It was not until World War II that any fundamental change in Norfolk’s economy took place and this change was wrought by the construction in the Island of an air strip on land acquired and owned by the Commonwealth Government Overnight, the difficulties of access and the isolation of Norfolk commenced to lessen and as the standard of both airport and aircraft improved so the ability of people to enter and leave the Island without excessive inconvenience increased. As this fact became known in Australia and New Zealand, along with greater knowledge of the Island’s well—recognised attractions, the number of visitors gradually built up and with this growth in numbers of tourists came a concomitant growth in all those services related to tourism. Hotel, apartment and guest house accommodation burgeoned, imports to supply low—duty shops rose steadily, numbers of road vehicles and road standards were lifted to meet increasing demands, and administration requirements and public services expanded to satisfy the developing needs of a growth industry and its satellite or support industries such as horticulture, fishing, souvenir production, meat and milk production.
Concurrently with the above changes, another less obvious but, nonetheless, equally basic change was occurring. As Norfolk’s tertiary industry of tourism grew, there also developed more efficient banking facilities and those services associated with the transmission of funds to and from the Island. Greater knowledge was disseminated of Norfolk’s peculiar tax status vis—a—vis Australia and by the early 1960s there had evolved in Norfolk Island those essential prerequisites for a twentieth— century tax haven, viz.
Norfolk Island lay ready to be exploited by the revenue avoider.
2.The present economy and the dominance of tourism
It is against the above background of subsistence agriculture and fishing, plus the failed attempts at commercial ventures into the export of primary industry products and the uncontrolled changes of the transitional period, that we now turn to the present. Up until 194721 when the tourist industry, with the aid of regular and reliable air transport, began to develop, the Island was virtually stumbling along in an economic sense, lurching from one minor primary industry boom/collapse to another. There was no stability nor firm base upon which to rest a balanced economy which could sustain this remote community in its genuine needs. The emergence and growth of tourism provided this stability.
By 1952, there were nine guest houses capable of accommodating 120 visitors to the Island and tourist arrivals had increased to 1500 in that year. For a whole decade, however, this was a maximum figure and it was not until the l960s that the tourist numbers began to increase perceptibly as the following table reveals:
YearAir passenger arrivals
In addition to those Island factors already mentioned, other factors external to the Island were also operating as stimuli to tourism in Norfolk Island. Affluence in Australia and New Zealand had increased in the post—war years and facilities for overseas travel had improved, both on the accommodation and transport sides. People possessed more money for travel, there were better facilities for comfort while travelling and there was the natural reaction to years of depression and war when such travel was a financial or physical impossibility. Norfolk Island became a small beneficiary of all these factors during the l96Os.
Clear recognition of these causal factors has a certain merit, for it enables one to realise that a downturn in tourism in Norfolk Island can result from a reversal of these factors, especially those impinging on the affluence of people in Australia and New Zealand. A diminution in that factor of affluence due to unemployment and falling incomes would undoubtedly bring a reduction by such people in spending on non—essentials, and Norfolk’s economy would be adversely affected in consequence. Such a reversal could, moreover, occur with startling rapidity. At the risk of repetition it cannot be over-emphasised that the very basis of Norfolk’s present economy is somewhat fragile and very vulnerable to forces which may tend to repel tourist spending.
Several indicators of the nature of the present economy are available.
First, the latest table22 of imports and exports is set out in the following five pages.
Commerce and Trade
1. Imports for year ended 30 June 1975 (listed in accordance with the Schedule to the Customs Ordinance 1913-1973)
The predominance of gifts, jewellery, household goods, personal effects and other returned articles in the figure for exports and the overwhelming imbalance in the trade figures in favour of imports are the most significant features. For the year ended 30 June 1975 imports totalled $6 172 174, while exports grossed $621 017. The huge gap between the two figures is largely taken up by tourist spending and this serves to highlight the fundamental role which tourism plays in the present economy. The actual figures of tourists for the year 1974-75 are given here under:
Tourists from Australia 10 685
From New Zealand 5 919
From Elsewhere 2 203
Total 18 807
This represented an increase of 1739 (10.2%) over the previous year in which 17 068 tourists visited the Island.
Second, an examination of the following public finance figures for l974-7523provides a broad picture of those aspects of the economy connected with the Island’s administration.
Revenue for year ended 30 June 1975
Australian Government grant
Crown lease rentals
Profit from liquor sales
Motor registration fees and licences
Court fees and fines
Agriculture inspections, pasturage and dog registration fees
Source: Commonwealth Bureau of Census and Statistics.
If one links the classifications within the above table of commerce, hotels and other accommodation, plus community and business services — all three of which are tied to varying degrees with tourism — one sees that approximately 49.53% of the workforce is engaged wholly or largely in the tourist industry.
A fourth significant statistic to which attention should be drawn when trying to assess the vital importance of tourism to the present economy of Norfolk Island is the correlation between growth of tourist numbers and the increase in public
Increase In Tourists
A significant component in the above figures, and one which bears a negligible relationship to tourism, is that in respect of company fees which, for instance, in 1974-75 contributed $197 961 of the total public revenue. In spite of discounting that company fee figure, the parallel growth over the years between tourism and revenue emphasises still further the fundamental importance of the tourist industry to the economy of Norfolk Island.
It has been indicated, however, that there are limits to the continued growth of this tourist industry. Evidence points to an upper limit of around 20 000 tourists per annum as being desirable if Norfolk’s ecological balances, way of life and uncrowded rural atmosphere are to be preserved. Concurrently with this upper limit on the growth of tourists, there will also be a distinct upper limit on the growth of public revenue, and both these facts require to be borne in mind in respect of future planning of expenditure in Norfolk Island. One is looking at an area to which the usual cliché of unlimited growth opportunities simply does not apply. There are clear limits to the growth of Norfolk Islands economy.
At present the growth of the tourist industry is intended to be effectively controlled through a system of licensing of beds in accommodation centres. At 30 June 1976 the total number of authorised beds was 998 spread over a range of variously priced accommodation, most of which is of good quality A further fifty—four beds have been approved but are not yet available.
In addition to controlling the numbers of beds for tourists, there is a clear need to control the licensing of beds in those boarding houses which are ostensibly used to accommodate itinerant workers in the Island but which may be open to tourists if not checked, so lessening the effectiveness of tourist controls.
A suggestion was made in evidence that the limit of 20 000 tourists per annum as recommended by Professor But land in his March 1974 report25 be varied should average length of stay in the Island decline from its present eleven days to a lower -figure. There is a clear trap here and this suggestion needs to be carefully considered.
One of the objects of limiting the numbers of tourists is to keep in reasonable check the wear on and compaction of the Island’s roads, paths, beach areas, cliff edges, historical sites and the like. Each tourist probably visits the main trails, roads and points of historic interest at least once per visit, be that visit of five days’ or eleven days’ duration. Any increase in the absolute numbers of tourists is inevitably destined to increase wear and tear on the Island’s environment and it is that point which Professor Butland stressed, viz. the degree of usage of the Island’s resources. Understandably, traders and accommodation proprietors want as many free—spending tourists per annum as can possibly be brought to the Island, but on the other hand the Island itself needs a firm limit placed on the pounding its environment is expected to suffer. In Professor Butland’s view that should not exceed 20 000 visitors in any one year. While the Commission agrees with Professor Butland’s approach it appreciates that one cannot be too dogmatic on such an upper limit. However no departure from such expert advice should be made unless very good reasons exist to justify the change.