DOORSTOP INTERVIEW
LPC23/2006 21 August 2006 Subject: Discussion on Norfolk Island Governance issues. Interviewee: Jim Lloyd, Federal Minister for Local Government, Territories and Roads JIM LLOYD: Thank you very much for being here this afternoon. I just wanted to make some comments in relation to the government to government meeting I've had with the Norfolk Island Government today. There were four ministers present. And the reason we had this meeting is that the Australian Government has made a Cabinet decision to reform the level of governance in Norfolk Island. We've been concerned for some time at the financial sustainability of Norfolk Island. It is very much an important part of Australia, as an external territory. And with the difficulties with tourism, which is their main form of income, over recent weeks and months, the economy of Norfolk Island is in a very difficult state. So today was a big step forward. Norfolk Island Government have put forward some ideas within the two models that have been proposed by the Australian Cabinet. The two models are a reformed territory parliament, along the lines of I guess, ACT or Northern Territory parliament, or a local government model, along the lines of the model that operates in the Christmas and Cocos Islands. So basically that's what the purpose of today's meeting was. REPORTER: Does Canberra see this as something of a win against a sometimes I guess... Norfolk was sometimes a little bit assertive in what they wanted. Do you see it as a win? JIM LLOYD: No, look it's very important that it's not a them and us. Norfolk Island has a unique history, very proud people, but it is part of Australia. That's been confirmed in many court decisions. And we have an obligation, the Australian Government and I have an obligation as a territories minister, to ensure that all parts of Australia receive the benefits of economic reform, and the benefits of a strong economy. That's not happening in Norfolk Island. So that's why we've taken these decisions. REPORTER: Would both systems see a tax reform of sorts for the Island? Would that mean, I guess there would also be a welfare system set up? JIM LLOYD: Yeah look, these are some of the questions that are being asked at the moment. There is no doubt that there would be tax reform in both systems. There is room for modification of the Australian laws. The Cabinet decision says that all Commonwealth law will apply to Norfolk Island, except where we deem it to be specifically exempted. So of course there would be tax reform and welfare reform; those sort of issues. And they're the issues that we need to discuss forward in the next few months. I'm very pleased that Norfolk Island Government has actually come to the table. For the last eight months we've had some concerns that they haven't really been interested in a new governance model. They've always wanted to put forward a third model, which is basically leave us as we are, but give us some money to help support the economy. Without the initial financial reform and governance reform, you're not addressing the serious fundamental issues. REPORTER: You mentioned the faltering economy and tourism. Is there any evidence to suggest that's from the publicity of the recent high profile murder trial? And is there any assistance on the way to help the island recover? JIM LLOYD: Look, the island has been hit with a number of negatives in relation to tourism. Tourism is obviously built on confidence. And you've had a series of incidents. Of course, the Janelle Patton murder was a negative for the island. Of course, then there was the unfortunate murder as well of their minister, Toon Buffett. You had the collapse of the Norfolk Jet. You've had a change in the type of tourism market around. So it's very competitive. And they certainly... all those incidents certainly have had an effect on Norfolk Island tourism. We're... the Australian Government is assisting with the costs of the trial within the Janelle Patton murder. And we are looking at ways in which we can assist their tourism as well. This is all part of the governance reforms. REPORTER: So what, is there a money amount that you're looking at? Or what's the government looking at? JIM LLOYD: Look, currently the Commonwealth Grants Commission is on the island. They've done some surveys. Looking at the relationship of the amount of money that Norfolk Island can generate, and the amount of money it would take the Australian government to provide the goods and services. I mean, we provide some $66 million a year for Cocos and Christmas Island. And we wouldn't anticipate that it would be anything to that size. But... because Norfolk Island actually does generate very significant income themselves. REPORTER: You mentioned welfare and taxation as two areas the government is keen to reform. Are there any other areas where the government would like to see some reform? JIM LLOYD: Look, Norfolk Island has done very well since the Norfolk Island Act was introduced, to actually be able to provide a basic level of services. But I certainly would like to see improved health services, and particularly in the area of aged care. It's not for lack of trying. And it's not for lack of caring, or the competency of the people involved. But certainly the infrastructure and the facilities... particularly their aged care facilities which is attached to the hospital, certainly would not meet the Australian standards. And their hospital is quite an old building. So I'd certainly like to see an injection of funds in that area. REPORTER: In terms of the personal income tax system, are they likely to adopt the Australian model? Or would they actually have their own sort of unique scales and systems? JIM LLOYD: Well there is room for a different model. It doesn't automatically have to be the full Australian tax system. By example, Cocos and Christmas Island do not have GST. They're GST exempt, as part of the taxation reform. So there's a lot of work being done within different departments in relation to that. Should Norfolk Island come into the GST system, that would be quite complex, because you need the agreement of the states and territories for a change in that. So there is an opportunity for a tax system that would obviously be part of the Australian tax system, but particularly modified for Norfolk Island. But it's difficult for me to speculate, because there's still a lot of work to be done. REPORTER: What about planning powers? Obviously the ACT works fairly closely with the NCA. Is there any proposal for something similar to that to be set up for Norfolk, in terms of where the planning powers for the Island might be best? JIM LLOYD: Look, I'd envisage that those sort of powers would stay with the Norfolk Island Government. Again, concerns have been raised by the people in Norfolk Island saying, look, we'd lose our identity, or the island could be overrun by people. But using the planning powers, which most local governments have, most state governments have, certainly could restrict the number of people that are living on Norfolk Island, the same as is restricted on Lord Howe Island. So I would envisage that those sort of powers would stay with their governance. REPORTER: It sounds like today was a breakthrough in terms of cooperation. But there's obviously still a lot of issues to work through. When would you expect a resolution? When will we see what's going to be up and running at Norfolk? JIM LLOYD: Today was a breakthrough. It really was. We've worked very hard. There's been goodwill on both sides, but it has been very difficult. And I understand that, because to change their level of governance, people are concerned about that. We hope that by the end of 2006, early 2007... I mean you should not underestimate the urgency of this. The Norfolk Island Government and their financial position is quite serious. And the Australian Government would not have acted otherwise. So we do need to keep pushing forward fairly quickly. REPORTER: Is this essentially a realisation by the Norfolk Islanders that the taxation base just didn't exist for them to do what they wanted to continue to do? JIM LLOYD: Today was a bit step forward for them. I mean obviously when they're talking to their domestic constituents this is not the most popular decision of course. So it's a big step forward for them to step up to the mark today, to start talking about a preferred model. And that, to me, is good news. It is a recognition that their taxation base really is not providing enough income for providing their goods and services. They've tried. They've introduced an NSL, a sustainable levy, on 1 August, for one per cent. But they're still unsure of the impact of that. They're looking at increasing their Customs duty. But to my mind, I feel that they're basically stopgap measures, and we really do need to have that fundamental change. REPORTER: Is there any model you have in mind internationally, that you'd like to see Norfolk Island follow? JIM LLOYD: Look, there are two models put forward, as I said; a local government model and a territory model. I'm not putting forward a preference for one or the other. The model that was put on the table by the Norfolk Island Government today was basically a similar territory model to the ACT or Northern Territory. But there is an opportunity to model something unique for Norfolk Island as well. So we just need to work through those issues. I'm not looking at some sort of international example. I'm really looking at more the examples within Australia, and Cocos and Christmas as a local government model example. REPORTER: So their preference at this stage is the territory example? JIM LLOYD: Yes, it is. And again, it's a breakthrough, because it's the first time that they've even nominated a preference of a model. REPORTER: So they've effectively abandoned the idea of just kicking along as it is? JIM LLOYD: They've certainly come to the table and talked about the governance model, and that's a huge step forward. Up until today, I would have said they've still kept the hope alive, that they could, you know, maintain what they have here. I mean these decisions basically have bipartisan support from the Opposition within the Australian Parliament as well. I mean they may have some differing views at the edges, but generally they're supportive. The only criticism I've seen from the Opposition, is that we didn't act quickly enough. All right? Okay, thanks very much.
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