian Government in the affairs of Norfolk Island under the Norfolk Island Legislation Amendment Act 2015. This claim needs to be examined more thoroughly than it has been. There were undoubted failures during the 1979-2015 period it is true: failures both on the part of the Norfolk Island Government and the Australian Government, and these need to be acknowledged on both sides. However taken overall, the evidence indicates to me that, given all the circumstances, the conduct of the people and government of Norfolk Island was a substantial success.
Politics and democracy
There is one important and fundamental sense in which the period was a resounding success. The 2015 Referendum held on the Island established that from a 92 per cent turnout of electors, 68 per cent of residents wanted (basically) the system of government that they had, to continue. And this result was indirectly confirmed by the results of the first Norfolk Island Regional Council elections held in June 2016. There is no evidence in the public domain that stands counter to these facts. This indicates that the Norfolk Island community – making their own judgement as to their own situation - were basically happy with their way of life, economy and environment (despite the need for some changes being evident). We will return to this aspect of the matter in Part II. Now let’s look at the economic aspects.
The tourism industry
Tourism has been the mainstay of the island economy for half a century, and from 1980 was run by the Norfolk Island Government (NIG) as a separate corporation. Figure 1 shows the rise and fall of tourist numbers to the island over 1980-2014 (1). Annual tourist numbers increased over the two decades of 1980-2000, peaking at 40,000 in 2001. From this high point, with hiccups in 2002 and 2006, numbers have followed a downward trend. What were the reasons for this decline?
In 2001 two airlines were servicing Norfolk Island, Flight West (a Queensland regional airline) and Norfolk Jet Express (NJE). This year saw the top of a tourist boom based on the success of Norfolk Island in attracting large seniors’ groups for holidays. In 2002 Flight West went into voluntary liquidation, disrupting the Norfolk Island market. NJE put on more seats, and Alliance Airlines entered the market briefly, raising numbers somewhat in 2003-04. In 2005 NJE ceased flying following a dispute with the NIG over a claimed debt.
At this point the NIG stepped in to charter an air service to Norfolk, before setting up its own airline Norfolk Air in 2006. It was hoped that Norfolk Air would augment tourism to Norfolk with a combination of increased points of departure, increased capacity, and a change in tourism marketing strategy. Despite good intentions, the Government investment in an airline was a very bad decision which bled the Norfolk treasury of many millions of dollars before the Commonwealth agreed in 2012 to pay out the existing contracts, close the airline down, and underwrite a service agreement with Air New Zealand. These airline disruptions and associated uncertainties with tourism marketing weighed heavily on tourist numbers over those years.
There were other issues too beyond the NIG’s control that contributed to the decline in tourist numbers after 2001. First, the early 2000s saw the rise of cruise ship holidaying which Norfolk could not access. Between 2004 and 2014 Australian take-up of cruise tourism increased from 158,000 to over a million: a year-on-year growth of over 10 per cent. Another contributor was the global financial crisis (GFC), prefigured in second half of 2007 by the collapse of US house prices. OECD data shows that in response, Australian savings as a percentage of household disposable income jumped by 10 per cent, taking over $500 million out of annual discretionary spending by households in the three eastern states (2). And data for New Zealand show a similar response. In addition, Australian interest rates slumped in the final months of 2008 putting pressure on individuals relying on fixed incomes. These changes without doubt had a depressing effect on the number of tourists visiting Norfolk Island. Thus even after consideration of the ‘airline problem’, it might be said that Norfolk Island tourism did better than might have been expected over these years.
Norfolk Island Government – revenues and expenditures
Over three decades (1979 to 2009) the Norfolk Island Government neither borrowed nor received monies from the Australian Government for recurrent expenditures. Figure 2 shows the Government’s credit/debit balance on current account for years 1990-2010 (1). The numbers show that for almost two decades - and as for the years prior to 1990 - the NIG on average, balanced its books. It is probably the case that few if any governments in Australia, state or regional, could claim a similar record. This modest and steady living does not look to me like failure.
And a list of the improvements carried out by NIG over these years is a long one. In a 2015 press release the NIG identified the following as part of its infrastructure legacy over 1979-2014: the construction of a new Bicentennial Centre, of a new Library and Broadcasting Station, Police Station, International Airport Terminal, water and sewerage treatment plant for the business district, Fire and Emergency Services Co-ordination Centre, Waste Management Centre, elements of the Works Depot, Telecom internet and mobile telephone services, the sealing and on-going maintenance of the road network, and the share of funding for the KAVHA World Heritage Site.(3) (In some of these projects the NIG did in fact receive some Commonwealth assistance.)
However history records that in 2010 the NIG approached the Australian Government requesting a loan to tide it over its serious financial difficulties. The response from the then Commonwealth Minister Simon Crean was to declare that the Commonwealth would provide no money to Norfolk Island unless it paid taxes and joined the Australian welfare system and publicly supported the Territories Law Reform Bill then going through the parliament. The Norfolk Island Government reluctantly agreed to these terms, under protest (4). In March 2011 the two governments signed the Norfolk Island Roadmap designed to chart a way ahead. The Commonwealth moved to install a financial officer in the Norfolk Island Administration, and from that time the island effectively lost its control over its financial affairs.
Next week we will look at the other side of the equation, the actions and judgements of the Australian government. If readers have their own views about this letter and/or the next, I’d invite them to discuss them either in the columns of The Norfolk Islander and Norfolk Online News, or by contacting me directly (firstname.lastname@example.org).
(1) Norfolk Island Administration, Annual Reports, various.
(2) OECD data – household savings: https://data.oecd.org/hha/household-savings.htm#indicator-chart
(3) Snell, L, Norfolk Island Chief Minister, Media release: “Has the Hon Jamie Briggs MP, Assistant Minister for Infrastructure and Regional Development, misled the Australian Parliament?” 10 April 2015.
(4) For example: Government of Norfolk Island, “Submission in relation to the Exposure Draft Territories Law Reform Bill 2010”, 25 February 2010.
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28. NORFOLK ISLAND HEALTH SERVICES AND THE PITFALLS OF PRIVATISATION
The Norfolk Island Hospital Enterprise was until recently an independent arm of the former Norfolk Island Government. The hospital started life in Kingston back in the early nineteen-hundreds before moving first to Bishop’s Court and then after World War II to its present location occupying hospital buildings built by the RNZAF. Throughout its life it has been the centrepiece of Norfolk Island family and community life, witness to births, illnesses and deaths, and of recent years provider of general practice, surgery, pathology, x-ray, dentistry, physio, pharmacy, and aged care services. It has been a much loved and comprehensively supported institution. It is now being transformed - to some degree a victim of diminishing budgets, modern technologies, and individual and government expectations in regard to health. On 1 July 2016 it ceased formally being a ‘hospital’, transformed by the Australian Government into a multipurpose ‘service’, the Norfolk Island Health and Residential Aged Care Service (NIHRAC).
We should not allow the hospital to pass into history without saluting its achievements and the contribution made over many years by its staff, supporters and benefactors, to the well-being of the Norfolk Island community. And that acknowledgement also requires some reflection on where its replacement is heading and how it will change the health and social conditions in the island.
A number of reports on various aspects of health services on Norfolk Island have been produced in recent years, and these have been assimilated to large degree in the health services plan outlined by consultants KPMG in October 2015. This is a clear and systematic report. However to get a proper picture of its meaning we need in particular to look at the motive of privatisation which underlies much of the Australian Government reforms, and what this implies in the detail of the proposals for Norfolk Island’s health services.
It is the Department of Infrastructure and Regional Development (DIRD) which provides the budget for NIHRAC and determines service delivery. DIRD, we understand, has delegated the provision of services at NIHRAC to the South Eastern Sydney Local Health District (SESLHD) who will be running it as an entity within the overall requirements of NSW Health. A unique arrangement to say the least. What else do we know for sure at this time? Not much. This is in large measure because DIRD - in this matter as in others on the island in which it is involved - proceeds under a veil of silence, without open discussion with those on the island, now and then punctuated by dogmatic pronouncements. But let’s see how far we can get.
Before the transformation there were two pharmacies on Norfolk Island accessible to the public, one in the hospital and one privately operated in the shopping mall, living happily side-by-side. Now there is only one, that in the mall, which among its functions provides pharmaceutical products to the hospital under an imprest system to serve patient needs, including acute and emergency care. Previously, with a dispensing pharmacy at the hospital, GP patients had immediate access following consultation (a consideration particularly important for the old), the hospital had the capacity to stock a wide range of drugs including very expensive ones, secure storage for Schedule 8 drugs, provided 24x7 availability (holidays included), and ever-present vigilance.
Now there is only one private pharmacy that must inevitably act on commercial principles regarding its costs, inventory, and opening hours. Any idea that both pharmacies could continue to cohabit has been stymied with the Norfolk Island Legislation Amendment Act Transition Rule (Approved Pharmacists) 2016 written to expressly exclude a dispensing pharmacist being engaged at the hospital. Privatisation (here in combination with monopoly) has very evidently decreased the benefits available to the Norfolk Island community. Well done, DIRD!
Doctors and GP services
We need to look at these separately. Under the Australian health care system the Commonwealth Government provides a Medicare Benefits Scheme included in which is a schedule which specifies what it considers to be an appropriate fee for various GP consultations, procedures and tests (the ‘scheduled fee’). Patients can claim from the Government a 100 per cent rebate on the schedule fee paid. However a GP can charge more than the scheduled fee for a service, in which case the patient must pay the difference out of pocket (the ‘gap payment’). ‘Bulk billing’ is where the GP accepts the Medicare Benefit schedule fee as full payment for the service provided and claims reimbursement direct from the government. In this case there is no payment made from the patient to the GP. Alternatively the GP would bill the patient directly for the full amount charged, and the patient can claim the scheduled fee benefit back from the government. (There are slightly different arrangements for hospital services.) My understanding is that Norfolk Island patients are to be bulk billed (not that DIRD has said so publicly). However don’t expect that to last, for reasons I will describe.
Now let’s consider the doctors. According to KPMG the establishment for NIHRAC requires two full-time doctors only. (One might argue whether or not that is an adequate provision given NIHRAC’s status as a provider of acute and emergency services, but that is another matter.) My understanding is that the doctors will continue for the time being to be salaried staff of NIHRAC. Bulk billing will work fine for that. However on evident experience we can be sure that DIRD wants to privatise the doctors over time, driving them into private practice.
There are various models of GP provision in rural Australia, and different models have been found to work reasonably well in different situations. At one pole is an ‘integrated system’ with doctors attached to hospitals, consulting on site and salaried to it; at the other pole is a fully privatised service of all facilities, including the doctors; and there are variants in between. On Norfolk Island, having a public medical service and privatised doctors is very likely to give rise to a dog’s breakfast in which the doctors and the community are both losers. There are a number of reasons for this. First, given the size of the Norfolk Island population it is extremely unlikely that a practice of two GPs could set up and make a living if doctors restrict their charging to the MBS scheduled fee. Therefore bulk billing will become irrelevant and prices will rise. Under Medicare private practice GPs are rewarded on a fee for service basis, which rewards shorter consultations and high patient throughput. Furthermore, as far as the doctors themselves are concerned, there has been a trend away from doctors wishing to set up in private practice in rural Australia, and this appears to follow a worldwide trend.
Space forbids an extended discussion of issues surrounding the possible privatisation of aged care services (a big one), let alone physiotherapy, the laundry, cooking, and cleaning. But let’s see what can be said on the basis of what we have already described.
Privatisation does not provide an appropriate overall model for the provision of health services on a small island such as Norfolk. Integration into a single service with salaried doctors (and including a dispensing pharmacy) is likely to be far better for patients in terms of service delivery, and indeed for doctors as well. Furthermore an integrated service is likely to be much better placed to respond to major disasters on or around the island. Norfolk Island’s health service should not be constructed around the convenience of DIRD.
However beyond these reasons for advocating an integrated system is another of great importance. The ‘hospital’ has never been, and should not become, merely a delivery system. It has been a powerful symbol - of community values, of shared experiences and the bonds of affection which have united individuals and families in this island community – and should remain so. To envisage the ‘hospital’ as a disparate collection of individuals and groups competing with each other for private profit would be to greatly impoverish its meaning.
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27. SOME SIMPLE ECONOMICS THAT THE AUSTRALIAN GOVERNMENT SEEMS TO HAVE FORGOTTEN – OR DOESN’T WANT TO KNOW
On Tuesday 21 June, the Australian Department of Immigration and Border Protection and the Department of Agriculture and Water Resources sponsored a public meeting at the Paradise Hotel on the subject of importing food to Norfolk Island. During the course of the meeting, the Chair, when asked about the possible deleterious effects of the expanded importation of primary produce on local agricultural economy, is reported to have commented along the lines of: “Well, market forces must prevail”. In the context, this was a very ill-advised statement to make.
The economic idea behind the Chair’s statement is, as any first-year economics student knows, that a well-functioning market is a benefit to society because it is ‘efficient’: in other words, this means that in such a situation an individual (or business) can achieve something with the minimum use of resources. That’s sounds good, but unfortunately it does not make the Chair’s statement any the less unwise. Here’s why.
Suppose we have a country A, and an offshore tax haven B accessible by wealthy individuals from A. Suppose that a citizen of A, moves all his wealth from A to B in a series of perfectly legal steps, to escape paying tax in A. He (or she) has not only done this legally, but also ‘efficiently’ in accordance with market principles. The process is very efficient, because the individual has accomplished his desires at minimal cost. However from a broader community perspective, almost everyone else in country A would consider this situation grossly unjust and unfair, and that the individual should pay his fair share of tax to the country which supports him and provides him his residence. So it is very clear that efficiency, while important economically, is not the end of the matter.
This simple example shows something else as well: that what is deemed to be efficient is determined by what is legal: change the laws and what is efficient also changes. First comes the law, and only after that the efficiency. It is by this means that issues of importance in a society – such as public order, democracy, human rights, public health and so on – are protected beyond the market system. So what a third-year economics student would recognise is that when it comes to issues of importance to society, economic efficiency must be counter-balanced against other issues that underpin the success of the society as a whole. Take democracy: this is based on the idea of ‘one person one vote’, which is a different criterion from that of market efficiency: ‘one dollar one vote’. It is therefore evident that in any advanced society an equitable balance needs to be achieved between these differing demands. Or again, take the idea of environmental sustainability: this is a different criterion from market efficiency, and the one does not imply the other.
And so back to our original example, the importation of foods to Norfolk Island: a very important issue for a small island economy. Without doubt a viable and vigorous agricultural sector is important in providing fresh, seasonal, disease-free produce for residents and tourists alike, in keeping dollars earned within the island economy, in providing an employment alternative to tourism and sustainable husbandry for the Norfolk countryside and green environment. So, in considering the opening up of Norfolk to imported produce (in the name of increasing so-called ‘consumer choice’) and the threat that this is likely to pose to the viability of island agriculture, it is important that a wise balance be struck between the two competing needs.
In a similar incident to that recounted above, the Norfolk Island Administrator Hon Gary Hardgrave, interviewed on Radio New Zealand on 29 June 2016, dismissed claims made by the president of the Norfolk Island Chamber of Commerce that businesses on the island were distressed, suggesting that new businesses are set to open. The Administrator commented: “The main street has businesses coming and going and it is just the reality of life”. Rather than indulging in this type of metaphorical arm-waving, the Administrator and his advisors would be better advised to study the evidence, and to take into account broader issues and the longer term.
What both these comments by Australian Government representatives have in common is the notion that economic efficiency is all that matters, and that the effects of major change on the livelihood of those involved, and the future direction and sustainability of the island economy, are beyond concern. They say simply: “We don’t care.”
- Chris Nobbs.
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25. NORFOLK ISLAND IS NOT AN AUSTRALIAN COUNTRY TOWN
It has been said by Australian politicians and others arguing in favour of the current “transition”, that Norfolk Island is “no different from an Australian country town”. There are at least four good reasons why this is not so. Let’s look at them.
The first reason is perhaps so obvious that we tend to miss it. The situation we are confronted with is rather like trying to stuff a flexible bag into an undersized box. You can stuff it in one side and close the lid, only to find that it is poking out somewhere else. Norfolk Island used to be an external territory with its own set of laws, regulations and practices. The Australian Government then declares it to be part of Australia and wants to stuff it in the “no different from an Australian country town” box: say like Cobar (pop. 3,817) in NSW, or Longreach (pop. 3,137) in Queensland. But then… but then if you want to travel to Norfolk Island you have to take an aeroplane, you travel from the international air terminal, and ideally still take you passport with you. You have to have customs and quarantine checks to get there. If you want to vote in the Federal election you vote in an electorate 1,900km away, and you don’t get a vote in the state elections. And then you don’t pay Australian GST either. Does that sound like any town you know in NSW or Queensland?
In any small country town in Australia you can always catch a bus or a train to the next larger town in order to get what you need, or you can have goods freighted in rapidly and at moderate cost. Or you can just get in your car and drive there, or to Sydney or Brisbane (Cobar is about 700km from Sydney, Longreach 1,000km from Brisbane), or even to Perth if you feel like it. What this expresses is the reality of the continuity of landmass under your feet and of the continuity of individual experience.
You can’t do these things if you are on Norfolk, which is almost 1,500km from anywhere on the Australian continent, and there’s a lot of water in between. Here the physical system is discontinuous, and so is the individual experience. It defines what might be called a “quantum leap” between island and continent. It is the primary fact of economic and social life on isolated islands such as Norfolk, and the one that dominates all others. If you lose your job on Norfolk Island for whatever reason, the cost may be emigration. If you need to go to Sydney to consult a specialist doctor, the return airfare to get there is around $600-$800, and because there are flights on only two days a week you may need to pay for accommodation as well: and that’s before you pay the doctor’s bill. General goods ordered from Australia may take 5-6 weeks to arrive by ship, with freight costs of $500-$720 per cubic metre.
Small isolated islands such as Norfolk tend to be conservative, resourceful and to “make do”. These are characteristics that are shared with country towns, but it is the extreme nature of the isolation experienced by islands that contradicts any easy affiliation of one with the other. One particular aspect of this relates to natural resources and the environment, and the need for husbandry. Whereas in inland Australia if a few square miles of country are lost to salinization or land degradation (say), it is possible to move to new. No such opportunity exists on small islands: what you have is all you get.
Finally we may note Norfolk Island’s maritime history and distinct and separate culture. It is commonly unrecognised by Australians that the post-convict settlement of Norfolk Island did not happen by way of Australia, but from the eastern Pacific, by people who had never set foot in Australia, and in those early days, never did. And they brought with them their own culture, traditions, and language. They have their own anthems, their own festivals, their own flag. And they had universal female suffrage over one hundred years before Australia could claim the same.
So next time someone says to you “Oh you’re no different from an Australian country town”, you may need to consider whether they do so through unawareness or through prejudice. Unawareness is easier to forgive, and easier to correct.
- Chris Nobbs.
[Other articles, letters on Norfolk Island at: http://www.norfolkonlinenews.com/chris-nobbs.html]
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24. AUSTRALIAN GOVERNMENT’S LEGACY TO THE REGIONAL COUNCIL – A POISONED CHALICE?
In the midst of the tumultuous changes that are happening on Norfolk Island, people have started to ask: Where is the Norfolk Island Regional Council (NIRC) going to get the money it needs to run the island? On this subject there is much that has not been made public by the Administration, but let’s see if we can give some context and add a little clarity.
Back in earlier times, 2004-05, the Norfolk Island Government (NIG) annual report’s record of income and expenditure noted income $24,551,220, expenditure $23,553,196 for a small surplus of $998,024, or after an allowance for depreciation a small deficit of $997,404. No money was borrowed or given by the Australian Government. The consolidated balance sheet showed net assets of $34,529,032 (excluding land). That was pretty much the position that Norfolk Island held over decades of modest living and steady management.
Then there followed the fateful decision by NIG to invest in an airline which proved unprofitable, drained the coffers, and was finally closed in 2012. While this process was going on, the world experienced the Global Financial Crisis of 2007-08, and tourist numbers to Norfolk plummeted. It was in the wake of these events that the NIG first asked the Australian Government for a loan ($3.8m). (One can criticise the airline investment, but it is worth recalling that much grander outfits than the NIG have been brought to their knees by similar moves: consider Air New Zealand’s purchase of Ansett Airways back in 2000 which almost bankrupted Air New Zealand, and which was only restored to success with national government assistance.)
Fast forward to 2014-15. NIG income is $38,307,358 (including revenue from the Commonwealth of $6,644,552 under the Funding Agreement of that year), expenses are $$39,992,619 for a surplus of $3,811,912 - after additional accounting elements are taken into consideration. Net assets are $65,156,845 (here including land). Since 2015 the Australian Government through the transitional Norfolk Island Administration (NIA) has removed many functions from the NIG, including the running of the hospital and social services. Also removed has been the ability of NIG/NIRC to raise money from its traditional sources: notably the NI-GST which raised about $6.5m annually for the government.
So where do we stand now? An indicative budget for FY 2016-17 - commencing in two weeks’ time – remains unavailable to the public. However from the NIA 2015-16 budget report we might guess expenditures roughly of around $25m for next year, revenues of around $17m and a deficit of around $8m (this excluding the now Federal and State functions). There are two key questions for the future: What are the major financial issues facing the NIRC? And: How will it finance its budget?
The first issue is debt. The NIRC inherits a debt of around $11.2m remaining from an interest-free loan of $12m provided by the Commonwealth to finance the reseal of the airport runway in 2006-07. The NIRC will also need to find funds to complete the next resealing, due in about 2020.
Then there are pressing infrastructure needs. Of perhaps most immediate concern is the need to repair the road network which has been allowed by NIA to descend into the worst state of disrepair in living memory. Major decisions will also be needed on the future of the electricity supply, and the supply of rock and aggregate. And it does need to be acknowledged here that the Commonwealth is contributing substantially to the upgrade of the Cascade jetty and the high-temperature incinerator ($13-14m).
Then there is economy proper. At its heart must be tourism, which has been the source of the island’s livelihood for over 70 years and represents our best core opportunity for the future. Recent calculations for tourist accommodation houses suggests that the introduction of the full panoply of Australian employment laws by 2018-19 will plunge accommodation houses, and with it the tourism industry, into crisis. No figures exist as to how the retail sector on the island is currently performing, but shop closures have already commenced. In the past, the NIG has provided around $1.3m a year to promote Norfolk tourism overseas, but the Commonwealth has provided no guarantee that it will continue to do the same. If it falls to the accommodation houses to self-fund this marketing, then their outlook will be even bleaker than it is. There is a further problem here too. Even if the economy improves, there is no direct means by which the NIRC can capture the increase for the island (as the NI-GST did), as all taxes payable are payable to Canberra.
There are a number of permitted ways by which councils can raise money (1). Those applicable in Norfolk’s case include: ordinary rates on land and buildings according to their usage; special rates to finance particular works; fees and charges for services provided e.g. sewerage, drainage, building approvals; grants; borrowings; income from business activities; and the sale of assets.
So how will the money be raised? Norfolk Island currently has around 1,800 citizens, and there is no way by which it can raise the money required by itself: unless perhaps it returns to the more frugal lifestyles of the past. For Norfolk Island, as for all small isolated islands, the perennial problem is how to finance infrastructure development, and the current transition has changed nothing in this regard. With no income assured to NIRC as of right, it seems to me that Norfolk is in danger of being forced into perpetual dependence on the Canberra begging bowl, while being propped up by social security payments to individuals. On the other hand, a rental payment by the Commonwealth of $8m a year for the facility of a strategically placed aircraft carrier in the western Pacific, together with oversight of Norfolk Island’s EEZ, should be considered a worthwhile investment don’t you think?
- Chris Nobbs
(1) See: ‘Chapter 15 How are councils financed?’, in NSW Local Government Act 1993 No 30 , http://www.legislation.nsw.gov.au/#/view/act/1993/30/full
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23. FUTURE FOR NORFOLK'S TOURIST ACCOMMODATION HOUSES LOOK BLEAK
Tourism is key to Norfolk Island’s economic well-being and its ability to pay its way in the world. So it is important to try to understand the effects on the tourism sector of the Australian Government’s proposed changes to taxation and employment conditions on the island.
In recent weeks I have tried to address this issue by setting up a “model” of a tourist accommodation business, and trying to chart its course over the next three financial years as the various Australian Government changes are introduced. My model business consists of 10 units, is run by owner/managers (assumed to be running the business as a partnership), and employs three to four staff (some permanent, some casual). Major future changes include: income tax, depreciation allowances for businesses, and the special area zone tax offset for individuals; adjustment over time of pay rates to the minimum wage under the Australian National Employment Standards; employee superannuation; and the introduction of penalty rates and other conditions under the Australian Modern Award System (MAS).
Taking into account these coming changes, and making a number of essential assumptions about how the business functions, it is possible to project profit and loss for the business over the coming years. (Economic variables not associated with these changes, are by and large held constant.) The results of calculations for a “base case” scenario for this modelled business are set out in the Figure. They show that under the assumptions made, the outlook is indeed bleak, with individual after-tax income falling from around $27,600 in 2015-16 to around $18,500 in 2018-19: a 33 per cent drop. Yes, that’s right, 33 per cent.
In the first year of the changes (2016-17) the business shows a net benefit from the effects of the NI-GST removal, depreciation allowance and special zone tax offset, but this is rapidly eaten away by rising minimum wages, and in the year 2018-19 by penalty rates under the MAS. These numbers raise very serious concerns not only about the future income for accommodation business proprietors, but also their ability to invest and ensure their businesses are economically sustainable. In addition they indicate a reduced capacity for these businesses to engage in marketing activities to attract visitors to the island, which will also have an adverse impact on the economy more generally.
We do need to look at the assumptions being made however. In our “base case” the assumptions are in fact very “middle of the road”, even conservative. It is assumed for example that the annual minimum wage determination by the Fair Work Commission will see the Australian minimum wage rise at 2.4 per cent per year over the next three years, which is less than the average over the last four years; in the new regime (2018-19) all employees are paid no more than the minimum wage; and it is assumed that tradespersons’ hourly rates increase at only 10 per cent per year.
One assumption used in the “base case” scenario is that the employer will pay an adjustment to employee wages to cover employees’ income tax for the first two years (2016-17 and 2017-18). The reason that this assumption has been included is that several business houses on Norfolk already intend to do this, and employees are themselves negotiating with potential employers to achieve it. (If this adjustment were continued into 2018-19, then employer income after tax would drop to around $15,000.)
Fortunately, no one needs to take on faith what I have just described. There will shortly be a full description of the model including the changes being introduced, the assumptions being made and the calculations involved, available to anyone who wishes to see them. Moreover the model has also been set up as an Excel spread-sheet, so it is possible to change the assumptions and see immediately what effect they have on the outcomes. These things are currently being held by Rael Donde, President of the Accommodation and Tourism Association, who will be able to provide them.
It is hoped that this modelling may provide a starting point for an informed discussion on the future of tourist accommodation and the tourism industry on Norfolk Island, and lead to intelligent policies to support and improve them.
- Chris Nobbs
Note. This model could not have been developed without advice and assistance from a number of business people across the island, and I thank them most heartily. The model has the endorsement of the ATA Executive.
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THE NORFOLK ISLAND ADMINISTRATION’S TRANSITION PROCESS IS A TRAIN WRECK
Let’s get real: the transition process being orchestrated by the Norfolk Island Administration and the Australian Government (and notably the Department of Infrastructure and Regional Development - DIRD) is a train wreck, and all Norfolk Islanders are having to bear the cost of it. Here is a short selection of observations from the available evidence:
- Tourism is the island’s pre-eminent industry. The Administration closed down the Tourism Board in June 2015, and the Norfolk Island Tourism Strategic Plan 2103-2023, endorsed by the Legislative Assembly and all stakeholders, remains in abeyance. No alternative form of organisation or objectives has been presented. A Brisbane consultant has recently been engaged by the Administration – not through any open procurement process - to plan a destination marketing campaign for Norfolk Island, but it is unclear how this relates to anything that has preceded it, and it is being conducted without any on-island industry consultation or collaboration.
- The Norfolk Island Post Office was the property of the Norfolk Island Government and paid for by Norfolk Islanders. This asset has been given away by the Administration to Australia Post. In their turn Australia Post has given away the franchise for its operation without the conduct of any public tender process or consideration of value, and has located it without any planning consideration at one of the most dangerous road intersections on the island.
- It is astounding that the Administration has not been able to agree on long-term contracts with the island’s most important professionals, namely its doctors, four weeks out from the transition changeover day. The Administration does not even appear clear as to how the island’s doctors will function in relation to the hospital itself.
- On 30 May 2016 Austrade and Tourism Australia came to Norfolk Island to conduct a seminar on international tourism markets. However interesting this may have been, it was largely irrelevant to Norfolk Island as these organisations deal only with markets beyond Australia (and also to a large degree New Zealand). Pleas over many years to provide Norfolk Island tourism operators access to the Australian Tourism Data Warehouse, into which operators could provide digital content, and which deals with Australasian tourism, remain unanswered; Tourism Australia’s primary international marketing website Australia.com has not even provided a link to Australia’s eternal territories.
- Over many months there has been a systematic practice by the Administration of avoiding contact with local professionals with local experience and knowledge, in relation to the hospital, the Hospital Board, Chamber of Commerce, Accommodation and Tourism Association, to name but some. This practice has also extended to consultants and bureaucrats brought to the island by the Administration.
- The self-important Commonwealth project of earthworks at Channer’s Corner and the footpath to Burnt Pine appears designed to turn it from that of a rural township into an image of suburban Canberra (current cost over $750,000). The footpath itself is to be made of a tar seal. This will ensure that in hot weather passers-by will trample detritus into shops, and in its short lifetime will crack and grow weeds. Given Norfolk Island conditions, concrete as used in the footpath from the Corner up Queen Elizabeth Avenue, would have been the intelligent person’s choice.
- Very recently an Australian Government and DIRD fact sheet was issued under the title of “Domestic travel between Norfolk Island and mainland Australia”. Here it is said: “If you don’t have a passport, other forms of photographic identification …. should be acceptable”. So how does one do “should” when standing at the Immigration desk? The fact sheet also gives information on travel insurance and medical evacuation for Australians, but provides no information whatsoever on these matters in relation to New Zealand, which comprises one third of Norfolk’s tourism market. Question: Have these issues been discussed with Air New Zealand yet?
- The letting of the contract for the private pharmacy to replace that at the hospital was so long delayed that it is unlikely, even with the best of intentions on the part of the pharmacist, that the pharmacy can be adequately prepared by 1 July 2016. The building up of stocks and secure storage may take months. And there are further questions about this move to privatisation: Who will bear the cost of providing emergency drugs to the hospital out of hours? Or the cost of stocking very expensive modern medicines? Or of covering for the pharmacist when off the island?
- As reported in The Norfolk Islander of 21 May, a call for expressions of interest for project management of the Norfolk Island Hospital and Central School upgrades was placed by the Executive Director in the Norfolk Island Gazettes No.14 of Monday 21 March and No.15 of Thursday 24 March, and in The Norfolk Islander (the commonly accessed source for gazetted announcements) on Saturday 26 March, for submissions which closed on Monday 28 March (the 26th being Easter Saturday and 28th Easter Monday). The position was filled on this basis. This suggests a case for review by the in-coming Regional Council.
- Finally we note that the last three weeks have seen the resignations from the Administration of the Chief Executive Officer, and the Human Resources Manager.
In summary it appears that the Administration’s plans have been and continue to be poorly thought out, opaque to the public, shoddy and hand-to-mouth in execution, to have failed to take account of local expertise, and wasted money. And the mal-effects of these circumstances are borne by all Norfolk Islanders. So I’d encourage all other trainspotters out there to pursue their observations on the Administration as in the past, and to record their results in The Norfolk Islander, on Norfolk Online, and in the social media.
- Chris Nobbs.
[Other articles, letters on Norfolk Island at: http://www.norfolkonlinenews.com/chris-nobbs.html]
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JOBS AND THE NORFOLK ISLAND PUBLIC SERVICE
In response to news reports of staff sackings from the Norfolk Island Public Service (NIPS), Executive Director Peter Gesling said on Radio New Zealand:
“I don’t have the full data to back that at this stage but at this stage there would look to be more jobs than there are current people so that’s why jobs are being placed on the open market in Norfolk Island.” (12 May 2016)
This statement sails very close to the wind. Let us look at some of the details. The staff establishment of NIPS as at December 2015 stood at 149 public servants (72 fulltime ‘ongoing’ employees, 40 on fixed period contracts, and 37 ‘casuals’ on non-renewable contracts). The planned indicative establishment for the staff of the Norfolk Island Regional Council (NIRC), which is a quite different organisation, after July 1, stands at around 110. The difference between these two numbers is mainly comprised of current public servants whose roles have been made redundant or transferred out of the public service.
To point to some examples for on-going and fixed period contract employees: (i) closed down – GST Office, Philatelic; (ii) shrunk - Waste Management, Works Depot, Forestry, Liquor Bond, Legal Services; (iii) transferred to Commonwealth - Immigration, Customs, Quarantine, Social Services, Post Office (to Australia Post and outsourced); (iv) transferred into NIRC – Tourism. (The Hospital remains outside the NIRC structure).
So are people actually losing their jobs? My understanding of the process of ‘transitioning’ employees to the NIRC goes as follows. For permanent or ‘ongoing’ employees: if there is a minor or no change in role from that which they have been performing compared to that in the new structure, and at the same level, then he or she transitions ( with a salary that maybe lower than present but cannot be higher). If there is a substantial change in role or the position is no longer required, then the employee can accept redundancy or opt to stay with NIRC. If this latter option is chosen, then an analysis of that person’s skills and so on is used to see if an appropriate new role in the NIRC organisation chart exists. If it does not then the employee is declared potentially redundant; if there is, and there are others also seeking that position, then there will be a competition on merit for the position. If he/she is successful in that competition then he/she transitions, if not, he/she can apply for any advertised position on a merit based selection process, or be declared redundant.
For fixed period contract employees: if the role is required in new structure beyond 30 June 2016, then their contract runs to expiry (contracts expiring after 1 July 2016), or alternatively a new contract is advertised (if expiry is pre-1 July 2016). If role is not required, then provided they meet some merit criteria they can enter the ‘legacy employment pool’, in which case they may be offered short term contracts in the future. For casual employees if their position is required in the new structure after 1 July 2016, their casual employment transitions; if not, then they can apply for other advertised NIRC positions on a merit based selection process.
As the public service is being shrunk by over one quarter, it appears extremely likely that some employees will be disadvantaged in terms of their salary/wages, or indeed lose their jobs against their wishes. For those who celebrate the free market - the pursuit of ever smaller government, fewer publicly provided services, and the supposed reduction in ‘consumers costs’ - there will no doubt be much to celebrate in all these changes. That is not a view I support, as public service provision provides community stability, collective memory, and enshrines important community-held values. These concerns are made more compelling on small islands, where individuals who lose their jobs or have them downgraded are friends, associates, or familiar young couples with children and mortgages (as some of those caught up in the present Norfolk Island transition are). For many the choice will not be in finding another job, but migration. This tears at the social fabric of the island.
In the Norfolk Island Government Gazette of 13 May 2016 applications were invited for a total of 39 vacant positions in the new NIRC structure. Do islanders get any preference in the competition for these positions? As the NIG Gazette is published on the web, its content is accessible throughout Australia. It is understood that enquiries have been received from beyond Norfolk Island for these jobs, but whether those people have applied or been permitted to apply, is unknown. The qualifications required for some of these positions will make it difficult for existing staff to meet them, and training as an issue has scarcely received a mention. We do know from the Norfolk Island Administration HR Policies and Procedures Manual that for candidates of equal merit the Norfolk Island resident is to be preferred. However in a situation in which the Administration has in the past sacked individuals for making mildly satirical statements on Radio Norfolk, what confidence can there be in the way they select staff?
Be that as it may, there is another aspect of the new arrangements which appears quite extraordinary. In the old system, under the CEO were 12 managers of various departments. In the NIRC organisational structure these managers have been rebadged as ‘team leaders’ and a whole new level of senior management added over the top. Eight new contract senior management positions have recently been advertised in Australia and presumably beyond that by HR consultants McArthur, and it is understood that interviews have been held. Indicative salaries suggested are over $100k. So while the public service has shrunk by one third, a bloated top-heavy management layer is being added to the bureaucracy, burdening the NIRC with a salary bill of over $1million - which is more than the total value of land rates that the NIRC is expected to raise in 2017-18. Or in other words, each new upper-level manager is to be paid off the backs of only 120-odd Norfolk Island ratepayers! This is madness. One of the first jobs of the new NIRC should be to review these positions and do some sacking.
- Chris Nobbs
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20. SOME REASONS WHY
The following article was recently submitted to The Age newspaper’s Comments column in reply to an article on Norfolk Island published in that column over the signature of the Minister for Territories, Hon. Paul Fletcher. This reply was not selected for publication in The Age, so it is appearing here in a slightly edited form.
Norfolk Island’s Appeal to the United Nations
On 25 April 2016 in New York, Geoffrey Robertson QC, on behalf of Norfolk Islanders, handed a petition to the UN Decolonization Committee requesting that the island be listed as a non-self-governing territory. Settled in 1856 by the Pitcairn Island descendants of the mutiny on HMS Bounty, Norfolk Island has been an external territory of Australia since 1914.
On 2 May Australian Minister of Territories Paul Fletcher responded to this in The Age Comments column, giving a recital of what he believed was wrong with Norfolk Island and how Commonwealth intervention would fix it. This was a mixture hyperbole and half-truths. The Minister opened with the statement that Norfolk Islanders are not covered by Australian Medicare or the PBS. If he were completely truthful he would have explained that alternatively the NI Healthcare Fund covers 100 per cent of the Australian Medicare schedule fee, and that once the NI Healthcare threshold is reached, all approved medical services including prescribed pharmaceuticals, are free.
But we should examine some history. The Norfolk Island Act 1979 made clear the intention of the then Commonwealth Government that Norfolk Island should move towards a form of internal self-government, with the Commonwealth’s guidance and assistance. Subsequently however, promised reviews of the workings of the Act did not occur; island initiatives for revenue-raising projects were invariably denied; and the Island’s Administration was not permitted to use debt or bond financing without the Commonwealth’s permission, which was never forthcoming. If the island’s infrastructure is now run down then the Commonwealth bears a major responsibility for that fact.
During the 1990s the Norfolk Island Government lived modestly and continued to cover current expenditure. In the 2000s the revenues received two serious blows, first from an injudicious investment in an airline, and second from the GFC which caused a serious downturn in the major industry, tourism. Norfolk Island appealed to the Commonwealth for financial support over its debts (less than A$5m). Their exaction was that the island join the Commonwealth tax and welfare system.
In 2011 a Road Map document was agreed between the Commonwealth and the Norfolk Island Government on working together to strengthen the economy and society. In that document the Commonwealth acknowledged the desire of the original Pitcairn settlers to preserve their traditions and culture, and “supports the goals of the Norfolk Island community through a mutually acceptable and appropriate modified form of self-government”.
The Commonwealth subsequently unilaterally repudiated this agreement, and the Minister referred an inquiry into economic development on Norfolk Island to the Joint Standing Committee on the National Capital and External Territories (JSC). However the major recommendations of the JSC report did not deal with economic development, but with governance. This went far beyond the terms of reference of the inquiry, and for many on Norfolk Island was felt as a stab in the back.
The Norfolk Island Administrator Hon. Gary Hardgrave reported to the Minister that “change in governance arrangements is supported [sic] by a substantial majority of Norfolk Island residents”. There is no evidence available in the public domain to indicate that this is true. It was contradicted in a formal Referendum which in a turnout of over 92% of island electors, 70% of votes validly cast were against such change.
The Norfolk Island Legislation Amendment Act 2015 passed in the Australian Parliament stripped Norfolk Island of its limited self-government, denied special mention to its Pitcairn heritage, and mutated it into a regional council on a NSW model. This mutation is to be completed by 1 July 2016.
To bring about these changes the Commonwealth has swept in with jackbooted determination. The Minister, Department and transitional Island Administration severally no longer respond to legitimate inquiries from the island public, have gagged free speech on Radio Norfolk, restricted community input to a puppet advisory council, dismantled the Legislative Assembly chamber in the World Heritage KAVHA area, and removed Island public servants to be replaced with Commonwealth appointees. With this laager mentality it is assumed that fly-in fly-out advisors from 1,900km away, armed with abstract models, invariably know best. However as UN ECOSOC recognises, small islands face unique sustainability challenges requiring careful attention, not solvable by simplistic makeovers. Lived island experience counts for much in these circumstances.
There is great and understandable fear on the island that the planned wholesale introduction of Australian tax, superannuation, rates, regulatory and compliance requirements, employment law, and property rates will raise costs and prices significantly. Model calculations for the tourism industry indicate economic contraction for an already stressed industry: lower profits and ability to invest, loss of competitiveness and loss of jobs. This will do immense damage to the island’s economy. Combined with the introduction of unrestrained immigration it will likely destroy the social fabric of the island as well.
What the present stoush has exposed is the Australian Government’s reprehensible conduct toward Norfolk Island over years. And it demonstrates how powerful an idea democracy is for those from whom it is being taken away. Norfolk Islanders have few options left in their appeal for fair and decent treatment. That path clearly leads beyond Australia.
- Chris Nobbs
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19. NORFOLK ISLAND ACCORDING TO THE SBS: WHAT WAS THAT ALL ABOUT?
Yesterday afternoon I was really looking forward to the SBS TV programme on Norfolk Island entitled ‘A Modern Mutiny: Untold Australia’. I felt there was a genuine need for the pros and cons of the situation on the island - involving as it does the opposition between a Norfolk Island and an Australian Government perspective - to be aired and discussed well in public. Perhaps the multicultural channel SBS was the medium to provide it: after all the word ‘mutiny’ in the title suggested one thing in opposition to another. After having watched the programme, I was left wondering what it was all about. The programme was promoted as a documentary. It could be called a documentary in the sense of recording what people said and did in front of the camera. But as for being a documentary in the sense of being an objective presentation of issues, it was not.
The juxtaposition of the two thematic characters of a older generation Norfolk Islander showering at his home in his underpants, and squeezing lemons to make his Bounty Day liquor, and the Australian Administrator driving around in his 4X4, criticising current Norfolk Island conditions and showing how the Australian Government intended to fix them, was crudely reductionist and a parody of the real issues facing Norfolk Islanders. The programme failed even to grasp the core issue on the island: namely the contestation between two positive but different approaches to the island’s future.
The SBS programme added insult to injury after its camera crew attended the Community Meeting held at St Barnabas Parish Centre on 10 June 2015. The meeting was attended by some 120 islanders, and there were several speeches made dealing with major island issues and what might be done about them. However of this nothing was heard in the SBS programme, which chose rather to highlight a speaker from the floor making an impromptu uncomplimentary comment about the Australian Government.
The final sequence in the film showed scenes of the Administrator in front of the word ‘Mutiny’ which had been painted on the wall of the compound in the KAVHA World Heritage area. The Administrator referred to this as vandalism. On that matter we can agree with the Administrator, and that such vandalism is unacceptable. However to many on the island, the removal of the furniture and fittings of the Norfolk Island Legislative Assembly from the Old Military Barracks in the KAVHA World Heritage area also constitutes vandalism. This programme chose to mention only the former example.
So what was the programme all about? Was it a genuine attempt at a documentary film fallen victim to a terrible ignorance? Was it a pot-boiler merely to amuse mid-evening couch dwellers? Or was it a propaganda video in favour of the Australian Government? It is hard to tell. Norfolk Islanders, whatever their political inclination, would have reason to feel offended by this programme. And sadly too, SBS stands diminished by this episode.
- Chris Nobbs
[Earlier letters in this series are available at: http://www.norfolkonlinenews.com/chris-nobbs.html]
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18. AUSTRALIA’S RELATIONS WITH EAST TIMOR BACK IN THE NEWS: ANY LESSONS FOR NORFOLK ISLAND?
Citizens of Norfolk Island who might casually think that the Australian Government is primarily here to help them, might wish to consider the situation of East Timor and its relations with Australia, which have returned to the media spotlight in recent days.
The island of Timor lies along a chain of islands that is part of the archipelago which constitutes Indonesia, and is distant about 600km NW of Darwin. The eastern part of the island is the sovereign state of East Timor (Timor-Leste) with capital Dili, while the western part remains a province of Indonesia, with Kupang the main town. (The harbour at Kupang it will be recalled was where Captain Bligh ended his epic journey of 5,800 kilometres across the Pacific in his 23-foot open boat.)
Abandoned as a colony by the Portuguese in 1974, East Timor suffered invasion by Indonesia in 1975 and a resistance struggle ensued. Finally, and after a period of administration by the United Nations during which a United Nations-sponsored act of self-determination was held, East Timor emerged as an independent nation in 2002. It has a population of about 1.3 million, and is one of the poorest countries in the world, with GDP per capita of less than US$4,000. It is ranked 147th out of 187 countries on the UN’s Human Development Index.
The key to East Timor’s economic development now and in the future lies in the opportunities provided by the natural gas and petroleum reserves in the area between it and Australia, often referred to as ‘the Timor Gap’. There are three treaties relating to the exploitation of these reserves in the Timor Gap: the Timor Sea Treaty (2002); the Sunrise International Unitization Agreement (2003) which allocated shares of resources in the Greater Sunrise ‘joint petroleum development area’; and the Treaty on Certain Maritime Arrangements in the Timor Sea (CMATS)(2006).
Under the Sunrise IUA the known petroleum resources were apportioned so that Australia received 82 per cent of the total resource, leaving impoverished East Timor with 18 per cent. This gross imbalance was to some degree mitigated in the CMATS treaty, which provides for a 50:50 split of revenues derived from the field. (Australia has however ensured that the refining operations are carried out in Darwin rather than in East Timor.)
An ongoing problem with these treaties is that the maritime boundary between Australia and East Timor remains undefined. (In fact it has emerged that CMATS includes a clause that requires that the maritime border issue not be raised for fifty years.) Australia has steadfastly refused to discuss the matter of where the maritime boundary between the two countries should lie. It is East Timor’s contention that under international law the vast majority of the estimated US$40bn of oil and gas reserves of the Timor Gap would fall within its territory.
In April 2013 East Timor formally notified Australia that it was exercising its right to arbitration under the Timor Sea Treaty, and was initiating a case at the Permanent Court of Arbitration in The Hague to argue that CMATS is invalid because Australia conducted espionage and did not negotiate the treaty in good faith. The underlying reason for this claim it has turned out, was the fact that in 2004 under the guise of an aid project to renovate the Prime Minister’s office in Dili, Australian spies installed bugging devices which could well have been used during the years of treaty negotiations, to Australia’s commercial advantage. In a remarkable dressing down by an international tribunal, the International Court of Justice (also in The Hague) in March 2014 ordered the Australian Government to stop spying on East Timor and its legal advisors.
Late in 2013 lawyer Bernard Collaery, who was leading East Timor’s case in The Hague, had his Canberra house raided by ASIO and documents seized. The raid was authorised by Australian Attorney-General George Brandis. In addition, a key witness in the hearings in The Hague, the former Australian foreign intelligence service agent who ran the bugging operation, had his passport seized, and current Foreign Minister Julie Bishop has determined that it should not been returned, on the grounds of ‘national security’. Independent MP Andrew Wilkie, himself a former intelligence analyst has recently commented: ‘Every way you look at this it’s grubby’. Mr Collaery has noted that the issue raised broader questions about whether Australia abides by the requirements of the international treaties it signs.
On 11 April 2016 East Timor announced that it will be seeking compulsory conciliation proceedings under the United Nations Convention of the Law of the Sea (UNCLOS), to determine where the boundary between the two nations lies. Australia’s moral reputation is very much on the line internationally, and for all to see. It will be very interesting to see what transpires.
- Chris Nobbs
The evolution of this sorry story can be followed at many places on the Internet, including Wikipedia. East Timorese community-based reportage can be found at:
Recent items in Australian news media include: Steve Cannane, ‘East Timor bugging scandal’, ABC Lateline, 3 February 2016; and Tom Allard, ‘East Timor takes Australia to UN over sea border’, Sydney Morning Herald, 11 April 2016.
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17. HOW TO DISMEMBER A COMMUNITY – THE AUSTRALIAN GOVERNMENT AND NORFOLK ISLAND
Lessons from the Scottish Highlands
The major reason why the Scottish Highlands of today are so empty of people is a consequence of what are known as the ‘Highland Clearances’ of the eighteenth and early nineteenth centuries. In earlier times the Highlands were populated by people holding traditional land tenancies and practicing small-scale agriculture. However the aristocratic landowners saw profit in the new industries associated with sheep raising, and so they drove many thousands of Scottish peasants off their lands, often with considerable brutality. This resulted in the dispersal of Highlanders across the globe, and in the destruction of much of Gaelic culture. One culture eventually replaced another.
While the analogy with Norfolk Island’s current predicament is not complete, it is important to give some thought to the social aspects of the process of transition imposed by the Australian Government on the Norfolk Island community: what is being done, what is being lost, and how the island’s traditional culture and practices might be retained or modified according to the wishes of the people. At its simplest a ‘community’ is a group of people living in the same place or having a particular characteristic in common. So it can have a geographic aspect, such as people living in a small town; or it can have a quite different characteristic, such as a community of religious belief which, while a community in that sense, is likely to be widespread geographically.
Norfolk Island as a community shares both of these attributes – at once being geographically isolated, and also being a population with a shared interest in successful economic and social outcomes for its members. Islandness and isolation emphasise the need for islanders to hang together in mutual support in the face of both natural and man-made insecurities of island life.
Travel writer Andy Jarosz in 2010, on a visit to the island of Barra in the Scottish Outer Hebrides, listed six characteristics of what he refers to as the ‘seductive charms of life on a small island’: a ‘sense of total trust’ and absence of crime; ‘no-one is a stranger’; ‘everyone knows others’ business’; ‘common greetings’; ‘the concept of “the Mainland”’; and ‘many hats are worn’ (meaning people take on multiple jobs). Norfolk Islanders would no doubt recognise all of these. (There is an interesting aside here. The island of Barra was itself a victim of the Highland Clearances in 1838 when most of the islanders were expelled to make way for sheep farming. However in 1937, Robert NcNeil, wealthy American and 45th chief of the clan McNeil, bought the island back for the clan, which remains the owner today.)
The glue of culture
What exactly is the glue that holds island communities together? Culture is the collection of ideas, customs, practices, habits, rules and other social behaviours of a particular society or community. It sets out the understandings – assumptions, values, procedures – associated with the community. It defines what is important for the life of the community, and how one should act in relationship with others. This culture is transmitted in the community is by social interaction – primarily within the family, but also in social institutions such as schools, churches, workplaces, hospital, sports and politics.
Key elements in the content of any culture are language, and symbols. Language is important first because it is the way we communicate, and second because no two languages ‘see’ the world in the same terms i.e. they each express a cultural view of the world. Another important part of the glue is provided by symbols. A symbol is basically a physical object associated with an abstract idea. In Buddhist culture for example the lotus (symbol) is associated with purity (abstract idea). For a Christian community a hymn is not just a song, but also a shared symbol of what the community members have in common, and expresses the values to which the community members subscribe. (It is important to note too that it is the members of the group who define the symbolic meaning that a symbol has: so an outsider may see the physical object, but be totally unaware of its deeper meaning.)
For Norfolk Island, in addition to language, important symbols include: the Pitcairn anthem and other hymns, Bounty Day, island weaving, cuisine, the Norfolk Island flag, yorlor possession, free burials, a sense of attachment to the British Crown, participation in the Pacific and Commonwealth games, ‘looking after each other’, trust in strangers, the Kingston museums, Captain Cook memorial, KAVHA buildings, the now-dissolved Legislative Assembly. These things – and others you can no doubt think of - draw together Norfolk Island as a community, and define the ideas we have of pride, self-belief, dignity, compassion, tradition. It is not for nothing that the aspirational values of the Norfolk Island Central School are: ‘Praid, Tradishan, Kalcha, Achiiwment’.
Community consequences of Australian Government changes
The passage of the Norfolk Island Legislation Amendment Act 2015 has introduced immense changes – perhaps the largest in over 150 years - to the way the Norfolk Island community is being asked to see itself. How will these changes affect the Norfolk Island community?
It is evident that in large measure the changes undermine the island’s social institutions and symbols, and thereby delegitimising its existing culture. The heaviest blows have been the loss of the Legislative Assembly and the deliberative forum that that provided for the resolution of island issues; the introduction of unrestrained immigration; the elevation of Australian public servants over local; and the introduction of a land-based rating system which will undermine traditional island identification of land with cultural continuity.
However there are many more subtle means by which the community’s dignity and self-belief are being undermined. Here are some powerful ones: the downgrading of the hospital to a service limited by population calculation; removal of the Island’s representational status from the Commonwealth Parliamentary Association and so on; disparaging comments by the Administrator in regard to things Norfolk; the failure of the Commonwealth to encourage and promote discussion by the Administration with the representatives of the community as to its plans; the writing out of mention of Pitcairn heritage from the preamble of the Norfolk Island Act 1979.
There are also unfortunately other more general economic forces working to undermine the vision of a vital local island community. In particular the free market ideas that are rife in Australian Government thinking, and the increase in commercialised enterprises in social services, erode local democracy and the notion of public goods. Individuals are being encouraged to see themselves more as consumers of services rather than as participants in society. As a replacement for island culture, the Australian Government seems limited to proposing ‘Be Australian’. In all the mountain of literature generated by the Australian Government about Norfolk Island in recent years, starting with the JSCNCET report, I know of no attempt to clarify what they think a community on a small island actually is, how it functions, or how government actions might impinge upon it.
In closing, I should note that there is nothing in this letter that says that cultural change is always bad. The letter’s intention is to invite citizens to consider carefully what they may gain in change and what they may lose. If important things are being lost, then how might they be retained, refurbished and enhanced? At this level the Australian Government seems not to give a damn, so such matters would be more usefully discussed at a later date.
- Chris Nobbs
[Earlier letters in this series accessible at: http://www.norfolkonlinenews.com/chris-nobbs.html]
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16. A RESPONSE TO MINISTER FLETCHER’S RADIO INTERVIEW
[Note: Transcriptions of the two radio interviews referred to follow this letter.]
On March 10 there was a seminar held in Canberra on the subject “No Man is an Island: The Future of Governance on Norfolk Island” hosted by the University of Canberra’s School of Governance and Policy Analysis. As part of my visit to Canberra I was interviewed by Alex Sloan of ABC 666 Radio Canberra about the upcoming seminar. In response to some of the issues raised in that interview, Alex invited Minister Paul Fletcher to respond on her programme. The main emphasis in Alex’ interview with the Minister was on democracy on Norfolk Island, the substance of the transition process, and what other possibilities there might be for Norfolk Island’s future. Alex’ interview with Minister Fletcher was printed in The Norfolk Islander last week. (Transcripts of both these interviews are available – see below (1).)
I would like to respond to some of the statements made by Minister Fletcher during his interview. The first observation to make is that at the public meeting held with the Minister on Norfolk Island on 28 January 2016, he presented three general arguments about why the Australian Government was proceeding in the manner in which it is. These arguments were: that the majority of Norfolk Islanders wanted it; that there would be substantial economic benefits for the island; and that as Australians, Norfolk Islanders should receive the same benefits as other Australians.
In examining what the Minister said in interview with Alex Sloan, we can note that the first of these arguments was not mentioned. It appears that the Minister has finally recognised that there is no evidence in the public domain to establish this proposition and that it is, in essence, false.
The second argument, that Norfolk Island will be a substantial economic beneficiary of the changes, was only mentioned in passing. Perhaps the Minister has almost recognised that the economic modelling on which this proposition is based cannot legitimately sustain his view – as was pointed out by independent analysis of the models made by Professor Michael Common in his report of November 2015. (Furthermore it needs to be noted that this modelling referred only to economic costs and benefits, with social costs and benefits being ignored.)
The core argument of the Minister’s interview with Alex Sloan was that ‘services available to people on Norfolk Island are not the same as are available in the rest of Australia’, and ‘It’s a question of giving people living on Norfolk Island the same rights as are available elsewhere in Australia’. Well, that is a point of view. However this point of view needs to be held up in comparison with other points of view. In particular the view of the Australian Minister for Home Affairs, Hon Robert ‘Bob’ Ellicott QC in 1978, when he announced the following with regard to Norfolk Island, was that:
“The Government is prepared over a period, to move towards a substantial measure of self-government for the Island, and is also of the view that, although Norfolk Island is part of Australia and will remain so, this does not require Norfolk Island to be regulated by the same laws as regulate other parts of Australia;…….. The Government believes that social service benefits appropriate to the conditions of the Island should be provided as of right, but does not believe that the services provided should necessarily be the same or at the same level as those available on the mainland…;” (2)
The key fact here is that these are both statements made about Norfolk Island by the responsible Ministers in the Liberal Australian Governments of the day. They represent different points of view - or as one might say, political stances. They are different value judgements about how Norfolk Island society ought best be organised. Neither statement represents an argument. The alternatives have to be argued for and against, and the present Australian Government has so far provided no coherent or substantial arguments in favour of its case. Constant repetition of the catechism about Norfolk Islanders having the same benefits and costs as Australians, gets us no further forward. (In prefiguring such an argument, I personally find support in the view expressed by Winston Churchill who, in a speech to the House of Commons in 1940, expressed the view that people should receive the nurture ‘not of totalitarian uniformity but of tolerance and variety’.)
And as for processes involved, the Minister’s assertion of there has been adequate consultation with the citizens of Norfolk Island cannot be accepted for a number of reasons, the most evident being the processes of establishment and conduct of the Norfolk Island Advisory Council. (There are others, but to retail them here would take us too far away from our purpose.) Nor can the Minister’s claim to bi-partisanship between Liberal and Labor MPs in the passage through the Parliament of the Norfolk Island Legislation Amendment Bill be taken as prima facie evidence of virtue. While both parties may currently cleave to the catechism mentioned above, support for the legislation probably had much to do with the relative importance given to this issue compared to other ‘continental’ issues with which the Australian legislature needs contend; to partial briefings provided by Commonwealth public servants and the well-documented misleading statements made by the then Minister Jamie Briggs in the Parliament and elsewhere; and to the overwhelming dominance of the Canberra media by the Commonwealth Government in comparison to the ability of a small island to gain any media attention at all for its case. (The deception involved in the Joint Standing Committee on the National Capital and External Territories in exceeding its terms of reference to recommend the abolition of the Norfolk Island Legislative Assembly, to which the Assembly itself had no rights of submission, requires a separate consideration.)
So the question of what is best way forward for Norfolk Island and Norfolk Islanders remains a matter of legitimate debate. Whether the actions of Australian Government amount to ‘colonisation’ as Alex Sloan suggested to the Minister in her interview, or not, as the Minister claimed, may be determined soon enough.
- Chris Nobbs
(1) Transcripts of both interviews are available under the heading of this letter, at http://www.norfolkonlinenews.com/chris-nobbs.html. Transcript of the Fletcher interview also available at http://www.investinaustralia.com/news/transcript-abc-alex-sloan-norfolk-island (dated 22 March 2016).
(2) Norfolk Island – Annual Report for 1977-1978, p.1.
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TRANSCRIPT OF INTERVIEW: ALEX SLOAN ABC 666 CANBERRA, ‘AFTERNOONS’ PROGRAMME, WITH DR CHRIS NOBBS, 9 MARCH 2016
ALEX SLOAN: On 666 Afternoons we have been following the story of Norfolk Island and governance, and the fact that self-government has been taken away from Norfolk Islanders, even though three quarters of the population have expressed a clear wish against this. At the University of Canberra the Institute of Governance and Policy Analysis are tomorrow running a workshop to examine the issue and explore alternative models of governance. And here in Canberra from Norfolk Island is one of the people speaking at this workshop and that is Chris Nobbs who is, actually a Pitcairn descendant. Chris, nice to see you in Canberra – it is a place you know well.
CHRIS NOBBS: Thanks Alex. Yes I do.
ALEX SLOAN: Now, I introduced you as a Pitcairn descendant, What does that mean to you, and why is that important in this story?
CHRIS NOBBS: I think we have to realise that the Pitcairn descendants on Norfolk didn’t get there from Australia, they came from the east, and they have had ever since their arrival in 1856 a very specific set of ideas, of goals, of manners of behaviour, of culture, particularly related to land, which they have felt is a very much an integrating part of their society and which many of them feel is being torn apart.
ALEX SLOAN: So that connexion and that culture are very much part of this story, at the moment?
CHRIS NOBBS: It is, but not for everybody. There is a larger story, and that is about the Australian Government in making this transition which for many people on the island, and including those who are not Pitcairners, actually think that the Australian Government is out of control. It is really running amok with what it is doing, and if it is not very careful there will be very damaging consequences not only for the economy, but also for what has been a traditional society.
ALEX SLOAN: So that decision was made last year by the Australian Government…
CHRIS NOBBS: It was.
ALEX SLOAN: And so Norfolk Islanders come under Australian Government law, for taxation, don’t you?
CHRIS NOBBS: The deal was that Norfolk Islanders would receive Australian welfare benefits, in return for essentially Australian taxation, and that they would be transformed from being an external territory with a certain amount of independence – not a great deal, but some – into being a regional council under Commonwealth control but with laws that look like those in New South Wales. And as you said, a majority – it is very clear that a majority of Norfolk Islanders do not want that.
ALEX SLOAN: But that’s not what you got. So why is it important to have this workshop tomorrow and why have you come to the workshop? What will be discussed?
CHRIS NOBBS: There are a number of things. I think for me one of the key reasons is that I think Australians actually need to know what is being done on Norfolk Island in their name. In my view it is grossly unfair and unjust, and it is actually a disgrace, some of the conduct of some of the Commonwealth Government and its organs in relation to what Australians generally would consider as democracy. But even so, that said, whatever happens on Norfolk Island, and there are other moves by a group called the Norfolk Island People for Democracy to take this issue to the United Nations, and we might discuss that a little later… It is really important that Norfolk Island gets a decent deal, that works. So that tomorrow’s workshop will consider – whatever the outcome of this transition process may be - what might be the way forward, the manner which can create a good environment and society and economy for Norfolk.
ALEX SLOAN: Well what is the way forward? This all began I suppose as an argument about services… what is the way forward in terms of governance?
CHRIS NOBBS: Well the Australian Government has a particular view of that, which as we have said, Norfolk Islanders don’t particularly like, and that may well be imposed on them. There are some things that the Australian Government could do. In my view it would be important that they actually slow down the process and have another look at what is actually happening on the ground. One of the problems it seems to me is that they have an almost ideological model of what the economy should look like, they have a lot of bureaucrats and consultants and a lot of money in trying to put those things together. What is lacking is anyone who is actually going and talking to the people, and they are the ones who are in the front line – they’re the ones who actually know what is going on – what’s going to happen to prices, what’s going to happen to employment. So there are things that the Australian Government could do. Another thing they could do if they took the bull by the horns they could… well I should say that a few years ago the Australian Government and the Norfolk Island Government said that there would be a dummy run of income, of making income returns. That for a year or so everyone would have a tax file number and they would do a dummy run to see what this [system] was going to be like. And the Commonwealth Government reneged on that.
ALEX SLOAN: But you think it should have happened?
CHRIS NOBBS: I think it would have been a remarkably good idea. And the reason is that people have to understand that these are people who have never filled in a tax form in their lives. They are being invited into a system which they don’t understand and by and large which is quite foreign to them and even if it is going to happen it needs in my view to have a gentle process and I’ve written to the Minister suggesting that…
ALEX SLOAN: And what response did you get back?
CHRIS NOBBS: Not only have I not had a response, I didn’t have an acknowledgement that he had received it. And this is one of the problems that Norfolk Island is dealing with at the moment, I had an email from the head of the Norfolk Island Accommodation and Tourism Association, which is responsible for about 70 per cent of the economy – now he has written to the Minister Fletcher, he has written to the Administrator, and he has also written to the responsible department which is Infrastructure and Regional Development about certain queries he had. He has not had a response from any and he has not even had an acknowledgement of his letter.
ALEX SLOAN: You’ve had a changeover over there of Ministers though haven’t you, from Jamie Briggs to now Paul Fletcher.
CHRIS NOBBS: Correct.
ALEX SLOAN: So should we just give that time?
CHRIS NOBBS: Well no, my letter was to Paul Fletcher. And he has been on the island recently.
ALEX SLOAN: And who did he meet with?
CHRIS NOBBS: That raises another [point]. He had a community meeting, a public meeting, in which he went through some of these things. And to be fair to him, it was the first time that a minister had fronted up at a public meeting to hear what Norfolk Islanders thought, and wished to say to him. An interesting element of that meeting was that the Chief Executive Officer refused permission for the Norfolk Island People for Democracy to run an ad on the radio station. He also refused the radio station permission to broadcast the Minister’s meeting. When the acting manager of the radio station enquired from him to get some clarification of that, she was removed from her position with one week’s stress leave, and placed somewhere else in the Norfolk Island Public Service. And there have also been more recently sacking of volunteers for being ‘political’ on the radio. Now if you were aware of how…
ALEX SLOAN: You’re saying that freedom of speech has been shut down.
CHRIS NOBBS: Freedom of speech is one of the casualties of this behaviour.
ALEX SLOAN: Well we’ll certainly put in a call to the Minister, because we have been talking about this for a while, and if you’re saying that it is getting to issues such as freedom of speech has been denied, and as you say, the Minister did visit Norfolk Island, so we’ll try and follow that through.
My guest this afternoon is Chris Nobbs who is in town for a seminar tomorrow at the University of Canberra, and the public can attend if you would like to go along… sorry it is in the Theo Notaras Centre not the University of Canberra. That is from 12:30 to 4:00, tomorrow afternoon. So if you have been following this issue in this whole issue of self-government and democracy, this is quite an interesting case. And just before I let you go, you mentioned Chris Nobbs you mentioned that approach to the United Nations. At what status is that at?
CHRIS NOBBS: I don’t know. I’m not part of that conversation. But the idea is that as an external territory the Norfolk Island People for Democracy wish Norfolk Island to be considered by the Decolonisation Committee so that they can have a fee and independent choice as to whether they join Australia completely or in free association, or something else. That’s the deal.
ALEX SLOAN: And what do you hope comes out of tomorrow’s session? You’ve come to town for it, so what do you hope will come out of it?
CHRIS NOBBS: A little more clarity around the issues, and a public awareness – I think that is important – a public awareness of what is going on on Norfolk Island.
ALEX SLOAN: Lovely to meet you. Thanks for coming to town, thanks for coming into the studio, and have a great session tomorrow.
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TRANSCRIPT OF INTERVIEW: ALEX SLOAN ABC 666 CANBERRA, ‘AFTERNOONS’ PROGRAMME, WITH PAUL FLETCHER MP, MINISTER FOR MAJOR PROJECTS, TERRITORIES AND LOCAL GOVERNMENT, 22 MARCH 2016
ALEX SLOAN: Mr Paul Fletcher, good to talk to you.
PAUL FLETCHER: Thanks Alex.
ALEX SLOAN: If I can start with democracy, the evolution of self-government means that this year Norfolk Islanders, under Australian compulsory voting laws, will vote in the Lower House for the seat of Canberra and for the ACT in the Senate. So does this make sense in any way?
PAUL FLETCHER: Well it does makes sense, because the people of Norfolk Island are citizens of Australia and so they will now have voting arrangements that align with those of people around Australia. So for example, in our other external territories, residents of those territories are on the electoral roll in one of the mainland electorates. And of course, what we are also seeing as a result of these changes is that there will be a council on Norfolk Island – the Norfolk Island Regional Council – that will operate under broadly the same rules as apply to councils in New South Wales. It will have broadly the same range of powers. So the same democratic rights that are available to Australians elsewhere will be available to the citizens of- to Australians who live on Norfolk Island.
ALEX SLOAN: How will that – because the claims from Norfolk Islanders about that model of governance is that the New South Wales Local Government Act hasn’t been utilised for regional councils and they’re unsure of how this is going to work for them.
PAUL FLETCHER: Well look, they’re- obviously it’s a change from the current arrangements. Let’s just remind ourselves what happened there, and I had the chance to see this for myself when I visited Norfolk Island in January, met with a lot of people on the island. We had a community meeting with over 300 people there; it went for an hour and three quarters. We discussed a whole range of these issues. Now the issue is that Norfolk Island has had self-government since 1979, but it’s become clear over really quite a number of years that the level of services available to people on Norfolk Island are not the same as are available in the rest of Australia. So in a similarly isolated community on the mainland, people, for example, have access to Centrelink, they have access to the Age Pension, to Disability Support, to Newstart Allowance. They have access to Medicare. Now, on Norfolk, today for example, the healthcare system is Norfolk-specific. There’s an insurance scheme that’s specific to Norfolk Island. Most people now will no longer have to pay premiums under that scheme; they’ll have the benefit of Medicare. So that is just one of a number of ways in which people are going to be better off as a result of these changes, and that in turn is why there was bipartisan support for these changes when legislation went through the Australian Parliament last year.
ALEX SLOAN: Three quarters of Norfolk Islanders said they didn’t want self-government to be abolished in a vote there. Have we just been lazy? At a recent seminar at the University of Canberra, attended by a Norfolk Islander, including Chris Nobbs who spoke on my program, they pointed to New Zealand models of governments for external territories, particularly Niue and the Cook Islands, and these models allow the right of self-determination by the people living there. Why not explore these models, rather than just cancel out their rights to vote? Or their rights to self-govern, to self-determination.
PAUL FLETCHER: It’s a question of giving people living on Norfolk Island the same rights as are available elsewhere in Australia and using the same model as is used, for example, on Christmas Island and on the Cocos (Keeling) Islands and other external territories.
ALEX SLOAN: There are complaints about that as well, but let’s just concentrate on Norfolk Island. Why not explore these other models of governance?
PAUL FLETCHER: Well because the model that we are introducing is consistent with the models used on other Australian external territories, and is the model best placed to deliver services to the 1500 people who live on Norfolk Island.
ALEX SLOAN: But isn’t it just colonisation?
PAUL FLETCHER: No. No, it’s not colonisation at all, because Norfolk Island is a territory of Australia, has been for many, many years. What it’s about is delivering to people on Norfolk Island the services that people expect from government: Medicare, Age Pension, Newstart. And the modeling makes it clear that people are going to be better off. The economic modeling that the Government’s done shows that there’s going to be a 14 per cent increase in what’s called gross territory product, in other words economic activity across the island. Yes, people will now be paying Australian tax, but the social security payments going onto the island of about $4.9 billion will more than offset the tax which is paid. So ultimately it’s about whether the people living on Norfolk Island get the same services that people elsewhere in Australia would expect.
ALEX SLOAN: But Minister Fletcher, why are you not sounding like a colonial master saying this is going to be good for you, trust me, don’t worry that you’re not involved in the consultation or the negotiation? This is coming from someone in Canberra.
PAUL FLETCHER: I think the premise that the people of Norfolk Island have not been involved in consultation is really… that is not what’s happened.
ALEX SLOAN: Because that’s the complaint. The complaint is this was imposed by us from politicians in Canberra. This is not what we want; we’re now very unhappy about it. Including freedom of speech: the people for Norfolk Island democracy have been banned from the radio station. Any notice that is run on that radio station has to be first vetted by a Commonwealth public servant. What’s going on there? That’s a real freedom of speech issue.
PAUL FLETCHER: The radio station is obviously an important forum for people to be able to speak about issues of concern on Norfolk Island. I had the chance to be interviewed myself when I was there in January. Certainly, there was plenty of probing scrutiny, as you would expect, as any politician would expect appearing on radio anywhere across the country.
ALEX SLOAN: But the people for Norfolk Island democracy are banned from that radio station.
PAUL FLETCHER: Look, the… important issue here is that the Government of Australia has responsibility for the welfare of the people of Norfolk Island, as it does for the welfare of people all around the rest of Australia, and so this reform process is being undertaken because the services that have been available to people on Norfolk Island have demonstrably fallen behind services in other parts of Australia.
PAUL FLETCHER: And yes, there are some people on Norfolk Island who prefer the way things have been, those people put their views to me very forcefully at the community meeting I attended in January. At the same time, it’s the assessment of the democratically elected government of Australia that this is the best thing to do for Norfolk Island …
ALEX SLOAN: But you’re invoking democracy there but then you’re denying democracy of the Norfolk Islanders who three quarters of them voted last year in a plebiscite to say we don’t want to have our right to self-government taken away but that was ignored.
PAUL FLETCHER: The changes that the Australian Government is introducing do reflect extensive consultation on Norfolk Island over many years, including, for example, extensive investigation by the Committee of the Australian Parliament which oversees Norfolk Island and many other government processes. So, ultimately the responsibility of the Australia Government is to deliver services and meet the needs of people of Australia wherever they happen to live, including Norfolk Island.
ALEX SLOAN: But was that consultation with Commonwealth bureaucrats?
PAUL FLETCHER: Not at all, not at all. There’s been very extensive consultation with the people of Norfolk Island, that’s why I went there in January this year, that’s why my predecessor minister Jamie Briggs went there last year, that’s why, for example, Senator for the ACT, Zed Seselja was there earlier this year, that’s why the Labor Member for Canberra who will become the Member representing the people of Norfolk Island and already informally represents a number of them has been many times. So there’s been extensive engagement with the people of Norfolk Island. There is an interim council now led by …
ALEX SLOAN: And the governance of that is still very unclear.
PAUL FLETCHER: And – well there are five people appointed to inform the Australian Government and the administration of Norfolk Island and within a few short weeks there will be an election of the Norfolk Island Regional Council so that we can have locally elected people on the council as we have throughout Australia governed under New South Wales law.
ALEX SLOAN: Minister Paul Fletcher is with me this afternoon. I believe one of the big issues today on Norfolk Island is the future of the hospital with fears that it could be downgraded to a health centre. Is there any argument or thoughts along the line of privatising healthcare on Norfolk Island and also privatising the pharmacy?
PAUL FLETCHER: Look, there’s a lot of work going on, on what is the best model to provide healthcare on Norfolk Island and the issues that arise there are the same as arise in isolated communities all around Australia, including our other external territories but also isolated. For example, Indigenous communities, communities all throughout Australia. Now, it’s important to understand that the operating theatre in the hospital has not been used for several years, in other words it’s not a hospital today that is able to provide operations. The model that is proposed is what’s called a multipurpose service. So, there’ll be general practitioners available, there’ll be aged care services, allied health professionals and of course the capacity to medivac people who need acute care to mainland hospitals. So, this is a well-established care model which is used in isolated communities all around Australia. We’re working through right now who the provider is going to be and we’ll have more to say about this.
ALEX SLOAN: And what right will Norfolk Islanders have in saying how they want their health services delivered, what opportunity will there be for them?
PAUL FLETCHER: Obviously the views of Norfolk Islanders will be important and Norfolk Islanders will be consulted. But at the same time the Commonwealth Government has a responsibility to deliver services and of course …
ALEX SLOAN: So the decision will be made in Canberra.
PAUL FLETCHER: Well, the decision will be made by the democratically elected government as is the case for a whole range of services for people all around Australia. So, the people of Norfolk Island have the benefit of services provided by the Commonwealth Government, they’ll have their local council once its elected and then in terms of state services, because there is no state level of government, then it’s incumbent on the Commonwealth to make alternative arrangements, so for example, the New South Wales Education Department today provides education services at the school under a contract between the Commonwealth Government and the New South Wales Government and so in relation to education, in relation to health and other services, the Commonwealth is responsible for delivering those services, we’ll make arrangements as to how to do that obviously in consultation with community members.
ALEX SLOAN: And just finally, Paul Fletcher, it’s been put to me, at the heart of this is how we, as a great democracy, and we’re going through a great festival, perhaps a 2 July double dissolution election, certainly a fixed term election in the ACT, how we as a great democracy feel it’s okay to return Norfolk Island to a colonial status.
PAUL FLETCHER: Look, I vigorously reject that characterisation. This is about ensuring that Australians who live on Norfolk Island get the same services as people anywhere else in Australia. The evidence is clear that the self-government arrangements have led to people on Norfolk Island not having the same standard of services as Australians everywhere expect and as the years have gone on, that’s become a situation which is increasingly…
ALEX SLOAN: But could another model have been explored, has…
PAUL FLETCHER: … so this is a model which has been developed to give people of Norfolk Island the services they are entitled to and rightly expect as Australians and as Australians anywhere else would rightly expect.
ALEX SLOAN: So you’re comfortable with…
PAUL FLETCHER: I am comfortable. I think this is an important reform, I don’t think it’s an accident that there is bipartisan support for it because as Commonwealth politicians, whichever side of the political spectrum we’re on, we can look at the level of service presently delivered in Norfolk Island and readily conclude that people on Norfolk Island are not getting today the same level of service as Australians elsewhere and that needs to be fixed and we’re fixing it.
ALEX SLOAN: Minister Paul Fletcher, I do appreciate your time today, thank you so much.
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15. COMMONWEALTH DAY, THE COMMONWEALTH CHARTER, AND WHY THE NORFOLK ISLAND ADMINISTRATOR SHOULD RESIGN OR BE SACKED
The Norfolk Islander for 12th March 2016 carried an article by the Administrator, Hon Gary Hardgrave, supporting “Commonwealth Day 2016”, set down for March 16 and with the theme “An Inclusive Commonwealth”. (We should note that here “Commonwealth” refers to the Commonwealth of Nations, not the Commonwealth of Australia.) In his article the Administrator points to the fact that despite the diversity of the nations that comprise the Commonwealth, it is what we have in common that unites us. He states that An Inclusive Commonwealth “refers to values of tolerance, respect and understanding, as well as equity and fairness, which are set out in the Commonwealth Charter”.
The Commonwealth Charter is in fact a document signed by Her Majesty Queen Elizabeth II as Head of the Commonwealth in March 2013, which reaffirms the core values and principles of the Commonwealth of Nations. (http://thecommonwealth.org/our-charter) In view of the Administrator’s endorsement of the Charter, these values and principles are worth a closer look.
The first inscribed core value of the Commonwealth Charter is Democracy, and states: “We recognise the inalienable right of individuals to participate in democratic processes, in particular through free and fair elections in shaping the society in which they live...” So how does the abolition of the Norfolk Island Legislative Assembly fit with that? And how does the promotion of the notion that the “vast majority” of Norfolk Islanders want union with Australia fit with that when the results of the Norfolk Island referendum of 8 May 2015 - carried out under the strict and formal supervision provided in the Norfolk Island Referendum Act - showed the opposite? (See further my letter to The Norfolk Islander and Norfolk Online of 13/02/16.)
The second core value of the Commonwealth Charter is Human Rights, and states: “… We are committed to equality and respect for the protection of civil, political, economic, social and cultural rights…” So how does the dismantling of the Norfolk Island Legislative Assembly chamber in the Old Military Barracks in what is a World Heritage Site, fit with that? (my letter of 09/01/16) And how does the removal of mention of Norfolk Island’s Pitcairn heritage from the preamble of the Norfolk Island Act 1979 in the Norfolk Island Legislation Amendment Act 2015 which replaced the earlier Act, fit with that?
The fourth core value of the Commonwealth Charter is Tolerance, Respect and Understanding, stating: “We emphasise the need to promote tolerance, respect, understanding, moderation…”. So how does the Administrator’s response to the public assembly and demonstration on 17 June 2015 called to mourn the dissolution of the Norfolk Island Legislative Assembly, which he referred to as a ‘mob’ and a ‘school breakout day kind of activity’ and one which could give rise to stealing and intimidation of Government House, fit with that? (letter of 27/06/15) Or the Administrator’s statement on Radio New Zealand on 29 May 2015 that opposition to the Australian reforms was merely ‘being led by a few politicians who fear for their jobs’? Or his demand that the Norfolk Island Returned Services League at its Anzac Day service give precedence to the Australian anthem rather than the British anthem? (See: “Norfolk Island RSL Community Announcement”, The Norfolk Islander, 14/03/15.) In regard to which it should be noted that during both World Wars and up until January 1949 Norfolk Islanders were British citizens, and that the Norfolk Island RSL has honoured the British anthem for the last 100 years – since the Island’s first Anzac Day service in 1916.
The fifth core value is Freedom of Expression and states: “We are committed to peaceful, open dialogue and the free flow of information, including through a free and responsible media, and to enhancing democratic traditions and strengthening democratic processes.” So how does the gagging of free speech on Radio Norfolk and the sacking of its staff fit with that? (letter of 27/02/16)
The eighth core value refers is Good Governance: “We reiterate our commitment to promote good governance through the rule of law, to ensure transparency and accountability…”. So how does failure of the Administrator’s Office to respond to or even acknowledge correspondence on issues related to Norfolk Island’s future, fit with that? Although my letter of 06/02/16 refers to my own experience in this regard, similar experiences appear to be widespread, including failure to respond to enquiries by the Executive of the Norfolk Island Accommodation and Tourism Association, the official representatives of the largest economic sector on the island. And furthermore how does the bias and lack of accountability of the Norfolk Island Advisory Council process, fit with that? (letter of 16/01/16)
The tenth core value is Protecting the Environment: “We recognise the importance of the protection and conservation of our natural ecosystems and affirm sustainable management of the natural environment is the key to sustainable human development.” So how is it that the Norfolk Island Administration has endorsed an economic development strategy for the island in which the words “precaution”, “stability”, “sustainability”, and phrases “sustainable development” and “sustainable management” do not occur at all, “uncertainty” only once (in relation to “misinformation”), “limit” only once (in relation to “bed numbers”), and “sustainable” where it does occur, appears mainly related to private sector investment? (letter of 12/12/15)
(Others of the core values and principles of the Commonwealth Charter refer to International Peace and Security, the Separation of Powers, Rule of Law, Gender Equality, and so on.)
The Administrator and his Administration have by their actions (and inactions) comprehensively failed to maintain the core values and principles of the Commonwealth of Nations, and justifies the call, already make by others, that the Administrator resign forthwith or be sacked.
The letters referred to in this text are available at: http://www.norfolkonlinenews.com/chris-nobbs.html, or alternatively from: email@example.com.
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14. CANBERRA SEMINAR ON FUTURE GOVERNANCE ON NORFOLK ISLAND – SUCCESSFUL BUT STRUCK BY ABSENTEEISM
On Thursday 10 March I attended a seminar in Canberra entitled “No Man is an Island: The Future of Governance on Norfolk Island”, hosted by the Institute for Governance and Policy Analysis of the University of Canberra. The purpose of the seminar was to examine the effects of the removal of self-government from Norfolk Island, and to explore positive opportunities for the Island’s future. It would also lay some groundwork for possible future research on various aspects of the governance and economy of small islands. (As Christmas and Cocos Islands are undergoing a similar transition to that of Norfolk Island, it was also anticipated that examination of the Norfolk Island case might provide some input to an understanding of that situation and appropriate policy responses.)
The seminar was attended largely by university personnel, by three Norfolk Islanders, and individuals from other professions. As an academic exploration of the matter, no presumption was made by the seminar organisers as to the virtue of one arrangement over any other.
Apart from the analysis and insights provided during the course of the seminar, what was most remarkable was the complete absence of attendance from Commonwealth politicians associated with Norfolk Island, and from the Department of Infrastructure and Regional Development, despite invitations to both groups to participate. This no-show was most regrettable. As invitees were invited to send proxies, it can only be assumed that the politicians and public servants either lacked the courage to front up to explain and justify their existing policies in open session, or that they were too uninterested to explore options that might be best suited for Norfolk Island’s future well-being (or that of Christmas and Cocos Islands).
For the record, the heroes and heroines of democracy invited to participate but who failed to appear (or send a proxy) included the following:
All members of the Joint Standing Committee on the National Capital and External Territories which delivered the report on Norfolk Island Same Country: Different World (October 2014), namely:
Chair, Mr Luke Simpkins MP (Liberal), Cowan WA
Deputy Chair, Senator Carol Brown (Labor), TAS
Senator Chris Back (Liberal), WA
Hon Bronwyn Bishop MP (Liberal), Mackellar NSW
*Ms Gai Brodtmann MP (Labor), Canberra ACT
*Senator Katy Gallagher (Labor), ACT
Senator Sarah Hanson-Young (Greens), SA
Senator Gavin Marshall (Labor), VIC
Hon. Bruce Scott MP (National), Maranoa QLD
*Senator Zed Seselja (Liberal), ACT
Hon Warren Snowdon MP (Labor), Lingiari NT
Mr Ross Vasta MP (Liberal), Bonner QLD
* Invited in their capacity as the local members for Norfolk Island.
Department of Infrastructure and Regional Development invitees:
Andrew Wilson, Deputy Secretary
Robyn Fleming, Executive Director, Local Government and Territories
Glenda Kidman, Norfolk Island Desk, Local Government and Territories
No representative of DIRD participated in the seminar.
In the final analysis, the programme of speakers at the seminar was as follows: Adjunct Professor Jon Stanhope AO – Chair; Dr Chris Nobbs – The Transition: A View from the Community; Mr Geoff Bennett - Case Study: The Role of Norfolk Island People for Democracy and Patterns of Community Governance; Mr Alan Kerr - Next Steps for Norfolk ; Professor Chris Aulich –Considering the NSW Regional Council Concept; Emeritus Professor Roger Wettenhall AM - Governing Small Territories with Aspirations for Self-Government; Ms Vivien Twyford - Getting Better Outcomes through Collaboration; and Professor John Halligan – Closing Remarks.
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AUSTRALIAN GOVERNMENT FURTHER GAGS NORFOLK ISLAND FREE SPEECH
[Norfolk Island, South Pacific, Friday 4 March 2016, 1000 AEST]
The Australian Government and its subsidiary Norfolk Island Administration have taken further steps to restrict free speech on Norfolk Island.
As a result of the passage of the Norfolk Island Legislation Amendment Act 2015 in the Australian Parliament, the Government has embarked on a process of transitioning Norfolk Island from the status of an external territory with a limited form of self-government, to that of a regional council modelled on those in the State of New South Wales. This is against the wishes of the majority of the people of Norfolk Island.
As reported on 29 January, prior to the visit to the island of the responsible Minister Hon Paul Fletcher, the Executive Director of Norfolk Island Peter Gesling directed that a radio announcement on behalf of the Norfolk Island People for Democracy not be broadcast. On 28 January he went further and directed that the public meeting to be held with the Minister not be broadcast.
Further moves by the Administration against Radio Norfolk have now transpired. On 27 January Gesling also decreed that henceforth all community announcements would require approval from the Administration, and that all interviews were to be pre-recorded and approved by him prior to broadcast. A request for clarification of this ruling from Gesling by the Acting Manager of Radio Norfolk was met with her removal from her position with one week’s ‘stress leave’, and subsequent redeployment elsewhere in the Norfolk Island Public Service.
In unrelated incidents one volunteer presenter was sacked for mentioning on radio that the Australian Government would not be providing funds for the radio station after 1 July 2016; and two volunteer presenters of a popular and mildly satirical weekly show were sacked with immediate effect for not being “apolitical”.
In a letter published 27 February in The Norfolk Islander and on Norfolk Online, Dr Chris Nobbs argues that the reasons given by the Administration for these actions are specious, and that they are merely intended to gag free speech and criticism of the Australian Government. Concern is also expressed that Norfolk Island public servants may be being stifled in the exercise of their democratic rights to free expression on the political processes involved in the island’s transition.
Contact: Chris Nobbs, an independent commentator, Norfolk Island
E: firstname.lastname@example.org T: +672 3 22727
[Nobbs’ letter to The Norfolk Islander and archive on this issue available at: http://www.norfolkonlinenews.com/chris-nobbs.html]
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STOP PRESS – ANNOUNCEMENT
On Thursday 10 March the University of Canberra’s Institute for Governance and Policy Analysis will be hosting a “Seminar on Norfolk Island Governance” at the Theo Notaras Multicultural Centre, Canberra. Invitations have been widely distributed to politicians, Commonwealth departmental representatives, academic figures, and the media. Norfolk Islanders’ interests will be represented at the Seminar. It will provide an opportunity for parties to discuss and to justify their approaches to governance on Norfolk Island, and to explore fruitful avenues for the future.
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13. THE GAGGING OF RADIO NORFOLK – ANOTHER DISGRACE FOR THE AUSTRALIAN GOVERNMENT
The morning announcements from Radio Norfolk come over each day with a smooth and breezy professionalism, suggesting all is well at the station. However beneath the surface a battle is being played out which has brought the community’s trust in this central institution into serious jeopardy.
What we know
On Tuesday 26 January, Radio Norfolk in its community notices section carried an announcement from the Norfolk Island People for Democracy (NIPD), relating to a flag-raising ceremony to be held at their newly refurbished headquarters in Taylor’s Road on Thursday 28th, just prior to a public meeting with the Minister responsible for Norfolk Island, Hon Paul Fletcher then visiting Norfolk Island, the meeting to be held at Rawson Hall.
On Wednesday 27 the Transition Manager in the Norfolk Island Administration, Susan Law, wrote to the Acting Manager of Radio Norfolk, instructing her to discontinue the broadcast of this notice. Further, the Executive Director of the Norfolk Island Administration Peter Gesling informed the Acting Manager that all community notices would henceforth require approval from the Administration, and that all interviews were to be pre-recorded and approved by him prior to broadcast. (We know these things because it was the fate of the Acting Manager to have to explain to citizens exactly what they could and could not do, and what they could and could not expect, from Radio Norfolk in the wake of the Minister’s arrival on the island.)
A request for clarification of this ruling from Executive Director Gesling by the Acting Manager was met with her removal from her position at Radio Norfolk with one week’s ‘stress leave’, and subsequent redeployment elsewhere in the Norfolk Island Public Service. A further edict from the Executive Director on 28 January directed that Radio Norfolk not broadcast the proceedings of the Minister’s public meeting at Rawson Hall.
In an unrelated meeting with Radio Norfolk staff, the Transition Manager noted that there would be no Commonwealth Government funding for the radio station after 1 July 2016. After one of the Radio’s registered volunteers, Graham White, mentioned this fact on his regular weekend show he was sacked from his volunteer position, without explanation, by Administration CEO Jon Gibbons.
And more recently still Radio Norfolk hosts of the mildly satirical Thursday evening show “Very Nearly Relevant”, Bob Turner and Simon Brown, registered volunteers both, received letters from CEO Jon Gibbons dated 12 February 2016, sacking them with immediate effect.
A look at the arguments
The reasons given by Susan Law to Chris Magri, President of NIPD, as to why the Executive Director had issued his instruction to cancel the NIPD announcement were that the announcement was ‘sectorial’ and ‘political’.
With regard to ‘political’ Ms Law explained to Mr Magri that: “Minister Fletcher is on Norfolk Island in his capacity as a member of the Australian Government, not as a politician. Accordingly, his announcement was not a political statement but a government announcement.” This is nonsense. All government members try to promote their cause at the cost of their opposition, and all their messages carry political as well as informational content, as any television discussion involving politicians will demonstrate. Furthermore, if Ms Law had listened to Minister Fletcher at the Rawson Hall public meeting, she would have heard him say in introduction to answering one question: “As a politician I …” [meeting transcript, about 73 minutes in].
As for ‘sectorial’ (actually the word is ‘sectoral’) it merely means - as the dictionary tells us - that reference is being made to a distinct part or branch of a nation’s economy or society. As a reason for not broadcasting an announcement, this is bizarre. Common sense indicates that almost every community announcement that one can think of is sectoral in nature –church notices for religious groups, child care for parents, sport for sports fans, lighterage calls for lighteragemen. About the only announcement that would not class as sectoral would be a cyclone emergency warning.
In further explanation, Ms Law explains that the relevant sections of the Acts and Policies to which she is appealing are two. First, the Norfolk Island Broadcasting Act 2001 section 6(4). This states: “The Crown in right of Norfolk Island may, subject to this Act, make provision for the content, style, subject matter, or any other thing concerning and connected with the operation of the Norfolk Island Government Broadcasting Service.” This merely states that the Administration has the power to do what it did. This is not the issue. The issue is whether in doing what it did it has acted in fairness and justice and in the support of democratic principles. Ms Law should perhaps have read further in the Act to section 14(f) which provides the opportunity for the responsible Minister to make: “rules relating to the reasonable preservation of free speech and opinion by persons in the community and operators and providers of broadcasting services.”
The second appeal by Ms Law is to the Radio Norfolk – Policy on Programming (2014), section 4.1. This states: “Radio Norfolk’s programming policy shall at all times remain independent. This means that the programming policy of Radio Norfolk shall be conceived and implemented without reference to the needs of any specific interest group (other than offering access) including political, religious, or any business interest.” One will note that this also indicates independence from government influence. However there is a more important point. The policy says that the radio station should be independent: it does not say that alternative views should not be expressed. (And it is certainly the case that a community’s radio station should remain independent of the views expressed on its airwaves.)
The letters received by Mr Turner and Mr Brown from CEO Jon Gibbons in sacking them are essentially based on the same arguments as those advanced by Ms Law to Mr Magri, with the addition of a specious reference to “our responsibility to deliver services which are apolitical”. As we have just seen, no such responsibility exists.
The present situation orchestrated by the executives of the Norfolk Island Administration is a disgrace to themselves and the Australian Government. Because the reasons given for these actions are so devoid of content, we must look elsewhere to explain them. All things considered the situation looks much more akin to the Administration using the radio station as a weapon to control criticism and free speech.
A related matter: staff harassment
There is more than a whiff of workplace harassment in these actions by the Australian Government and its compliant Norfolk Island Administration. Indeed on a number of occasions Norfolk Island public servants have expressed to me their sense of being intimidated out of participating in community forums and other means of political expression, by managers quoting to them of clauses from the Norfolk Island Public Services Act.
It is of course the responsibility of any public servant to carry out his or her duties with due diligence and with respect for his or her employer. This does not preclude that person from holding political opinions, joining a political party, or being active in trying to create a better society (as he or she might see it). There will always be a balance to be struck here, but balance there must be. To suggest otherwise is to run blind towards the trappings of a police state.
When an employer has so much power as the Australian Government has, and alternative employment for public servants is scarce, it may be difficult for an employee to assert his or her legal and democratic rights. However, Norfolk Island public servants should be aware that under the Norfolk Island Public Service Act 2014 there is a Public Service Commissioner to whom complaints can be made. Annwyn Godwin who has recently accepted this role, is also Merit Protection Commissioner under the Australian Public Service Act 1999. Her role is set out at:
http://www.apsc.gov.au/merit/merit-protection-commissioner-role-and-functions/norfolk-island-public-service-commissioner; some of the skills and experience she brings to her role are given at: http://www.apsc.gov.au/trash/the-merit-protection-commissioner. She can be contacted at: email@example.com or firstname.lastname@example.org. The Australian Community and Public Sector Union may also be able to offer advice and assistance.
Yours sincerely, Chris Nobbs.
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MEDIA RELEASE (4) - NORFOLK ISLAND ECONOMY IN DANGER OF COLLAPSE
President of the Norfolk Island Accommodation and Tourism Association (ATA) Rael Donde expresses serious concern that the Norfolk Island economy is on the verge of collapse. This situation is caused by the sudden and substantial changes being introduced on the island by the Australian Government and the continuing uncertainty regarding their detail, described by Mr Donde as ‘reckless and irresponsible’. These views are expressed in a letter from the ATA to the Minister for Territories, Local Government and Major Projects, Hon Paul Fletcher, now published in The Norfolk Islander.
Tourism is Norfolk Island’s only major industry, accounting for 71 per cent of all businesses and 68 per cent of all private sector employment, according to Australian Bureau of Statistics figures.
The Australian Government has recently embarked on a process of transitioning Norfolk Island from the status of an external territory with a limited form of self-government, to that of a regional council modelled on those in the State of New South Wales: a process to be completed by 1 July 2016. This is against the wishes of the majority of Norfolk Islanders.
Mr Donde points out that the transition being implemented by the Australian Government will increase taxation, superannuation contributions from businesses, capital gains tax, and see substantial increases in regulatory compliance costs. These will lead to substantial price rises and further depress the already-depressed island economy.
Mr Donde says that the same unresolved issues he raises in his present letter were raised by the ATA with the previous Minister over six months ago and to which no reply was ever received. The ongoing uncertainty has serious implications for Norfolk Island and makes business planning impossible.
With less than five months to go to the proposed transition completion, Mr Donde points to several significant and still unresolved issues, including:
o very large impact of any introduction of mainland award pay rates, particularly for weekends and public holidays;
o uncertainty in the impact of federal income tax (the Commonwealth having reneged on an earlier written agreement for a phased introduction of income taxation);
o the removal of the Norfolk Island Tourism Manager and the lack of a replacement;
o lack of any announced short-term economic stimulus policy for Norfolk Island;
o the lack of serious engagement by the Australian Government with the local tourism industry concerning policy directions and the resolution of outstanding issues.
Mr Ian Kiernan, manager of the island’s major supermarket notes: “There is undeniably uncertainty throughout the business community on Norfolk Island. We are trying our best to identify and understand the myriad of changes coming into effect from 1 July 2016, but limited interaction with the various Australian Government Departments has so far been inadequate. Economic collapse is certainly a possibility.”
Contact: Chris Nobbs, an independent commentator, Norfolk Island
E: email@example.com T: +672 3 22727
Details: Rael Donde, President, Norfolk Island Accommodation and Tourism Association (ATA)
Letter at: http://welcometonorfolkisland.com/ata-letter-to-commonwealth-minister-responsible-for-norfolk-island/
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MEDIA RELEASE (3) - AUSTRALIAN GOVERNMENT DISMANTLES PART OF WORLD HERITAGE SITE
[Norfolk Island, South Pacific, Sunday 14 February 2016, 1400 AEST]
It has emerged that the Australian Government on Norfolk Island has dismantled part of the fabric of the World Heritage listed Kingston and Arthur’s Vale Historic Area (KAVHA) site on Norfolk Island. KAVHA is a key site among the eleven Australian Convict Sites across Australia which have been inscribed as a group on the World Heritage List. This action (and others taken) have the potential to throw into jeopardy the World Heritage listing of the eleven sites as a whole.
This action in fact and in spirit, contravenes Articles of the Burra Charter developed by Australia ICOMOS (1) for the conservation and management of sites of cultural significance, contravenes Articles of UNESCO’s Managing Cultural World Heritage manual, and may also contravene Articles of the 1972 World Heritage Convention. At least one of the actions taken on the site appears to be illegal under the Commonwealth’s Environment Protection and Biodiversity Conservation Act (EPBC Act).
At some time in September 2015 the entire contents of the Norfolk Island Legislative Assembly in the Old Military Barracks in the KAVHA site were removed - furniture and fittings, democratic symbols, memorabilia - including the horseshoe Assembly Chamber table and chairs, the Speaker’s Bench, the large committee room table, furniture, flags and decorated wall holders, gifts, plaques, coats of arms, photographs. As objects that related to the Government of Norfolk Island from its inception in1979, they are amongst the most significant cultural heritage materials of the Norfolk Island people who settled here from Pitcairn Island in 1856.
The only known publicly available record of this dismantlement is a posting on Facebook.(2) The work was undertaken without community announcement or consultation.
All the removed cultural heritage items were in place when the World Heritage Council granted World Heritage listing, and represent an important and perhaps world-noteworthy experiment in small-island democracy which persisted for over 35 years. The items removed also enshrined a proud and much longer Norfolk Island democratic tradition, namely the according of equal voting rights to men and women in community decision-making since the arrival of the HMS “Bounty” descendants from Pitcairn Island in 1856 (and on Pitcairn Island before that).
These actions have recently been brought to the attention of Commonwealth Minister for the Environment, the Australian Heritage Council, Australia ICOMOS, and others.
The Norfolk Island Legislative Assembly as a democratic institution was extinguished on 17 June 2015 following the passage through the Australian Parliament of legislation that brought to an end the limited form of self-government enjoyed on the Island since 1979.
Contact: Chris Nobbs, an independent commentator, Norfolk Island
E: firstname.lastname@example.org T: +672 3 22727
(1) ICOMOS is the International Council on Monuments and Sites.
(2) Robin Adams, “Heritage whisked away”, at: https://www.facebook.com/robin.adams.16121471/posts/914735075272403.
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12. WAS THERE EVER A MAJORITY OF NORFOLK ISLANDERS IN FAVOUR OF THE REMOVAL OF SELF-GOVERNMENT?
One of the major arguments put forward by the Australian Government in favour of their proposed reforms is that the repeal of the Norfolk Island Act 1979 and the abolition of self-government, is favoured by the majority of the people of Norfolk Island. The argument was put most recently by Minister Fletcher at the community meeting at Rawson Hall on 28 January 2016. Let us see what information we can bring to bear on this assertion.
The key statement of the Australian Government’s position, in terms of its consequences for Norfolk Island, appears to be the document authored by the Administrator which, amongst other things, summarised for the then Minister Jamie Briggs, the two community meetings held in Rawson Hall on 12 and 19 November 2014. These two meetings were convened to consider and provide community feedback on the recommendations of the Joint Standing Committee on the National Capital and External Territories’ report on Norfolk Island. The first meeting was convened to consider Recommendations 1 and 2, and the second Recommendations 3 to 8. The first meeting was facilitated by Vivien Twyford, an international specialist in collaborative practice based in Australia, and the second by the Administrator himself.
In the Administrator’s final report to Minister Briggs dated 20 December 2014, the first item in the Summary of Findings states:
With regard to the recommendations of the JSC Report, the views of the community are clear:
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 government structures for service delivery, by a local government type body.(1)
This came as a surprise to many on the island, as the contrary case was put strongly at the community meetings and by many who considered that they represented the majority at those meetings.
The Administrator in his report to Minister Briggs listed the following as being included in his consultations:
“(1) Five community wide mail-outs;
(2) Two public meetings - attended by 500 residents. The first forum focused on Governance issues (recommendations 1-2) and was facilitated independently by Vivienne (sic) Twyford. The second dealt with recommendations 3-8 in detail;
(3) Members of the Legislative Assembly (Five meetings as a group and more than 15 separate meetings with individual MLAs);
(4) Two meetings with the Council of (Pitcairn) Elders;
(5) One meeting with the Norfolk Island Chamber of Commerce;
(6) 35 meetings with individuals, and groups of, interested citizens;
(7) over 150 items of correspondence also informed the consultation process.”
We would make the following comments. Item (1) is not directly relevant to our question. With regard to (2), Vivien Twyford in her report of the first consultation meeting, noted that about 300 people attended. That sounds about right. (About 400 attended Minister Fletcher’s recent meeting in Rawson Hall.) With some fall-off in attendance at the second meeting, that would total roughly about 500 attendances. But notice here that while there were about 500 attendances, this represents about 300 individuals. Any addition to that is merely double counting. Concerning (3), the meetings with the MLAs, we know that the Norfolk Island Government officially opposed the reforms, as noted by the Hardgrave report: “The NIG rejects the dissolution of the Legislative Assembly. The Norfolk Island Act 1979 could be amended, not repealed.” The positions of the individual MLAs was also clear from their public statements at the time: of the total of nine, seven were opposed and two supported the reforms. As to item (4), we know from the minutes of the Council of Elders’ meetings that they also opposed the reforms: “Repeal of the NI Act was not supported, but amendments are necessary”, although this is not mentioned in the Administrator’s report. As for (5) there were differing views expressed within the Chamber of Commerce at the time, although it is understood that the Chamber did come out as opposed to the reforms in a letter to The Norfolk Islander after the Administrator’s report was made public.
For items (6) and (7) we have no knowledge of who these people might be, who they might represent, what was included in the ‘correspondence’, or how much double (or even triple) counting was involved. Nor do we know whether they supported or opposed the reforms, or - for our specific purpose here – whether or not in their submissions they made reference to Recommendation 1.
So let’s hazard a summary: on the weight of available evidence, the Administrator’s statement on Recommendation 1 appears very dubious. To enable readers to get a sense of how dubious – from their own perspective – I have included below what I have called “A Game of Likelihood”. Try it out.
What else do we know? We know that on Friday 8 May 2015 the Norfolk Island Government held a referendum of electors who were asked for their opinions 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 upon by the Australian parliament."
We know that the result was that 624 voted “Yes” (68% of votes cast, 64% of the electoral roll), 266 voted “No” (29% of votes cast, 27% of enrolled electors), with 22 “unsure” (2% of votes cast, 2% of enrolled electors). There were 912 votes cast from an electoral roll of 975, a remarkable turnout of over 92 per cent of the electorate.
We also know that Vivien Twyford was asked to facilitate the first community meeting at very short notice, and that at that meeting there was considerable confrontation between parties holding differing views in relation to the Recommendations. Good professional practice would indicate that in this circumstance, an ameliorative process that focused on enabling a broad consensual outlook would be required to properly and adequately elicit community views through such a meetings process. However the Administrator – who had already participated in the first meeting - proceeded by facilitating the second meeting himself, at only one week’s remove from the first meeting. This is an anomalous procedure which, like putting the fox in charge of the pheasants, would not meet the commonly employed ethical standards for market and social research. We also know that Vivien Twyford’s view of the Administrator’s report in relation to Recommendation 1 was that the “overall findings around Recommendation 1 did not reflect what I heard at the one community forum I facilitated…” (personal communication).
We also know that the Administrator in his report to the Minister made mention of the fact that Vivien Twyford received a number of written comments stating that the writer was afraid to speak out at the meeting in favour of the reforms, for fear of reprisals. What did not receive mention was that a number of public servants also felt they had been intimidated by the Administration into not participating at all in the community meetings for fear of retribution and loss of their jobs.
So in summary, how should we view the statement: “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”? As discussed, there is to my knowledge no information in the public arena that could justify this statement; that on the information we do have and on the balance of probabilities the statement is extremely unlikely to be true; and therefore for all practical purposes it should be regarded as false.
I would be pleased to hear from anyone who has additional or different information from that which we have discussed here and which might throw further light on this issue one way or the other. I can be contacted at: email@example.com (and don’t forget to include your name).
Yours sincerely, Chris Nobbs.
(1) Hon Gary Hardgrave, Norfolk Island Community Consultations: Report to the Minister, 20 December 2014.
(2) Twyfords Australia and New Zealand, Report on Outcomes of Norfolk Island Community Forum held at Rawson Hall on November 12, 2014. A report for The Administrator, Australian Territory of Norfolk Island, November 2014.
A Game of Likelihood
Here’s a game you can play to get an idea of how likely it is that the “Administrator’s” statement in relation to Recommendation 1 is credible. You will need a pencil and paper.
(1) Choose a percentage X which for you would represent what is referred to as ‘a substantial majority’, ‘the vast majority’ and ‘the overwhelming view’ (you might choose X = 75% for example).
(2) You have five ‘inputs’ which we will call “two community meetings” (A), “the MLAs” (B), “The Council of Elders” (C), “the Chamber of Commerce” (D), and “Others” (E). Now you have 100 percentage points which you must allocate among these five inputs to represent the relative ‘weight’ or importance you give to the views that each expressed in relation to the abolition of self-government. (Just for argument’s sake you might give 28 points to “two community meetings” (A) and 18 points to each of the other four inputs.)
(3) Now we need to associate with A, B, C, D and E the fractions of the number of people involved in each who (as far as we know) supported the abolition of self-government: call these fractions ‘a’, ‘b’, ‘c’, ‘d’ and ‘e’ respectively. Now I propose that if a small majority of those present at the “two community meetings” opposed the abolition of self-government – say a fraction of 0.57 of those present – then the fraction associated with supporting the abolition would be 0.43, so ‘a’ = 0.43. Two out of the nine “MLAs” supported the proposals, so ‘b’ might be = 2/9 = 0.22. If we assume none of “The Council of Elders” supported the proposals, then ‘c’ = 0.00; and if “the Chamber of Commerce” was equally split in support and opposition then ‘d’ = 0.50; and if 75 per cent of the “Others” supported the proposals, then ‘e’ = 0.75. (Once you get the hang of it you might want to estimate your own fractions here.)
(4) Now for the big moment: multiple A by ‘a’, B by ‘b’, C by ‘c’, D by ‘d’ and E by ‘e’ and add them up. Suppose they total to T percent. For the “Administrator’s” statement to be acceptable, T must be larger than X.
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11. IS THERE ANYONE OUT THERE? (RE: UNANSWERED QUERIES)
On Tuesday December 1st I wrote to the Office of the Administrator as follows:
From: Chris Nobbs <firstname.lastname@example.org>
Subject: Re: Business Advisory Group
I note in the media release from the Administrator, The Hon Gary Hardgrave, titled “Norfolk Island Economic Development Strategy” and dated 07 May 2015, it is stated: “The Community would be aware an Administrator’s Business Advisory Group comprising local business people and individuals was created in mid-2014 to provide community views on economic and business issues.” Would you be so kind as to tell me whether this Group still exists? If it does, could you please indicate who are members of it, and if it does not still exist, could you please indicate who were members of it when it did?
With my thanks and best wishes,
Chris Nobbs, Norfolk Island.
That would seem to be a pretty straightforward query, don’t you think? After all, a simple phone call of the same duration as it takes to write an email, would have sufficed to provide the information requested. On Tuesday 15th December and with Christmas coming up, I wrote again to the Administrator’s Office:
It is now two week since I sent you the email request [as attached]. I have received neither acknowledgement of my email nor a response to my queries. Would you be so kind as to acknowledge receipt of this present email and indicate to me when I might receive an answer to my original queries.
With thanks, Chris Nobbs.
On 5 January, still having received neither acknowledgement nor response, I telephoned the Office of the Administrator on Norfolk Island and it was confirmed to me by the person with whom I spoke that my emails had been “passed on to the Official Secretary and the Administrator”. However it was added that as the Administrator was at that time off the island, I “could expect a response by the end of next week” (i.e. 15 January).
More than two weeks have passed since 15 January, and I have received neither acknowledgement nor response of any written sort since I sent my original email. This curtailment of information flow and lack of transparency inhibits the proper working of democratic processes. It needs to be made part of the public record. I intend to lodge a formal complaint about the Administrator’s Office’s failure to respond to my straightforward request.
And then it occurred to me that I may not the only person on Norfolk Island who has received such a brush-off in recent months. Therefore I here invite anyone who has experienced similar conduct from the Office of the Administrator, and which is documented in some way, to join me (either directly or in confidence) in forwarding the proposed complaint. Anyone wishing to do so can contact me at email@example.com - by c.o.b Friday 12th February please. (Note: This complaint does not include concerns about difficulties experienced by Norfolk Islanders in relation to the Australian Government Information Centre. These hard-working public servants are often just about as much in the dark as we Norfolk Islanders are.)
Yours sincerely, Chris Nobbs.
Footnote. I was pleased to see last week that TNI picked up and published the news item entitled “Australian Government gags Free Speech on Norfolk Island”. This was text from a media release that I wrote in order to make visible the facts of the matter concerning the Administration’s censorship of Radio Norfolk. This media release was distributed widely across Australia, New Zealand, the Pacific Region (in English and French versions), and beyond that as well.
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MEDIA RELEASE (2) - NORFOLK ISLAND IN TURMOIL IN LEAD UP TO MINISTERS VISIT
Norfolk Island is in turmoil as it prepares for the visit of the Australian Minister for Major Projects, Territories, Local Government, and Major Projects, the Hon. Paul Fletcher, MP, slated for 28-29 January. As the new Minister responsible it will be his first visit to the island.
The island’s weekly newspaper The Norfolk Islander (23/01/2016) bristles with letters of complaint over the Australian Government’s conduct on the Island. A Community Meeting with the Minister scheduled for Thursday 28 January, has the potential to be fiery.
In June 2015 the Australian Commonwealth Parliament passed the Norfolk Island Legislation Amendment Act 2015 which, together with associated legal changes, has:
- stripped the island of its Legislative Assembly and the limited form of self-government it previously enjoyed;
- removed the right of Norfolk Islanders to make political decisions by referendum;
- removed mention of the Pitcairn Island (and the HMS "Bounty") heritage from the preamble of the relevant Act (previously the Norfolk Island Act 1979);
- disenfranchised all non-Australians from voting in island elections; and is opening up the island to unrestricted immigration.
The Australian Government has embarked on a process of transitioning Norfolk Island to the status of a regional council modelled on those in the State of New South Wales, to be completed by 1 July 2016. This is against the wishes of the majority of Norfolk Islanders.
In the lead-up to the Minister’s visit, The Norfolk Islander contains several letters drawing attention to matters including:
- the undemocratic nature of the so-called "Advisory Council" appointed by the now-disgraced former Minister, Jamie Briggs, to provide community input to the transition process;
- the lack of information provision by the Australian Government and the consequent demoralisation of the community;
- the damage to the island society from unrestricted immigration;
- the conduct of the Norfolk Island Administrator himself;
- the exorbitant cost of consultancy services in producing a health services plan for the island that has never appeared.
(A selection of letters from The Norfolk Islander, 23 January, 2016, is reproduced in the Attachment hereto, with permission.)
One writer complains that "The most distressing aspect about Canberra’s ‘takeover’ of Norfolk Island has been the sheer Commonwealth bastardry in an extremely biased and corrupted political campaign." Another laments that it is a "real shame - this place could have been a real gem in the crown, a show piece for the world."
The organisation Norfolk Island People for Democracy is planning an appeal to the United Nations to request protective right as a Non-Self-Governing Territory.
Chris Nobbs, Norfolk Island
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10. THE NORFOLK ISLAND ADVISORY COUNCIL PROCESS IS A DISGRACE TO AUSTRALIA
The Norfolk Island Advisory Council (NIAC) was set up in June 2015 by Jamie Briggs, the now-disgraced former Assistant Minister for Infrastructure and Regional Development, with the terms of reference “to provide a forum for the Norfolk Island community to raise issues and provide feedback to the Administrator and the Commonwealth Minister.” Ever since, it has provoked a steady stream of criticism from Norfolk Island citizens, much of it recorded in the columns of The Norfolk Islander and Norfolk Online. I would like to add my voice to this chorus. In my view the process is a sham and a disgrace to Australia, and any recommendations it has made or might make should be discarded. This process should be abandoned.
First, some background for off-islanders. The NIAC has issued in recent months a sequence three discussion papers: “A Future Norfolk Island Regional Council” relating to possible functions and priorities (DP1); “Service Delivery Model” (DP2); and “A Modern Legal Framework for Norfolk Island” (DP3). Each of these was accompanied by a self-completion questionnaire (‘feedback form’) inviting responses on specific issues. Submissions could be made in writing using these forms, or not, and/or by making an oral submission at ‘community forums’ convened by NIAC. Invitations to discuss issues with NIAC prior to making a submission, were also extended. From these returns, NIAC produces a summary of submissions document. NIAC also produces a monthly community bulletin and provides summary records of its own meetings on its website. It produced an initial report to the now-responsible Minister, Hon. Paul Fletcher MP, dated 2 December 2015. A fourth discussion paper on a proposed economic development strategy for the island is scheduled for release in January.
The core issue surrounding the whole NIAC process is one of bias. Bias is defined by the Oxford Dictionary as: inclination or prejudice for or against one person or group, especially in a way considered to be unfair. Suggested synonyms are: prejudice, partiality, favouritism, unfairness, intolerance. The NIAC process does not project community views in any fair and reasonable manner. Let us look at the matters one by one.
(i) bias in composition of NIAC membership. Membership of the NIAC was established by self-nomination, with five applicants being hand-picked by former Minister Briggs. (Former Chief Minister and former Speaker in the Norfolk Island Legislative Assembly David Buffett, initially invited to be a member, had his invitation withdrawn by Minister Briggs for ‘disruption’ following his (Buffett’s) presenting a ‘remonstrance’ to the Commonwealth Parliament which he was obliged to do as Speaker on instruction of the Legislative Assembly.(1)) (A fairer selection process would have been to engage the community through voting for nominated candidates.)
(ii) bias in the NIAC secretariat. The secretariat for the NIAC is provided by public servants from the Department of Infrastructure and Regional Development (DIRD), the same Commonwealth department responsible for administering the Norfolk Island Legislation Amendment Act 2015. The secretariat therefore cannot be considered as independent in the process. The Commonwealth has an agenda that it wants to push through. This is not the same as providing thoughtful analysis of the issues for the benefit of the Norfolk Island community. As we have discussed in earlier letters of this series, some important aspects of the Commonwealth’s view of Norfolk Island appear both pre-determined and based on inadequate analysis.(2) (In a fairer process the Commonwealth would have provided funds to the NIAC to hire its own secretariat.)
(iii) bias in the presentation of information. It is clear that the NIAC Secretariat has developed the discussion papers - that’s what secretariats do - and which presumably were then accepted and/or modified by NIAC, before being distributed to the community. The substance of the discussion papers appears to be along the lines of: Here’s what we (the Australian Government) want; if you want something different, figure it out for yourself and tell us. What is not provided is any fair discussion of the pros and cons of even the major alternatives from which anyone might be able to make an informed choice. Some of the questions asked have been complex and sophisticated economically, legally, and/or politically e.g. in relation to provision of monopoly services in a small island, privatisation, the role of private offshore investors, and moral judgements with regard to outcomes and methods. (A fairer process would ensure the provision of unbiased information either in the discussion paper, or by discussion sessions with citizens in which pros and cons of different choices could be explored.)
The stark difference between secretariat-originated text and community-expressed concerns can be seen by comparing the questions asked in DP2 with the questions posed by community member Mary Christian-Bailey at the NIAC community meeting to discuss it.(3) I understand that no written response to Mary’s questions was ever received by her.
(iv) bias in who can adequately participate in the process. The processes of NIAC are heavily biased in favour of those who have the time and the ability to read through a welter of written information about sophisticated subjects. This approach puts a very heavy burden on Norfolk Island citizens to understand Australian and New South Wales laws and identify their interests in relation to them. Furthermore the settings of the NIAC community meetings are also potentially intimidating for some, with formalities including councillors sitting at a white-clothed table separated from citizen-participants, the use of formal meeting procedures including microphones, the recording of the names of attendees, and the prohibition of audio-recording of the meetings. (Fairer and more accommodating processes of conducting community meetings are well established, as are straightforward survey processes for testing public opinion in an unbiased manner.)
(v) bias in the secrecy of some submissions. NIAC states that it is prepared to receive submissions on a confidential basis from individuals and groups merely on the grounds that the request is made. In DP2 NIAC emphasises in bold type that “to ensure transparency of this process anonymous submissions will not be considered”. The same principle should apply to the transparency of submissions given to the NIAC which are anonymous to the community. Although there may be grounds for secrecy in some limited cases, NIAC’s practice opens up the possibility that small cliques of unknown composition and other vested interests can influence the deliberations without community knowledge or challenge. (A fairer process would strictly limit ground for claiming confidentiality, and announce what these grounds were in individual cases.)
(vi) the improper and inadequate use of numbers in reportage. The NIAC report on community feedback on discussion paper DP1contains a number of statements along the lines of this one: “Question 4: How many councillors should there be? Respondents generally favoured a small Regional Council with around 50% of respondents supporting a five member Regional Council.”
Now this, and the other statements like it, are meaningless unless we know how many respondents answered the question (Was it 10 or 500?). I pointed this out to NIAC in my written submission on DP2. NIAC’s subsequent response has been not to clarify such matters by publishing the numbers, but to stop publishing numbers altogether! Even if there were no other sources of bias in the NIAC process, this matter alone would be sufficient to raise important questions about the credibility of the consultation process. (A fairer - transparent and factual - process would publish the relevant numbers, and then draw the appropriate conclusion. If necessary it would then detail why things should be otherwise.)
(vii) biased (meaningless) reporting to the Minister
Cumulative biases lead in the direction of untruth. NIAC in its report to the Minister (available on the NIAC website), having itemised the consultations it has carried out, concluded:
“The Advisory Council considers the views represented through the consultation process are broadly representative of community sentiment as the discussion papers were widely circulated and advertised, and all community members were afforded an opportunity to put forward their views.” (Att.B, p1)
For the reasons just canvassed, this statement must be regarded as nonsense. In content it is no different from a statement that one might expect from the publicity branch of the North Korean government. It may represent the sum of the individual views of members of NIAC, but it cannot be taken to represent the freely given views of the Norfolk Island community, and soft words cannot span the gap.(4) And the gap is further magnified: by the fact that across a wide spectrum of community political opinion, some who have seen through the Commonwealth puppeteering have opted not to participate in any way in this process; and by the implicit intimidation that has been felt by some public servants wishing to participate in contradiction to the Administration viewpoint.
The biases we have observed and discussed are so pervasive as to render the NIAC process null. And we should recall that for the community this consultation process is not about whether or not to provide school meals, but about the consequences of perhaps the biggest social upheaval this island community has experienced in 160 years. Finally we should note that NIAC’s role is only advisory: that is to say that the Commonwealth can cherry-pick from NIAC reportage whatever it wants and ignore the rest. That is why it is so important that the NIAC process should be unbiased.
Perhaps we should spare just a little sympathy for the individual members of NIAC, having been given completely inadequate and inappropriate resources to do their proper job. In a word, they have been duded by the Australian Government.
Next week I intend to apply for access to the NIAC questionnaire results under the Freedom of Information Act; I will not however be submitting a weekly letter.
- Chris Nobbs (Dr)
(1) Kirsten Lawson, ‘Jamie Briggs sacks Norfolk Island Speaker from advisory council for “disruption”’, Canberra Times, 16 June 2015.
(2) For example: Chris Nobbs, ‘Norfolk Island Regional Council and the proposed “core principles”’, The Norfolk Islander and Norfolk Online, 30-31/10/2015; The Commonwealth’s Model and Norfolk Island’, idem, 6-7/11/2015; ‘Norfolk Island Reform Scenarios - comparing the two CIE reports’, idem, 27-28/11/2015.
(3) Mary Christian-Bailey, ‘Submission to the Advisory Council’, The Norfolk Islander, 3 October 2015. Reproduced in The Norfolk Islander and on Norfolk Online.
(4) See further: Geoff Bennett, Submission to the Advisory Council entitled ‘The credibility of the Advisory Council is now in tatters’, also available at:
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9. NORFOLK ISLANDERS MUST STAND THEIR GROUND OVER KAVHA
A former Norfolk Island Administrator once explained to me that he saw a central and very important part of his role as representing Norfolk Island’s interests to Canberra. How times have changed. Now it is evident that the recent and current Administrators have seen their job as telling Norfolk Island what Canberra wants. The idea of partnership has almost completely broken down and been replaced by an ideology of command and control, with bullying on the side.
Nowhere is this more evident than in the relation between Norfolk Island and the Australian Government over the Kingston and Arthur’s Vale Historic Area (KAVHA), listed as a World Heritage site along with 10 other convict sites in Australia. A very good draft heritage management plan has recently been prepared for KAVHA (1), but in the present climate, Norfolk Islanders who value KAVHA in all its beauty and complexity are likely to have to fight for a decent and equitable outcome when it comes to implementation of this strategic plan. We consider a few recent developments.
First, the removal of the KAVHA Board Secretariat from Number 11 Quality Row, in the KAVHA site. (The KAVHA Board until its recent dismissal, comprised representatives of Norfolk Island Government, Norfolk Island citizens, and the Australian Government. The two governments shared responsibility for managing and funding KAVHA: which the Norfolk Island Government still does but without management representation.) On 24 September 2014 the Administrator wrote to the CEO of the Administration requiring that the KAVHA Board secretariat vacate Number 11 at two weeks’ notice. The reason given was that the Administrator was seeking expanded office space and the building was underutilised. This peremptory instruction was given without discussion or caveat, and in face of protestations from the Norfolk Island Government. The building then stood unused for several months before becoming the office of the Norfolk Island Advisory Council.
Second, as a consequence of the passage of the Norfolk Island Legislation Amendment Bill through the Australian Parliament (the Act assented to on 26 May 2015) the Norfolk Island Legislative Assembly was abolished as of 17 June 2015. This brought to an end the self-government that the Island had enjoyed since 1979.
Third, at some time in September 2015 the entire contents of the Norfolk Island Legislative Assembly in the Old Military Barracks in the KAVHA site were removed - furniture and fittings, democratic symbols, memorabilia - including the horseshoe Assembly Chamber table and chairs, the Speaker’s Bench, the large committee room table, furniture, flags and decorated wall holders, gifts, plaques, coats of arms, photographs, and Norfolk Island seal. The only known publicly available record of this event is a posting on Facebook.(2) Whoever gave the instruction for this work, it was undertaken without any community announcement or the calling of tenders, or intervention by the Administrator.
All these tangible elements of heritage were in place when the World Heritage Council granted World Heritage status to the site, and their removal constitutes not only unacceptable conduct by those designated to manage the site but an illegality under the Environment Protection and Biodiversity Conservation Act (EPBC Act).
However one might judge the success of the Legislative Assembly process when extant, it was an important and perhaps world-noteworthy experiment in small-island democracy which persisted for over 35 years, and is as much part of the heritage value of that area as many other elements of KAVHA. Furthermore, it enshrined a proud and much longer Norfolk Island democratic tradition, namely the according of equal voting rights to men and women in community decision-making ever since their arrival from Pitcairn Island in 1856 (and on Pitcairn Island before that).
Fourth, on 23 September 2015 the Administrator announced by media release (3) the dismissal of the KAVHA Board, replacing it with a two-tier organisation of a Steering Committee consisting of a Commonwealth appointee and a member of the Department of Infrastructure and Regional Development (DIRD), and a KAVHA Advisory Committee, chaired by a another DIRD member, with no managerial role, with reduced Islander representation, and advice from which can be ignored at whim.
These actions singly and severally, in fact and in spirit, contravene Articles of the Burra Charter developed by Australia ICOMOS for the conservation and management of sites of cultural significance, contravene Articles of UNESCO’s Managing Cultural World Heritage manual, and may also contravene Articles of the 1972 World Heritage Convention.
There should be no surprise that KAVHA has been acknowledged to be of World Heritage status (along with the 10 other Australian Convict Sites). As World Heritage sites go, it is a remarkable and remarkably complex one, containing outstanding convict buildings and colonial Georgian architecture, and also Polynesian remains, Pitcairner history, an active cemetery, a popular public beach, a surfing and waka racing venue, the island’s legislative assembly (currently dismembered), a golf course and clubhouse, the venue for service organisation meetings, an economically important and active wharf, playing fields, private property, a church, the Island’s war memorial, museums, a workshop, the place for significant community cultural and historic events, and a bucolic setting with pasturage for cattle. In fact the area lies at the heart of the life of the Norfolk Island community. Removal of several of these functions from the KAVHA site have already been openly discussed by administration figures, as have asphalted carparks and enlarged signage.
The World Heritage Convention states clearly the responsibility of participating nations to “adopt a general policy that aims to give the cultural and natural heritage a function in the life of the community and to integrate the protection of that heritage into comprehensive planning programs”.(Article 5(a))
The events show a lack of awareness by the Administration of the community’s interests. And we need to recall that it was in its pre-2014 state, with all its complex functions and activities, that UNESCO declared it to be part of the world’s heritage, and agreed to its management as a shared responsibility between the Norfolk Island Government and the Australian Government. Currently, management by the Australian Government is by public silence followed by decree, without genuine community consultation or input. It would be unconscionable to allow this remarkable heritage area to become a monumental shame, as a result of the conduct of the Australian Government, in the heart of this island community. KAVHA must revert to shared responsibility and management between the Norfolk Island government (whatever form that may in future take) and the Ministry for the Environment, who must take direct responsibility for the heritage and cultural aspects of the site.
The current situation is exacerbated by the fact that it appears that the current Australian Government is engaged in a deliberate attempt to write “Norfolk Islandness” out of history. The removal of reference to the Pitcairn Islanders from the preamble to the Norfolk Island Act 1979 in the Norfolk Island Legislation Amendment Act of 2015, and the permitting of unrestrained immigration to the island, provide the most egregious - but as we have just seen not the only - evidence of that move. This approach is both historically false and socially divisive.
So what can Norfolk Islanders who value KAVHA and its complexity do to seek an appropriate balance of historic and living-cultural meanings for the site when confronted with this situation? Here are some ideas:
(a) Write to the Minister for the Environment expressing your concerns about recent developments, noting his responsibilities under the EPBC Act in relation to sites on Australia’s National Heritage Register and World Heritage sites, and specifically requesting:
(i) that he call a halt to the unilateral removal of fixtures, fittings and objects from the World Heritage area; (ii) that he require the return to the Old Barracks building of those fixtures and fittings already removed and their reconstitution as an historical memorial to a vital time in Norfolk Island’s rich history; (iii) that return be made to the idea of partnership and shared responsibility in the management of KAVHA, and for transparency and the public justification of plan implementation; (iv) that he take direct control of the heritage and cultural aspects of the site rather than continue sub-contracting these responsibilities to DIRD;
(b) Write to the Australian Heritage Commission drawing attention to the current parlous situation of KAVHA heritage management on Norfolk Island, and requesting the Commission’s assistance in resolving the matter;
(c) Make yourself aware of the contents of the draft heritage management plan document, ask for its formal adoption, and closely monitor the steps taken to implement it;
(d) Insist on your right to attend meetings of all bodies considering the future of the KAVHA site. Under the strategic principles of the draft heritage management plan in relation to community involvement, such meetings should be open to interested persons. (The initial meeting of the newly-created KAVHA Advisory Committee will be held on Norfolk Island on 14 January 2015.)
- Chris Nobbs (Dr)
(1) Department of the Environment (Consultants Jean Rice Architect, CONTEXT, and GML Heritage), Kingston and Arthur’s Vale Historic Area Heritage Management Plan. Exhibition Draft, February 2015, Canberra: DoE. (document to be finalised)
(2) Robin Adams, “Heritage whisked away”, at: https://www.facebook.com/robin.adams.16121471/posts/914735075272403. A similar posting is at Norfolk Online http://www.norfolkonlinenews.com (subscription-only area).
(3) Administrator of Norfolk Island, media releases: “Kingston and Arthur’s Vale Historic Area (KAVHA) ‘refreshed’”, 23/09/2015; “KAVHA Advisory Committee members”, 13/11/2015, at: http://regional.gov.au/territories/norfolk_island/administrator/
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8. NORFOLK ISLAND: CHRISTMAS READING
IN tradition of all the best media outlets around the world including The Norfolk Islander and Norfolk Online, I offer some suggestions for Christmas and summer reading. They all come (with one exception) from recent editions of Island Studies Journal (ISJ), the online peer-reviewed journal of the International Small Island Studies Association, and they are all relevant to various aspects of Norfolk Island life and its future. The articles can all be found at <http://www.islandstudies.ca/node/390> along with many others that may be of interest. If you do read these you’ll be light-years ahead of DIRD. The summaries given in what follows are edited versions of the author’s own descriptions, referenced by: title, author, ISJ volume (and number), year, pages.
‘Genuine Jersey’: Branding and Authenticity in a Small Island Culture (Henry Johnson, University of Otago, New Zealand: ISJ, 7(2), 2012, 235-258). Jersey has attained a recognized international reputation especially in agriculture, tourism and finance. Over the past century, this small island has developed rapidly as a tourist destination and, since the 1960s, as a leading international finance centre. This paper discusses how a public-private organization uses a notion of islandness in order to help add value to local produce and products, and at the same time offering a sense of authenticity in terms of provenance.
Displacement of Youth from the Isle of Man: The Role of House Price Inflation (Brendan Canavan, Nottingham University Business School, UK: ISJ, 6(2), 2011, 203-226). Small islands frequently suffer from population decline, especially of young people, putting continuity of community at risk. At the same time, their limited size can mean an intense competition for housing stock, particularly in scenic or economically successful islands which draw investors and migrants: a dynamic that fuels inflation. This paper investigates property inflation on the Isle of Man and its threat of displacing young inhabitants and upsetting social sustainability.
On the rationality of Manx crabs (Tove Ahlbom, University of Gothenburg, Sweden: ISJ, 9(1), 2014, 123-134). This paper investigates the implications of the “expressions of harmony and solidarity” often observed in small island societies. To do so, aspects of the Isle of Man’s political and social life are discussed from the perspectives of popular rule and rationality. This paper argues that a homogeneity in preferences and the political practices of small island states might be a rational way of protecting a vulnerable economy and thus ensuring economic growth and a sufficient allocation to each island resident of the scarce resources required to survive.
Riding the Globalization Wave (1974-2004): Islandness and Strategies of Economic Development in Two Post-colonial States (Marina Karides, Florida Atlantic University, USA: ISJ, 8(2), 2013, 299-320). In 1974 the Republic of Cyprus and the Republic of Trinidad and Tobago, both former British colonies, experienced significant events that permanently altered their economic and social realities. The coincidence of these occurrences offers an opportunity for a historical comparison of island development. In effect, this paper argues that the economic paths of these islands were shaped largely by their responses to neo-liberalism. Cyprus’ support for domestic enterprises and resistance to neo-liberal policies throughout the early 1990s compared to Trinidad and Tobago’s forced acquiescence to them and reliance on its energy sector explain the difference in their economic trajectories.
Empire and Erasure: A Case Study of Pitcairn Island (Maria Amoamo, University of Otago, Dunedin, NZ: ISJ, 8(2), 2013, 233-254). The smallest Pacific community with a separate identity is Pitcairn Island, the last British “colony” in the Pacific. Using critical ethnography this case study of Pitcairn examines the notion of erasure in relation to the history and politics of colonization and decolonization. Erasure is inextricably tied to the issue of power; the imbalance of power and the scrutiny of processes of social negotiation between centre and periphery. As a subnational island jurisdiction the issue for Pitcairn is how to reclaim identity, maintain autonomy without sovereignty, and create a sustainable future for its small island community.
And finally, a new book which will have resonances for many on Norfolk Island. It is Stuart Hill’s Stolen Isles: Shetland’s True Status, 2nd edition, 2014. Forvik: Forvik University Press, pbk, 200pp. No ISBN number, £9.95 stg. Also available at: <http://www.stolenisles.com> Both the Shetland and Orkney islands off the west coast of Scotland are, according to Hill, sovereign entities that should not be ‘part’ of Scotland at all. The Scots had recognized Norwegian sovereignty over Orkney and Shetland as early as 1266, in the Treaty of Perth. The islands were then pawned by the King of Norway to the King of Scotland in 1468 and 1469, with clauses providing the right to redeem the islands back. But, because of a series of events over the centuries, the islands were never returned. Moreover, because land in Shetland is held by allodial (and not feudal) title – allodial title constitutes ownership of real property (land, buildings and fixtures) independent of any superior landlord – and the King of Norway only owned outright about 10 per cent of land in Shetland anyway, the remaining 90 per cent was – a presumably still is – owned outright by its residents, who are thereby deemed to be sovereign. So the story goes. For a commentary see: < http://www.shetnews.co.uk/features/scottish-independence-debate/8097-referendum-is-stuart-hill-right>
In conclusion, may I wish everyone on Norfolk a very Happy Christmas and a relaxing holiday season. This series will hopefully recommence on 8-9 January.
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7. THE POPOSED ECONOMIC DEVELOPMENT STRATEGY: GOOD SENSE, FAIRY STORY, AND DECEPTION (Part II)
Last week I discussed why the SGS/DIRD Economic Development Strategy proposed for Norfolk Island was part good sense and part fairy story. This week I want to say why it is also part deception.
We need to consider what the document does not say. There is no sense given in this document of anything being limited on this small island. Not the power supply, not the water supply, not the road network, not waste disposal. The reality is otherwise. To take a few simple examples: in this dry year on the first day of summer, water is already in short supply and some families are having to buy water; or again, how much ‘development’ will it take before Norfolk’s narrow roads are transformed for tourists from rural lanes to clogged commuter routes? There appears to be an almost complete acceptance in this report that economic growth can go on without limit and everything else will adjust around that. In my view this is an exceedingly foolish and short-sighted view.
In the whole of the report the word ‘limit’ occurs once, and this in relation to bed numbers. The word ‘sustainability’ doesn’t occur at all, but the word ‘sustainable’ does: as in ‘sustainable community’ (whatever that means), and on page 8: ‘development of initiatives … to maximise the clean and pristine aspects of the Island, where possible, which are viable, sustainable and promote private sector investment’ (whatever that means). But ‘sustainable’ has only a trivial meaning if it is not firmly anchored in the sustainability of the natural world - resources and environment - which provides the essential support for any economic activity being considered.
For a small fragile demi-paradise such as Norfolk is, which lives by tourism, an environment strategy is at least as important as an economic development strategy, and this latter should not proceed unless and until an environment strategy is laid out beside it. The consideration of environmental matters as marginal to economic development is a recipe for environmental degradation, as many countries have discovered to their cost (take the present condition of the Great Barrier Reef for example).
Furthermore small island economies are subject more than most to significant variability and uncertainty (of weather, metropolitan market conditions, global trends), which counsels a precautionary approach in policy. However in this report the word ‘precaution’ does not appear at all, and the word ‘uncertainty’ only once (in relation to ‘misinformation in the transition process’, would you believe). The reality is that the Norfolk Island economy needs ‘weather proofing’ as much as it needs economic growth.
Again, we need to look at how we measure success. There are fifteen proposed indicators in this report: almost without exception focussed on growth of economic activity of some sort. We need to be very careful about using economic indicators as measures of human well-being. Take one simple example from the environment. If a stand of native forest is cut down, GDP rises because of the additional employment created and the sale of the timber, but nowhere in the economic accounts is the loss of the forest, or of the services it provided in erosion control, biodiversity retention, and the absorption of carbon dioxide and the respiration of oxygen, brought into account i.e. the economic gain is counted but the environmental loss is not. As World Resources Institute economist Robert Repetto observed some years ago: ‘A country could exhaust its mineral resources, cut down its forests, erode its soils, pollute its aquifers, and hunt its wildlife and fisheries to extinction, but measured income would rise steadily as these assets disappeared.’ It is important to focus on much more sophisticated measures of well-being than those emphasised in this report.
And again, we need to be aware that as a strategy document the SGS/DIRD report is pitched at a very general level, and does not go into detail as to how these things - even where they are accepted - should or might be implemented. There are often very different ways of achieving stated ends, so that there will be many important choices and decisions yet to be made along any road to implementation.
Finally we might reflect on the fact that a successful economy is not an end in itself. As the Greek philosopher Aristotle surmised over 2000 years ago: ‘The life of making money is a life people are, as it were, forced into, as wealth is clearly not the good we are seeking, since it is merely useful for getting something else’. With regard to Norfolk, that ‘something else’ to me would include a peaceful life, a healthy and happy family, sufficient food, a good environment. Is it only the seditious among us who might think that that is what the island already had - give or take a bit?
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6. THE PROPOSED ECONOMIC DEVELOPMENT STRATEGY: GOOD SENSE, FAIRY STORY, AND DECEPTION (PART I)
The report Norfolk Island: Economic Development Strategy, over the imprimatur of SGS Economics and Planning, and DIRD, was released on Island on 27 October 2015.(1) (It carries a publication date of July 2015, but it is not known why the release was delayed). We know that DIRD can alter reports submitted to it up to sixteen times (2), so that we must presume that this report represents not only the views of the consultant but also in large measure the considered views of DIRD. (The report does not identify the terms of reference given to the consultant for this report.)
The 24-page report outlines a vision for Norfolk Island as a “sustainable community where the island’s culture, heritage and environment continue to be recognised and highly valued. These attributes will generate economic development opportunities, which will enhance the well-being of all island residents.” The report then specifies principles which are considered to underlie the attainment of this vision, and develops key themes for economic development and a range of ‘key opportunities’ and actions which may fulfil them. It sounds like very clear sailing.
In my opinion, the report is equal parts good sense, fairy story, and deception: and of course these categories can overlap in practice. I will explain why I think this in relation to the first two of these in this letter, and leave consideration of the third until next week.
First, credit where credit is due. The report elaborates on three economic development themes: on tourism and cultural development, on environment, research and education, and on agriculture, horticulture, fishing and cottage industries. These are all areas of interest for Norfolk over the long term, and to see them expressed in this way, and the opportunities they may give rise to, is positive. In the lists of opportunities, tourism of course is given a key place. At the same time the ideas of diversification to cottage industries, to productive use of the land in agriculture and horticulture, and of cottage industries, eco-friendly industries, and scientific research, are all positives in my view.
The report paints a very optimistic picture of what should or might happen in the future. At one level this ‘blue sky’ thinking is quite acceptable, as it is always important for organisations and societies to have a sense of their future goals. However this can very easily tumble over into unreality and this is where the fairy story comes in. One aspect of this is that to justify its virtuous vision of the future, there is a tendency in the report to paint the worst picture of present conditions: almost as if life can’t go on. If this is indeed so, then one way of reading it would be as an indictment of the past Commonwealth conduct in not giving Norfolk Island a hand when it needed it.
Norfolk Island certainly does have a number of pressing and immediate problems including: the state of the roads, port facilities for cargo and passengers (currently being assisted by the Commonwealth), power generation, access to building aggregate, Argentine ants, and widespread and rampant weed infestation, all of which need attention just to keep the Island’s head above water. As well as dealing with these issues on a day-to-day basis, the proposed regional council is exhorted to develop a Burnt Pine commercial precinct master plan, a waste management strategy, a master plan for the KAVHA site (sic), a full cost benefit analysis to assess the best medium to longer term port (or port combination) upgrade options, and a full cost benefit analysis of options to further improve internet connectivity between the Island and mainland/international.
And all this programme is to be done by a regional council representing around 2000 souls, whose revenue raising powers are being emasculated by the removal of Norfolk Island GST and customs duty, the potential privatisation of profitable assets, and the presumptive reliance on land-based rates. As Professor Common suggested in his report on CIE2014, as discussed last week, the Commonwealth appears to have no coherent notion as to where the money is coming from or how all these thing are to be accomplished. This is a very serious matter for Norfolk Island, and one to which we will return.
- Chris Nobbs
(1) SGS Economics and Planning and Department of Infrastructure and Regional Development, Norfolk Island Economic Development Strategy, Canberra, July 2015.
(2) Towell, N., “APS department orders report to be rewritten 16 times”, The Canberra Times, 15/04/2015.
Recently my attention was drawn to the Australian Quarterly Essay entitled “Political Amnesia: How We Forgot How to Govern”, by respected Canberra political journalist and editor Laura Tingle.(1) She quotes two former Australian Treasury bosses as saying that decades of government outsourcing and waves of senior redundancies had left much of the nation’s public service unable to provide proper and effective advice to politicians and their voters. Norfolk Islanders might well wish to reflect on this assertion (and maybe read the essay).
The response to Ms Tingle’s essay by the Minister for Human Services and Veterans Affairs, Stuart Robert, was to declare it “Crap”.(2) If this is deemed to be an appropriate level of ministerial expression, then I would like to upgrade my description of the two CIE reports referred to in last week’s letter from “baloney” to “hogwash”. The more important point here being of course that, as Professor Common’s report has demonstrated, the CIE2014 report is completely unreliable and the Commonwealth should stop referring to it as reflecting a proper estimate of the economic advantages to Norfolk Island of joining the Australian taxation and welfare system.
(1) Tingle, L., “Political Amnesia: How we Forgot How to Govern”, Quarterly Essay 60, Collingwood, Vic., December 2015.
(2) Thompson, P., “Australian Public Service devoid of policy?”, The Canberra Times, 27/11/2015.
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ECONOMIC IMPACT OF NORFOLK ISLAND REPORM SCENARIOS REPORT (2014) ... by Centre for International Economics Canberra & Sydney
Assistant Minister for Infrastructure and Regional Development, the Hon. Jamie Briggs MP has asked me to release the independent analysis of the Norfolk Island economy by the Centre for International Economics (CIE).
The executive summary of the CIE report which notes substantial economic improvements from the extension of the Australian taxation and social security systems:
To read this Report in full Click here
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ECONOMIC IMPACT ASSESSMENT OF EXTENDING COMMONWEALTH LEGISLATION TO NORFOLK ISLAND REPORT ... by Centre for International Economics Canberra & Sydney
THE CENTRE FOR INTERNATIONAL ECONOMICS was commissioned by the Commonwealth Department of Transport and Regional Services to undertake an assessment of the economic impacts arising from extension of Commonwealth legislation to Norfolk Island.
To gain an appreciation of the structure and operation of the Norfolk Islandeconomy, Norfolk Island was visited in early August 2006 for the purpose of undertaking stakeholder consultations. Meetings were held with theNorfolk Island Government and bureaucracy, the Administrator, private sector businesses, government business enterprises, and individuals.
The CIE would like to thank all stakeholders who participated in the consultations,and who provided information/data in response to questions about the operation and performance of the Norfolk Island economy. The CIE is appreciative of the effort numerous people, particularly within the Norfolk Island Government, went to in tracking down and providing data.
Finally, the Norfolk Island Government is proposing, almost on a daily basis, to undertake some significant reforms, especially in the area of taxation. If these proposed reforms go ahead, then there is a chance that some elements of this report or the assumptions made will already be out of date.
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MEDIA RELEASE (1) - A COMPARION OF TWO CIE REPORT (2006, 2014) ON THE ECONOMIC IMPACTOF NROFOLK ISLAND REFORM SCENARIOS REPORT ... Commissioned by Dr Chris Nobbs and written by Professor Michael Common
Table of Contents
1.1 The brief
1.2 Background information supplied
2. Differences in results between CIE2006 and CIE2014……………….4
2.1 The 2006 report
2.2 The 2014 report
2.3 Comparison - are the differences significant?
3. Explaining the differences……………………………………….……7
3.1 Model structures
3.2 Model parameters and data
3.3 The starting situations
3.4 The baselines
3.5 Reform scenarios
3.7 Norfolk Island Government finances and Commonwealth support
4. Concluding remarks…………………………………………………..11
References / Contacts
Michael Common (BA, BPhil University of Liverpool) is an English economist. Between 1968 and 1988 he held teaching appointments in economics departments at the Universities of Liverpool, Southampton and Stirling. From 1988 to 1998 he was a Senior Fellow at the Centre for Resource and Environmental Studies (now the Fenner School of Environment and Society) at the Australian National University, Canberra. In 1991 he served as an Associate Commissioner for the Industry Commission Inquiry into the costs and benefits for Australia of acting to reduce greenhouse gas emissions. From 1998 to 2003 he was Professor and Deputy Director at the Graduate School of Environmental Studies at the University of Strathclyde, Glasgow. He has held visiting appointments at a number of institutions including Rutgers Graduate Business School, the Open University, the University of York, and the Vienna University of Economics and Business. He is the author of many papers and a number of books, including being co-author of the globally successful textbook Natural Resource and Environmental Economics, now in its fourth edition. Currently retired and living on the Isle of Bute (Scotland), he remains academically active.
1.1 The brief
The Centre for International Economics, a Canberra and Sydney based consultancy, has provided the Australian Commonwealth Government with two reports, in 2006 and 2014, on the economic implications for Norfolk Island of it becoming, essentially, part of Australia. I have been asked to provide a short, plain language, and comprehensible, account of the important differences between the two reports.
I am a retired Economics Professor, now resident in the UK. I have never visited Norfolk Island, but I have knowledge of Australia, and of the model used in the two reports, based on being a Senior Fellow in the Centre for Resource and Environmental Studies at the Australian National University from 1988 to 1998.
1.2 Background information supplied
Dr Chris Nobbs provided me with copies of the two reports (1)(2), hereafter CIE2006 and CIE2014. Dr Nobbs has also provided me with background information, from which I take the following to be the most salient points for the purposes of this report.
CIE2006 was commissioned by the Department of Transport and Regional Services, which wanted an assessment of the economic impacts that would arise from the extension of Commonwealth legislation to Norfolk Island. The report was delivered in October 2006. In December 2006 the Minister for Local Government, Territories and Roads announced that the plan to restructure the governance of Norfolk Island would not proceed.
In November 2010 in a Memorandum of Understanding between the Commonwealth and Norfolk Island, the latter ‘agreed in broad terms to participate in the Australian taxation and social security systems on the basis that there will be a net benefit for Norfolk Island and its community and there is appropriate consideration of local circumstances’.
In November 2014 CIE2014 was delivered to the Minister for Infrastructure and Regional Development.
The Norfolk Island Legislation Amendment Bill passed the Australian Parliament in May 2015. As a result Norfolk Island will become a regional council in the state of New South Wales.
While there a number of other inquiries and reports over the period 2000-2014, it might be inferred from the timing that CIE2014, which could be read as forecasting substantial ‘net benefit for Norfolk Island and its community’, played an important role in the 2015 outcome.
CIE2006, as discussed below, estimated smaller Norfolk Island net benefit. Whereas CIE2014 was published at the time of its delivery, CIE2006 was not. In July 2011 Mr B. Sanderson applied to the Department of Infrastructure and Regional Development for a copy of CIE2006. The copy supplied was heavily redacted. Mr Sanderson appealed this decision and after a lengthy process the entirety of CIE2006 became publicly available in early 2015.
Reading CIE2006, it is unclear why, other than disappointment with the reported results perhaps, the Australian Government should have sought to keep it out of the public domain.
It is of interest that CIE2014 makes no reference at all to CIE2006.
2. Differences in results as between CIE2006 and CIE2014
The basic structure of the two reports is the same. A model of the Norfolk Island economy is used to establish a ‘baseline’ which is the forecast future path for the economy in the absence of the changes of interest, given various assumptions about the external conditions affecting that economy. Then, the model is re-run after being modified to reflect the changes of interest, and with any necessary changes to the assumed external conditions. The ‘changes of interest’ are often referred to as the economic ‘shock’, and in the two CIE reports are referred to as ‘the reform scenario’, or ‘the extension of Commonwealth legislation’.
2.1 The 2006 report
The results relate to Commonwealth legislation being applied to Norfolk Island on 1 July 2007. Results are reported, in Chart 5.3, for: GDP, Household Consumption, Exports and Imports, Inflation, Capital Stock, Cost of Labour, and Employment. GDP refers to Gross Domestic Product, that is the total income earned by Norfolk Island residents. Results are shown annually out to 2016/17, as per cent differences from the ‘baseline’, which is what the model estimates would happen in the absence of the roll-out of Commonwealth legislation.
In 2007/08 GDP is some 4 per cent below baseline, by 2011/12 it is equal to baseline, and the graph continues upward until, in 2016/17, GDP is 9 per cent above its level in the baseline projection.
Consumption per household also drops initially, to some 4 per cent below baseline. It recovers to the baseline level in 2009/10, and in 2016/17 it is some 4 per cent above baseline.
Labour costs rise above baseline and by the end of the analysis period they are up by about 50 per cent over baseline. Because of the higher cost of labour, Employment drops below the baseline initially, but then recovers, and by 2016/17 it is 15 per cent above the baseline. For the other indicators shown in CIE2006 Chart 5.3, no information is given in CIE2014.
It is estimated that over 2007/08 to 2016/17 the Australian Government would need to provide financial assistance to Norfolk Island amounting to $286 million, $32 million per annum, in addition to the transfers required as a result of the extension of Commonwealth legislation to the island.
2.2 The 2014 report
The results relate to Commonwealth legislation being applied to Norfolk Island in 2016/17. They are reported in the Executive Summary, and in Chapter 5 in several tables. Whereas CIE2006 reports results for a single reform scenario, CIE2014 reports results for four scenarios:
S1: Core Reform – Income Tax, Welfare, Medicare
S2: Other Tax Related – Superannuation, Aus GST, Aus Tariffs, Aus Fuel Excise
S3: No Norfolk Island GST, Customs Duty, Fuel Excise
S4: Other Reforms – Minimum Wage, Government Business Enterprise Reform
Table 5.2 gives results for S1, S2 and S3, where those for S2 and S3 are ‘premised on the Core Reform set having been implemented’ (page 47). These results are ‘broadly additive’, i.e. the impact of all of these reforms applied together would be approximately the sum of the results reported for the separate scenarios. All these 2014 scenarios applied together, along with S4, would be a reform package very similar to that of CIE2006.
In CIE2014 what was referred to as GDP in CIE2006 is called GTP for Gross Territory Product. For S1+S2+S3 there is, adding the entries in Table 5.2, an immediate increase in GTP over baseline of 31.4 per cent. The size of the excess over baseline declines to 28.3 per cent in 2020/21 and remains at that level until the last year for which there is an estimate, 2023/24. The relative contributions of the three scenarios are almost constant over time. For 2023/24 the deviations from the baseline are:
The GTP impact of S4 is relatively minor - of the order of -0.3 per cent over the whole forecast period.
Estimates for Household Consumption are not given for all scenarios. For S1, the Core Reform Scenario, the immediate impact is up 39.8 per cent on baseline, declining to 37.9 per cent in 2019/20, and then remaining at that level until 2023/24 (Table 5.1).
Estimates for Labour Cost and Employment are not given for all scenarios. For S1, there is an immediate and sustained increase in ‘Nominal Wages’ to 21 per cent above baseline. There is an immediate increase in Employment of 8.2 per cent above baseline, which declines to 7.9 per cent in 2019/20, and then remains constant.
Table 5.3 in CIE2014 gives the estimates for the ‘Net financial impost of reforms on the Commonwealth’ for the years 2015/16 to 2023/24. The figures are for increases over the baseline, are net impacts reflecting the new balance of flows in both directions (to and from Norfolk Island), , and are estimates for the impact of S1, S2 and S3. Initially the increase is $6 million and this rises to $7.4 million in 2023/24. The total over the analysis period is approximately $58 million. These estimates do not include any infrastructure costs.
2.3 Comparison – are the differences significant?
Commenting on the problems with data for its modelling, CIE2006 says (page 9) that:
……in the CIE’s view the data issues are not significant enough to change a result from being positive to negative, from being small to large or vice versa. (italics in the original).
At page 12, CIE2014 says that:
…..the modelling results presented in later chapters should only be used to infer the outcome of extending mainland taxation and welfare systems etc to Norfolk Island (positive or negative) and the magnitude of such impacts (small or large). It would be inappropriate to, for example, report modelling results to the 2nd decimal point and claim that as the unambiguous impact of any taxation/welfare reforms. That is, only broad messages and trends should be taken from the modelling results.
These statements reflect the general view of proponents of the kind of modelling used in CIE2006 and CIE2014.
It would be reasonable to apply the same standards to differences between the outputs from two applications of the same modelling technique to the same shock to an economy. Are the two sets of results qualitatively the same, in the same direction of response, positive or negative? Are the two sets of results quantitatively the same, both ‘small’ or both ‘large’?
Comparing CIE2006 and CIE2014 results for GDP/GTP, Household Consumption and Employment, the direction of change from baseline is, leaving aside the initial downward movement in CIE2006, the same in both. However, the numbers are quite different. Consider Household Consumption, which might reasonably be regarded as the best single economic indicator of the impact of the reforms on the welfare of Norfolk Island inhabitants. Whereas CIE2006 has it up by 4 per cent on baseline by the end of the projection period, CIE2014 has it up by 38 per cent for just the Core Reform scenario, and the figure would presumably be higher for the four scenarios together.
Given the inherent limitations of this kind of modelling, I think a practitioner would regard the CIE2006 impacts as generally ‘small’, but the CIE2014 impacts as generally ‘large’. Certainly, the differences between the CIE2006 and the CIE2014 impacts would have to be considered ‘large’.
The question which then arises is whether the differences can be explained in terms of changed circumstances as between 2006 and 2014? If they can, a reader could have some confidence in the usefulness of the modelling exercises. If no such explanation can be provided, the reader could reasonably suspect that one or both modelling exercises were of limited usefulness.
As noted, CIE2014 makes no reference at all to CIE2006. Consequently, the consultancy is offering no explanation for the differences, and, hence, offering no explicit basis for the reader to decide how much confidence to attach to either or both sets of estimated impacts, even in terms of positive/negative and small/large.
In the next section I examine what can be inferred from the two CIE reports about the origins of the differences in the results that they report.
3. Explaining of the differences.
There are several possible explanations for the differences, which are not mutually exclusive.
3.1 Model structures
The models used in CIE2006 and CIE2014 are particular versions of a generic model called ORANI-G. This is what is known as a ‘computable general equilibrium model’. Such models are:
Computable – they can be solved for numerical values of the things, such as GDP, that the model has determined by the functioning of the economy;
General – they include all markets;
Equilibrium – they assume that all markets clear, that is that in each market supply and demand are brought into equality by price movements.
It is not obvious that the market clearing assumption is appropriate for the Norfolk Island economy. Markets work well when there are many buyers and many sellers, whereas for Norfolk Island it is necessarily the case that in many markets there are few actors.
There is an important feature of the generic ORANI-G that is not mentioned in either CIE2006 or CIE2014. It has more variables, things like GDP, to be solved for, than there are equations. This means that the ‘things’ cannot be solved for. To get a particular solvable ORANI-G model it is necessary to include extra relationships – this is called ‘closure’. For proper understanding of the results of a particular version of ORANI-G the reader needs to be told what closure is involved. Different closures provide different, sometimes very different, results from the same model. In neither CIE2006 nor CIE2014 is the closure discussed.
ORANI-G models comprise an input-output table describing numerically the structure of the economy in terms of flows of goods and services between producing sectors, equations describing money flows between government and sectors and households, and equations describing how households respond to changes in their incomes and the prices facing them. For a particular application of ORANI-G it is necessary to define the sectors and put numbers in the input-output table, and to give numerical values to the parameters of the equations.
CIE2006 and CIE2014 both state the sectoral composition that they use. They are different. Whereas the model in CIE2006 has 18 sectors, that in CIE2014 has 25.
In neither of the CIE reports are the equations used listed.
In CIE2006, in a footnote at page 6, a url address is given from which it is stated that the model it uses can be downloaded. Using that address produces a message that the page does not exist. CIE2104 only provides an address for the generic ORANI-G model.
1 A parameter is a constant in an equation. Thus in y = a +bx, a and b are the parameters, numerical values for which determine how the variable y changes with changes in variable x. For a = 0 and b =1, for example, y is always equal to x.
3.2 Model parameters and data
Given a model structure, in terms of sectors and equations, its use requires numbers for the entries in the input-output table, the values for the parameters of the equations, and the initial conditions. Clearly, for meaningful results all of these numbers should be those applicable to the economy for which results are sought. Ideally, the values for the parameters of the equations should be determined statistically from historical data for the economy being modelled.
Both CIE2006 and CIE2014 are explicit about the dearth of useful data for Norfolk Island, which has never had the data collection systems necessary to generate the kind of data that ORANI-G modelling requires. Both reports discuss examples where attempts to derive the necessary data from available information ran into contradictions, and how those contradictions were resolved. Interestingly, the set of contradiction problems described in CIE2006 is completely different from that described in CIE2014.
In neither CIE report is there any discussion of how the numerical values for the parameters of the equations used to describe household behaviour were obtained. It is a reasonable inference that both modelling applications followed what is standard practice when doing computable general equilibrium modelling of small economies with a dearth of actual local data from which to infer numerical parameter values – namely use numbers obtained for economies where the data does permit the necessary inference. Or, use a ‘plausible’ number that seems to produce ‘reasonable’ results.
Obviously this is problematic. In the cases of the CIE2006 and CIE2014 modelling it is clear, for example, that, given that the reforms involve the introduction of income tax and a minimum wage, the number used to describe the response of hours of work offered to changes in the going wage rate will be an important determinant of the model results. It is equally clear that it is questionable whether the number that describes that response in, say, Australia, is going to be the same as the number for Norfolk Island.
3.3 The starting situations
It is conceivable that the same ORANI-G particular model, in terms of input-output structure and numerical values for equation parameters, could produce different results for the same reform scenario when applied in 2006 and 2014. This could arise because of changes in the initial conditions in both Norfolk Island and externally, which affect the impact of the reform package on the Norfolk Island economy. Clearly, the model structures are not the same in CIE2006 and CIE2014, and there is no information on the numerical parameter values used in either. So, it cannot be concluded that the differences are solely due to changed initial conditions, and/or any differences in the reform scenarios.
Nonetheless, the question remains as to whether initial conditions were different in such manner as to provide something toward an explanation of the differences in model results. Given that CIE2014 does not acknowledge the existence of CIE2006, one cannot look there for an explicit answer to this question.
It does appear that the Norfolk Island economy may have shrunk between 2006 and 2014. CIE2014 estimates Norfolk Island GTP in 2013/14 as $68 million. CIE2006 does not report its estimate for GDP in 2005/06 (and does not produce any dollar figures for any variable for the baseline or for the impact of reform). CIE2014 reports, in Table 1.1 page 6, estimates by others as $80.3 million in 1995/96, $62.1 million in 2004/05, $89.5 and $82.0 million in 2009/10, $87.9 million in 2010/11. Using the last of these estimates, it states that its 2013/14 figure ‘suggests that economic activity has fallen by around 22 per cent since 2010-11’.
If, on this not very firm basis, it is accepted that the Norfolk Island economy shrank substantially as between 2006 and 2014, would such a contraction make the impact of the reform package substantially greater? All that can be said is that this is possible.
3.4 The baselines
It is impossible to compare the baselines established by the models in CIE2006 and CIE 2014. In CIE2006 the baseline is reported only in terms of per cent deviations from initial levels. In CIE2014 the baseline is not reported at all.
What is clear is that the two baselines are established from different assumptions about what would happen over the period of analysis in the absence of the extension of Commonwealth legislation to Norfolk Island. For example, there are big differences in what is assumed about infrastructure spending, and the financing of the Norfolk Island Government. Intuition suggests that these differences significantly impact on the two sets of baseline results.
In CIE2006 it is assumed that an Asset Management Plan, AMP, is introduced in 2006/07, with spending initially at $9.9 million per year, rising to $17.4 million in the final year. The Norfolk Sustainability Levy, NSL, was introduced in July 2006, in order to broaden the tax base for the Norfolk Island Government. It is a consumption tax, initially set at the rate of 1 per cent. In constructing its baseline, CIE2006 sets up its particular ORANI-G model so that it is used:
to determine the rate at which the NSL needs to be set so as to balance government expenditure…with government income. That is, revenue raised via the NSL meets any revenue shortfall. (page 15)
The model solution for the baseline has the NSL rate necessary to balance the government books rising from 7 per cent in 2006/07 to 12.3 per cent in 2016/17.
It is unclear what assumptions about infrastructure spending are used to establish the baseline in CIE2014. It is clear that it is not assumed that the NSL raises the money to cover any cash flow shortfall for the Norfolk Island Government:
…for the purpose of the baseline, it has been assumed that Australian funding moves to meet Norfolk Island budget deficits. (page 17)
There is some evidence supporting the intuition about the importance of infrastructure spending and financing in CIE2006. It reports the results of sensitivity analysis of the infrastructure assumptions. The baseline and the reform package impact are re-modelled for infrastructure spending at 75 per cent, 50 per cent and 25 per cent of the levels assumed in the original modelling exercise. The results for GDP and the NSL are shown in Chart 5.2. The NSL rate required to balance the Norfolk Island Government cash budget in the baseline drops with the level of spending. GDP also falls with the level of infrastructure spending – for 75 per cent the effect on the deviation from initial conditions is negligible, for 25 per cent the deviation is reduced from about 6 per cent to about 1 per cent. The results for the reform
package are more striking – for 75 per cent the impact drops from about 8 per cent over baseline to about 1 per cent over baseline, and for 25 per cent to 9 per cent below baseline. The comment in CIE2006 is:
This reflects the fact that under the alternative levels of AMP expenditure, the required rate of NSL is lower, and hence the gains from replacing the Norfolk Island tax regime with Australian taxes (and transfers etc) is not as great. Hence GDP is lower as the Australian taxes (net of transfers, subsidies etc) impose a net cost on the local economy.
3.5 Reform scenarios
In broad terms, the single reform package modelled in CIE2006 is qualitatively the same as the four scenarios together in CIE2014. There may be some numerical differences in, for example, the tax rates or the minimum wage level. It seems unlikely that these play a significant role in explaining differences between the two sets of results.
Both CIE2006 and CIE2014 are clear about the major role of tourism in the Norfolk Island economy.
The importance of tourism is illustrated in Chapter 6 of CIE2006 where the sensitivity of the modelling results to changes in the assumption about tourist numbers is considered. In the standard model run tourist numbers are held constant at 30,000 over the period covered. Chart 6.1 reports results for constant 35,000 and constant 28,000. For the baseline at the end of the period GDP is up by 44 per cent over the initial level for 35,000, and down by 20 per cent for 28,000. For the extension of Commonwealth legislation, the deviation from the baseline for GDP is plus 40 per cent for 35,000, and minus 8 per cent for 28,000.
It appears that there is a change between the model structure used to generate the estimates for the baseline and that used to estimate the impact of the reform package in CIE2006, which is not mentioned in the report. In discussing the baseline estimates, it is stated (page 11) that tourism numbers are held constant at 30,000, and that (page 12) tourist spend per day on the island is held constant at $215. There is no discussion of what is assumed about length of stay, or its determinants. However, when considering the impact of the reform package, there is (page 55) a discussion of the response of ‘tourist exports’ to the changes in Norfolk Island prices due to the opposing effects of replacing the NSL with Australian GST and the higher labour costs consequent on the reform package. Whereas it appears that tourism exports are a constant in generating the baseline, they are a variable for the calculation of the impact of the reforms.
CIE2014 does not report results for the impact on tourism of the extension of Commonwealth legislation to Norfolk Island.
Tourism is an area where the data problems attending this kind of modelling for an economy such as that of Norfolk Island are well illustrated. CIE2006 has (Table 2.4, page 11) spend per tourist at $1638, while CIE2014 has an estimated spend of $980 for each tourist arriving by air (air arrivals are in excess of 97 per cent of all tourist arrivals). Inflation over 2006 to 2014 would, other things equal, see the dollar number increase rather than decrease. In nominal terms the CIE2014 spend per tourist is 60 per cent of the CIE2006 spend. Such a large decrease is implausible. It is also noteworthy that CIE2006 has the average tourist spending $532 on accommodation and sustenance (‘Cafes etc’) and $823 on ‘Retail’.
3.7 Norfolk Island Government finances and Commonwealth support
In CIE2006 the impact of the reform package on the amount of Commonwealth support needed by Norfolk Island is approximately $32 million per year, while in CIE2014 it is approximately $7 million per year. It must be recalled that for both the figures given for necessary Commonwealth support are deviations from the baseline. It appears reasonably clear what is mainly driving the difference here between CIE2006 and CIE2014 in forecast levels of necessary Commonwealth support – assumptions about infrastructure spending and financing.
In CIE2006 the baseline has the NSL meeting the excess of Norfolk Island Government expenditure over receipts, so the baseline figure to which the $32 million relates is zero. With the extension of Commonwealth legislation to Norfolk Island the NSL drops out of the modelling, but the AMP remains. It is the AMP that drives the infrastructure costs which are, in the modelling, the main component of Norfolk Island Government expenditure.
In CIE2014 there is no NSL in the baseline, and the Australian Government is assumed to meet any Norfolk Island Government deficit. It is unclear exactly what is assumed about infrastructure spending in the modelling of the baseline and of the impact of the reform scenarios. The estimates of the required transfers from the Commonwealth to the Norfolk Island Government do not include an infrastructure component.
4. Concluding remarks
It is standard practice in ORANI-G applications to report the results for the economic shock being considered in terms of per cent deviations from the baseline. In the case of CIE2006 the baseline itself was reported in terms of per cent deviations from an initial position which is not clearly set out. In the case of CIE2014 there is no information about the baseline. This makes it more difficult to compare, and attempt to explain differences between, the results from the two modelling exercises.
The particular models used in CIE2006 and CIE2014 are different in structure, and numerically. In both cases the quality of the data used for the initial conditions and putting numbers into the structure is poor.
It is probably safe to say that all of the possible sources considered in section 3 above have some role in explaining the differences in the results presented in CIE2006 and CIE2014. It is impossible say much about their relative importance in regard to the forecasts for the main economic indicators, GDP/GTP and Household Consumption. It appears unlikely that differences in the reform scenarios were a major driver of the differences in these variables. A proper investigation of the roles of the possible explanations would be a major undertaking, requiring access to the data bases and the details and numbers for the particular models used, each of which would need to be run under a range of different assumptions. In regard to this, it is noteworthy that although the same consultancy wrote both reports using the same generic model, CIE2014 does not mention CIE2006 and, consequently, offers no analysis of the differences.
Given the poor quality of the Norfolk Island data available in both cases, and the questionable relevance of computable general equilibrium modelling for short and medium term forecasting of reactions to a major shock to a very small economy, my own view is that neither CIE2006 nor CIE2014 was a useful exercise. The substantially different results may be taken as support for that view. It is probably reasonable to conclude that, in terms of the economic indicators considered in these reports, extending Commonwealth legislation would be broadly, and on balance, beneficial to the Norfolk Island economy, to an extent impossible to quantify with any precision. However, it appears to me that one could have arrived at that conclusion by much simpler and much more transparent means. It should also be noted that there are possible economic impacts, such as on income and wealth inequality, that are not considered in these reports, as well as un-considered social impacts.
(1) Centre for International Economics, Economic Impact Assessment of Extending Commonwealth Legislation to Norfolk Island. Report prepared for the Department of Transport and Regional Services, CIE: Canberra & Sydney (October 2006). Document made publicly available in August 2015 and currently available for download at: http://www.norfolkonlinenews.com/).
(2) Centre for International Economics, Final Report: Economic Impact of Norfolk Island Reform Scenarios. Report prepared for the Department of Infrastructure and Regional Development, CIE: Canberra & Sydney (November 2014).
Professor Common will be pleased to respond to questions and comments on his report (firstname.lastname@example.org). More general issues may be addressed to Dr Chris Nobbs (email@example.com).
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5.NORFOLK ISLAND REFORM SCENARIOS - COMPARING THE TWO CIE REPORTS (2006 and 2014)
In 2006 the Centre for International Economics (CIE) of Canberra prepared a report for the Commonwealth Department of Transport and Regional Services entitled Economic Impact Assessment of Extending Commonwealth Legislation to Norfolk Island. As is well known, this report was not released by the Commonwealth at the time, and only became available publicly in August 2015 by decision of the Administrative Appeals Tribunal following a four-year-long campaign by Mr Brett Sanderson, opposed by the Commonwealth. According to court documents, the Department,together with the Department of Prime Minister and Cabinet, argued that release of the report would be contrary to the public interest.(1) In 2014 the CIE prepared a second report for the Department of Infrastructure and Regional Development, entitled Final Report: Economic Impact of Norfolk Island Reform Scenarios.
An independent academic expert has now been engaged to compare the contents of, and the differences between, the two reports, and to provide a short report on these matters in plain language.Michael Common is an English economist who spent ten years as a Senior Fellow at the Centre forResource and Environmental Studies (now the Fenner School of Environment and Society) at theAustralian National University in Canberra. He is also thoroughly familiar with the ORANI economicmodel used in the two CIE reports. Professor Common’s report is now to hand.(2) Despite the reportbeing in relatively plain language, it is technical in content, and it will be for experts in economics andeconomic modelling to further explore its conclusions. However the conclusions themselves are clear enough.
In his report, Common notes that the numbers generated by the two model applications (2006 and 2014) are quite different, and the report examines several possible factors that could contribute to this.He concludes that due to the lack of transparency as to the data entered into the model and how it has been treated, it is not possible to discriminate amongst possible causes for this discrepancy.
Furthermore, his judgement is that given the very small size of the Norfolk Island economy, the use of the type of economic model employed by CIE is invalid. Common considers that: “… neitherCIE2006 nor CIE2014 was a useful exercise. The substantially different results may be takenas support for that view.” The usefulness of the CIE 2014 report in particular is further undermined by the fact that it does not make clear what the baseline is against which the economic changes are assessed, nor what infrastructure spending will be made and by whom:issues critical to any coherent assessment of Norfolk Island’s future.
Common concludes: “It is probably reasonable to conclude that, in terms of the economic indicators considered in these reports [italics in the original] extending Commonwealth legislation would be broadly, and on balance, beneficial to the Norfolk Island economy, to an extent impossible to quantify with any precision. However, it appears to me that one couldhave arrived at that conclusion by much simpler and much more transparent means. It shouldalso be noted that there are possible economic impacts, such as on income and wealthinequality, that are not considered in these reports, as well as un-considered social impacts.”According to the evidence, it appears that the two CIE reports are - to use a non-technical term -baloney. Statements by the Minister promoting the CIE2014 report in terms of increasing GrossTerritory Product by around 14 per cent and household consumption by around 38 per cent cannot berelied upon.
And as it happens, there is word abroad of another report comparing the two CIE reports and which will be available shortly. It will be interesting to compare Professor Common’s conclusions with thoseyet to be seen. Next week we will consider the Norfolk Island Economic Development Strategy recently released, and about which some positive statements can be made.
- Chris Nobbs
(1) Belot, H., “Uncensored audit of Norfolk Island’s economy must be released, tribunal”, The Canberra Times, 11 June 2015.
(2) Common, M., A Comparison of Two CIE Reports (2006, 2014) on the Economic Impact of
Norfolk Island Reform Scenarios, 20/11/2015. Available for download from: http://www.norfolkonlinenews.com/
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4. HEALTH, PUBLIC HEALTH, AND CATCH-22
In Robert Heller’s famous novel, the main character Yossarian, a bomber pilot with the US Air Force in World War 2, wants to be furloughed out from flying combat missions on the grounds of his insanity, a reason recognised by the Air Force for such a course of action. However the Air Force also has made the determination that anyone pleading insanity must be sane, as he would have to be sane to make the claim. This is the famous “Catch-22” - which of course raises the question as to which of the two parties might be the more insane.
On Norfolk Island, it goes roughly like this. [Conversation between a Commonwealth government representative and a Norfolk Islander]:
CGR (showing genuine interest): We really want to help you on this and improve your health care services… you only need to apply.
NIer: Well, OK, I’ll fill out the application…
CGR (perusing the completed application): I’m really sorry, but you don’t meet the standard, so we’ll have to take away some of your health services.
Some time ago the Norfolk Island Hospital Enterprise (NIHE), with the intention of improving health care services on the island, approached the Australian Council of Healthcare Standards to carry out an accreditation audit on the hospital. This was done in March 2014. The hospital did not come up to scratch, and accreditation was not granted. Amongst many recommendations contained in the report the surveyor recommended, on the basis of infection risk, that all elective surgery - as distinct from emergency surgery - cease. A consequence has been that with the operating theatre closed, the visiting specialist programme has been severely reduced. Rather than take this as a signal to improve the hospital facilities, the Commonwealth chose to deny funding to NIHE to make the necessary improvements.
The initiative taken by Breast Screen Services Norfolk Island (BSSNI) has met a similar fate (as initially reported in TNI 7/11/2015). BSSNI emerged from a trust founded by Alice Buffett back in 1998, and operates wholly with volunteers. Over many years it has focussed on providing a breast screen machine for the island. In recent times, and in coordination with South East Sydney Local Health District (SESLHD), a suitable machine was located, and BSSNI undertook to pay for the location of the machine on Norfolk Island and the cost of a qualified radiographer and technician from SESLHD to operate it (say 1 week per year).
On 15 October 2014, in referring to BSSNI, the Administrator Gary Hardgrave said in an interview with Radio Norfolk (TNI 18/10/2014): “We have secured a breast screening equipment, we have a mammogram equipment which will arrive on the Island in coming months...... It is a great result and a great result for Norfolk.” The Administrator also indicated to BSSNI that the RAAF would deliver the machine to Norfolk. In the past year, BSSNI has been proceeding on this advice and continued fund-raising to ensure that the project reached fruition.
On 27 October 2015, at a meeting of Commonwealth, NSW and SESLHD officials with representatives of BSSNI on island, the DIRD representative informed BSSNI definitively that the breast screen machine would not be coming to Norfolk. Four reasons were given for this, all specious according to Norfolk Island sources. The final reason given was that the machine would not do the 3,000 mammograms required for accreditation. But hang on, wasn’t this a completely voluntary service set up between BSSNI and SESLHD and funded by Norfolk Island? Similar reasoning by the Commonwealth probably underlay the decision relating to hospital surgery in view of the possible implementation of an MPS - ‘Multi-Purpose Service’ - model of medical service provision on the island. It appears that Norfolk hospital and health services are at the mercy of some formula held deep in the catacombs of Canberra, as to what services Norfolk can have irrespective of local circumstance, consideration or interest.
The DIRD representative at that meeting went on to say that DIRD was investigating subsidising travel to Australia for breast screening. (Q: Is there genuine insanity here?) BSSNI has estimated the cost to a woman aged over 40 travelling to Sydney Monday and returning Friday (the only mid-week plane days), including travel costs, accommodation, loss of wages and insurance, at around $2,450. And a survey this year by BSSNI suggests that nearly one third of Norfolk Island women do not travel to Australia either for holidays or for any other reason.
We do not know how many of these bizarre situations will arise in coming months. (We may need to add Medevac to the list if it is not included within Medicare arrangements.) Furthermore the issue of the regulation of island services in relation to human health is not restricted to hospital matters. There are also important issues concerning possible regulation of the processing and storage of meat products, process and storage of dairy products, the production of poultry and eggs, and food transport vehicles, all of which may raise significant impediments - financial or otherwise - for life on Norfolk. It appears that Norfolk Island may have to fight for its life with one hand tied behind its back - or is that ‘with legs in irons’?
The matters we have discussed this week also draw attention to two others: the Commonwealth habit of rejecting local initiatives, and the question of the level of trust that can be placed in what the Commonwealth and its representatives say. It is hoped to discuss both of these in coming weeks. However next week we will introduce a comparison of the two CIE reports (of 2006 and 2014) on the Norfolk Island reform scenarios.
- Chris Nobbs
PS The report of a Commonwealth-commissioned consultancy on Norfolk Island health services, undertaken by KPMG, is expected shortly.
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3. PRICES ON NORFOLK ISLAND AFTER 1 JULY 2016
There seems to be an idea current on Norfolk Island that come 1 July 2016, prices of goods sold on the island will fall. This idea has been promoted by DIRD in its Fact Sheet (‘for individuals’) for March 2015 (updated to 13 May 2015) that said: “The cost of goods and services sold on the island may be cheaper as the Norfolk Island Goods and Services Tax (GST) will be abolished and the Australian GST will not apply” (p.1), and the sentiment is reiterated in the Administrator’s Reform Update for October 2015 which noted: “The Tax Office has advised the Australian GST will not be introduced to Norfolk Island” (p.6). Does that sound like a convincing case? Unfortunately it is not the whole story. First, let us recall the announcement from the Parliament of Australia on 30 March 2015 entitled “Norfolk Island: New Governance Arrangements” where it is stated: “Norfolk Islanders will not be subject to [Australian] GST immediately.”
Even without the imposition of Australian GST, the best Norfolk Island can hope for, in my view, is that prices will remain at roughly their present levels, but it is much more likely that prices will rise, possibly substantially. Here’s why.
With regard to the price of foodstuffs and home products, one of the current benefits enjoyed by Norfolk Island is that it is classified as an export destination for product pricing from Australian suppliers, rather than as a domestic destination. The price differential between export and domestic wholesale pricing on some items can be substantial. A price comparison for a representative basket of 22 goods by the Island’s major food importer has shown: for four goods (18% of the sample) the estimated domestic-sourced retail price was approximately the same as the export-sourced item; for nine goods (41%) the domestic-sourced item was up to 25 percent higher in price; for five goods (23%) the domestic-sourced item was up to 50 per cent higher; and for four goods (18%) domestic-sourced item price was even higher than that. If Norfolk becomes nominally part of Australia, and Australian suppliers decide to classify Norfolk as part of Australia and thus on their domestic register, the ‘export destination’ advantage will be lost. (This will not be the only loss as suppliers, in practice, despatch longest ‘use by’ dated stock to export destinations, and the shortest ‘use by’ dated stock to domestic destinations.)
Also in the foodstuffs line, importers clearly try to source items from the least expensive supplier, and often this is in New Zealand rather than Australia. With Norfolk Island part of the Australian tax and GST system, Australian companies may insist that all purchases be from the Australian based company or wholesale supplier, and preclude any purchases from their New Zealand subsidiaries. In fact this has already happened in recent times with one major multinational food company operating in both Australia and New Zealand. In the event that a New Zealand subsidiary markets products not usually available in Australia, companies may require these subsidiaries to provide the ordered items to the parent (Australian) company prior to shipment to Norfolk, thereby increasing transport and handling costs. (We may recall that all sea cargo to Norfolk Island from Australia comes via New Zealand - a major reason being that the larger size of Australian ships makes it inefficient to service Norfolk Island for small cargo volumes.)
A similar situation faces companies that import goods direct from suppliers in Europe, the US and elsewhere, where provision by direct ‘export’ to Norfolk Island may be replaced by provision from Australian agents - as has already been experienced on the island some years ago in relation to the distribution of photographic goods.
A major concern here is that with distribution companies growing larger and more international, and with their inexorable impulse to systematise their operations, such changes as outlined may be inevitable.
The DIRD Fact Sheet (‘answers to your questions’) of May 2015 states: “Law modelled on New South Wales law will be progressively applied to Norfolk Island from 1 July 2016”. The introduction of NSW employment laws into Norfolk Island will have a major impact on prices. This is not only a matter of businesses factoring in the minimum wage for employees, which currently can be more than 25 per cent below NSW award rates, but also: overtime and penalty rates, and requirements in relation to meal allowance; clothing, equipment and tools allowance; uniform and laundry; vehicle allowance; working late or early; first aid qualification allowance; performance of higher duties; holiday pay and sick pay; as well as employee superannuation (an increasing levy rising from one to nine per cent over time). And in addition importers will have to cover the cost increases in these things as they are suffered by the lighterage and transport businesses on the island. Quarantine inspection charges will also be introduced on a cost-recovery basis.
And then in addition there will be the consequences of compliance with NSW laws in relation to occupational health and safety (certification, training, protective equipment and so on) applicable to primary production, food handling and vehicle standards. And hidden behind the foregoing issues is the mountain of on-going paperwork involved in completing records, maintaining compliance, and preparing tax returns, which will add further costs to every business on the island.
As we do not currently know what the exact situation will be in the years ahead, these issues - of Australian GST, foodstuffs importation, NSW employment laws, and increased regulatory requirements - must be classed as ‘very serious overhangs’ on the price of goods retailed on Norfolk. There is one glimmer of light for the commercial sector however: after 1 July 2016 imported goods not for resale will not attract Norfolk Island customs duty. As such goods can include expensive capital equipment, this change can be significant for individual businesses. So do you still think that prices will fall after 1 July 2016? If I’ve missed something important I’d be happy to be told of it (firstname.lastname@example.org), take it on board, and if necessary eat humble pie. Next week we will look at some of the regulatory issues coming to the island, particularly as they relate to the hospital and health services.
- Chris Nobbs
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2. THE COMMONWEALTH’S MODEL AND NORFOLK ISLAND [AS SUBMITTED 05NV15]
The underlying model of the economy that the Commonwealth government brings to its consideration of Norfolk Island is what can be called a ‘free market’ or ‘neoliberal’ model. A core assumption of this model is that private enterprise is necessarily more efficient than government enterprise, and that consequently government functions should be reduced where possible, services privatised, taxes reduced, and social services strictly limited, and the market allowed to rule.
How do we know this is the underlying model in use for Norfolk Island? It suffuses much of the reportage provided in recent months by consultants to the Commonwealth, it underpins views promoted by NIAC in Discussion Paper 2 that we discussed last week (a paper without doubt drafted by the Commonwealth-provided secretariat), and recently Executive Director Peter Gesling has noted publicly his view that government “shouldn’t be involved in monopoly provision” (ATA meeting, 29/10/15). All this should not be surprising as the same model underpins the Australian government’s current approach to economics more generally. However the real question is whether it is in any way appropriate that such a model be imposed on small isolated island economies such as Norfolk’s. I argue here, and have argued elsewhere that, for several reasons, it is not.
The application of any economic model to an economy brings winners and losers. With regard to the Commonwealth model to be applied on Norfolk Island, there is one thing we can say with almost 100 per cent certainty: that the winners will be those with financial capital (including the owners of privatised monopoly enterprises), and the losers will be wage earners. We can be confident of this because rising income inequality has been the outcome in every country around the world in which this model has been applied. Is this really what Norfolk needs or wants? (We’ll come to the matter of economic growth in a minute.)
The Commonwealth’s NSW ‘regional council’ model also dictates winners and losers. Because council rates are calculated in relation to land value, substantial losers will be Norfolk Island families who are land rich but cash poor. For these families, the transfer of land through generations is fundamentally a symbol of continuity and identity with their homeland, notwithstanding the fact that land has also a monetary value that might be drawn on in times of need.
The Commonwealth has been loud in espousing a concern for Norfolk Island’s unique culture and heritage. What the Commonwealth seems never to comprehend is that island culture is not something that exists in a museum cabinet, but is lived experience, and that to remove the context in which it has flourished is to risk the dispersal and destruction of the culture itself.
In further considering the Commonwealth’s approach to Norfolk Island at this broad level, you might ask: ‘Well, Norfolk Island has been in the economic doldrums in recent years, so doesn’t it need some free market loosening up to get economic growth going again?’ Well, no. There have always been available alternative models of the economy, most of which take a broader view of what economics, government, and society are all about. The most prominent alternative is the ‘mixed economy’ model which underpinned the economic successes of the post-World War 2 decades up to the advent of the ‘free market’ revolution of the Thatcher/Reagan years, and which is far more appropriate to the needs of small island economies than this latter model. The economy of the Falkland Islands, a successful British overseas territory with a balanced budget, is an exemplar of this alternative approach. Furthermore, the available evidence does not support the case that a free market approach to the economy is necessarily more successful in promoting economic growth than is a mixed economy. In fact the weight of evidence supports the contrary view, namely that when a government is more active and supportive of its citizens, then the economy thrives better.
Next week we look at the more down-to-earth matter of prices on Norfolk Island after 1 July 2016.
- Chris Nobbs.
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1. NORFOLK ISLAND REGIONAL COUNCIL AND THE PROPOSED 'CORE PRINCIPLES'
In recent weeks I’ve attended a number of meetings on Norfolk concerned with the change process currently under way: both as an observer and as a participant. I’ve also had numerous one-on-one discussions with individuals. One thing that stands out in all these meetings is the scale of complaints about lack of information from the Commonwealth on the detail of the changes proposed, and lack of consultation, which for some businesses and individuals has made future planning well-nigh impossible. The substance and implications of the change process are urgent matters for the life and careers of many Norfolk Islanders.
Even so, some facts relating to the change are known or can be inferred, and together with experience overseas with similar processes, do enable us to start to see where the Commonwealth is heading, and what the effects of changes on the Island might be. Here and in the coming weeks I propose to explore these matters in the columns of TNI, both as a matter of record, and as a contribution to clarifying a very blurred situation. It should help to uncover the roots of what is being proposed and the likely outcomes at a general level. These articles will be distributed elsewhere and made available on the web.
In this first column I discuss the proposed “core principles” which according to the Norfolk Island Advisory Council (NIAC) Discussion Paper 2 “could guide the ultimate makeup of the Norfolk Island Regional Council’s (NIRC’s) responsibilities and in framing future strategic directions.” I have already provided some observations on these principles to NIAC as part of a written submission I made in relation to Discussion Paper 2. (If anyone is interested this should be available from the NIAC secretariat, or they may contact me.)
Here we focus on the final three proposed principles, which state:
“(6) The Council should avoid where possible, providing services which could be provided by the private sector. These services should be regularly market tested to ensure the community is receiving value for money.
(7) Where the Council does undertakes business activities, they should reflect the full cost of service, so as not to distort the market. The services should, in the case of critical utilities, be cost neutral.
(8) There should be transparency in revenue generation and a clear link to expenditure (for example, charges for waste management, would be spent on waste management/minimization activities).”
The first question that occurs is: Where is it proposed that these principles end up? Is it intended that they be, if adopted, legally enforceable directives to the NIRC, or merely statements which have some, but not over-riding, significance? This seems to be a very important point, but we are not told, nor asked our opinion.
The assumption is made in (6) that the NIRC should avoid providing services that could be provided by the private sector. Why so? Although we are not told, this reflects the belief by some economists that private provision of services is inevitably more ‘efficient’ than public provision of the same service. As a general proposition this is not true, as the near disastrous experience of the privatisation of New Zealand Rail and Air New Zealand show. And in Australia, according to a recent survey of electricity privatisation in Australian states by the Australian Energy Marketing Commission, the data show no clear link between electricity bills and privatisation. (1)
The proposition of ‘efficiency’ as promoted in economics depends on the existence of a ‘market’ in which there are many buyers and sellers, and such a thing exists for few services on small islands such as Norfolk. Indeed on Norfolk we are usually talking, inevitably, about the monopoly provision of services i.e. by a single provider, and this does not constitute an economic market. (Think of fuel importation, electricity provision, lighterage, the airport). In situations of monopoly, economic theory predicts the occurrence higher prices than ‘efficiency’ prices. This monopoly situation requires, first, that ‘efficiency’ pricing has to be estimated by a regulatory agency - which can be done equally whether the service is publicly provided or privately provided.
Second, private enterprises function to increase profit for their owners - large companies are legally required to do so - which means that monopoly providers of ‘public’ services are always difficult to control. In New Zealand for example, the energy regulator found it impossible to control the pricing behaviour by energy companies for many years, and disputes still surround the matter. How would an NIRC be expected to control the behaviour of a large overseas company providing a monopoly service on the island? Thirdly, experience from overseas indicates that it is the profitable public services that are usually privatised, while the unprofitable ones are retained in public ownership, thus depleting the public (represented by the NIRC) of revenue while increasing the burden of its costs. For a small island like Norfolk where revenue raising is a major issue, the better solution appears to be not privatisation but government ownership with oversight, or maybe joint public-private partnership.
Following on with this economic focus, the proposed principles (7) and (8) appear to want to put the NIRC into an economic straightjacket in which: any transgression from austere profit-seeking efficiency is unacceptable; which recognises no value except the market (however distorted that may be in reality); and which is incapable of independent or other activity on behalf of the community. But should the owners of cows on public land charge the NIRC for mowing their grass? Why should any profits from grass mowing be applied to more grass mowing? What is to happen if the community, in its community development strategy, wants its NIRC to undertake an activity whether it is profitable or not? (Perhaps setting up a co-operative, or maybe undertaking some other type of activity not yet envisaged?)
Do these proposed principles really reflect what the NIAC wants Norfolk to sign up to, without genuine discussion? Surely things on a small island should be more straightforward than this. Given a good community engagement strategy (principle 1) and public accountability (as in principle 8), it seems much more reasonable to sort these things out by community-based processes on the island (and all things considered, maybe more efficiently too).
Next week we will consider more broadly the economic model that underlies the Commonwealth’s approach to Norfolk Island’s future, and some of its implications.
- Chris Nobbs
(1) ABC News, “Fact Check: Does privatisation increase electricity bills?” 30/03/2015
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