Royal commission into matters relating to norfolk island

Possibilities and problems in the development of other industries

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3.Possibilities and problems in the development of other industries

As mentioned earlier the two basic factors of high inward and outward freight costs and the absence of developed refrigerated storage facilities for commodity products in the Island will always operate to the advantage of Norfolk in respect of agricultural trade.

Possible industries looked at to overcome these problems such as the simple assembly of high—priced items possessing low unit cost freight components (for example spectacle frames) appear superficially attractive but when weighed against the obvious advantages of mainland mass production plants such possibilities assume their true form of idle dreams Likewise the idea of a gem cutting centre would be unlikely to succeed because of the difficulties in attracting from already established centres the specialised technical skills required The Island does however have obvious potential as the producer of any high security agricultural products which may be needed as the raw material for high-priced but low unit freight cost items such as drugs and other pharmaceutical products and more especially those not requiring large and expensive refrigerated storage facilities in the Island The freight component in the final price of such products would be marginal and the advantages of growing such crops in an isolated Island with high security are obvious There would also be a benefit in developing any secondary industry necessary to process such materials in the Island itself and thus help to diversify the economy to that extent.

A few years ago attempts were made to locate an Australian Government high security animal quarantine station in the Island but a referendum in November 1972 quashed the plan in spite of the Norfolk Island Council’s near unanimous support (one member opposed the plan). It appears that there are doubts concerning the accuracy of some of the arguments advanced during the campaign, and also in so far as entitlement to vote was concerned. In addition, a number of people in the Island appear to have now swung around to favour the plan in the light of greater knowledge about its advantages and the lessening of their fears concerning possible hazards flowing from such a station. Whether the subject should be reactivated is a question for the local governing body to decide and is not a matter on which this Commission is called upon to make a recommendation.

The absence of an Island harbour which could enable ocean going vessels to tie in to a safe wharf has frequently been referred to as a major liability in the development of the Island’s economy. However, while the natural presence of such a safe anchorage in the Island would undoubtedly be an asset, the real need of such a harbour in so far as the economy is concerned is questionable. The skill of the teams engaging in lighterage operations is such that costs of this form of cargo handling are actually less than the current rates per tonne of normal cargo handling at one of the world’s bigger and safer harbours, namely Sydney. The existence on Norfolk Island’s coast of a harbour for ocean—going vessels would also attract passenger liners and other ships and would bring serious problems to the Island, straining its natural resources, its tourist industry, its victualling powers, its present ecological balances and, in particular, its freedom from serious diseases.

Norfolk’s relative difficulty of access is, in a real sense, a protection to Norfolk. To construct a harbour for ocean—going vessels would be a most expensive exercise, the amortisation of which would become a further burden on top of the already high freight charges to and from the Island. While Norfolk can maintain the superb seamanship of the lighterage crews, it does not require such a harbour to be built. In the unlikely event of the Island assuming a defence significance of any magnitude, then this may place a different complexion on the subject, but in so far as its economy is concerned, the Island cannot be truly said to be handicapped by the absence of harbour and wharfage facilities for ocean—going vessels.

When one considers the development of facilities for small boats such as may provide the basis for a commercial fishing industry, one is faced with a different proposition. Norfolk is surrounded by some of the best fishing grounds in the world, and while the present freight and refrigeration disabilities handicap the development of a large-scale fishing industry based in Norfolk and supplying say Australia and New Zealand, these fishing grounds do provide the prospect, if minor harbour facilities were provided, of a steady supply of fish food for the local market and a limited supply for export. In addition, they would be a definite tourist lure for lovers of big game and other fishing. The greatest bar to the establishment of a small commercial fishing operation in Norfolk is the absence of a small boat harbour giving ready access to the ocean in most weathers and eliminating the necessity of moving fair—sized craft to and from the water by cranes. With present facilities, fishing opportunities are severely restricted and the supply of fish to the Island is, in consequence, irregular and unreliable. The construction of a relatively inexpensive small boat harbour does deserve serious consideration by the administering authorities. If feasible, its development would further expand the Island’s basic resources.

While considering aspects of Norfolk’s primary industries based on the sea, it is appropriate to refer again briefly to whaling, once a sizeable industry in the Island. There seems no real chance of re-establishing a whaling industry based in Norfolk. Not only are whale catches now severely restricted but the economics of that industry are such that large—scale operations are imperative to its commercial viability and its methods demand mobile fleets centered around highly specialised mother factory ships providing direct access to mass markets of the raw materials yielded. Further it would appear that the migration routes of whales have changed, and no longer do large numbers of whales pass close to Norfolk Island. Whaling from Norfolk, and even provendering whaling vessels from Norfolk, must be reckoned as a colourful feature of the past, likely never to return.

The possibilities of the Island developing an airline or registering ships as an independent nation for purposes of raising revenue were mentioned in evidence, but major technical and administrative difficulties would render both possibilities undesirable and probably impracticable; apart from these aspects, independent nationhood would first have to be conceded to the Island.

In any consideration of the Island’s economy, the cost of living deserves mention. With respect to foodstuffs, while some items are dearer in Australia than in Norfolk Island, the opposite is true in relation to others. However, other items which are related to the cost of living, e.g. clothing, footwear, durable consumer goods, rent and land prices, all have a significantly lower price level than in the mainland, and there are no land rates. Wages in the Island are generally about 90% of mainland unities rates. Hence, although some food items are undeniably higher is, than in the mainland, the absence of taxation, the somewhat lower wage level and the lower levels of import duties (especially on clothing, footwear and durables) combine to arrive at a cost of living which overall is less than in the mainland.

In considering the Island’s economy, one must make reference to two further limiting factors, viz, supplies of fresh water and sources of power.

  1. Water - as can be readily understood, these supplies on such but a small Island are not boundless. The annual rainfall of some 1346 mm (53”) is the source of supply to household tanks and subterranean lenses which are tapped by bores. The latter could, through undisciplined usages or bad sewerage practices, become polluted or diluted by ingress of seawater. The soil structure prevents any large—scale surface storage of water in the Island and occasional dry periods cause tank storages to drop significantly. While the Island has never suffered a crisis in supply of fresh water, it, nonetheless, has limits to the volume it can provide on an assured basis. It could not sustain industries requiring large volumes of fresh water for either steam or other processing requirements nor could it provide the needs of a population running into several thousands.
  2. Power – Apart altogether from the heavy disabilities of it high freight charges and the absence of adequate bulk refrigeration facilities and a limited water supply a major disadvantage, in so far as establishing any significant industry in the Island is concerned, is the absence of any natural source of power. The Island lacks any fossil fuels by way of coal or oil, it has no hydroelectric potential and harnessing of its winds or tides is not yet a practical possibility. Large quantities of cooling water for condensers used in the generation of electricity would a only be available from the sea. In our present state of knowledge, the Island can be said to be virtually devoid of power resources and this is a serious disability in any consideration of its industrial potential. Power at present comes from imported petroleum products. The generating sources have been primarily installed to service the requirements of the airport; satisfaction of some of the needs of domestic requirements, commercial interests and the Administration has followed. Restrictions still apply upon the use of electricity for certain domestic appliances. For instance, approval is required before the following appliances can be used or connected:

Electric motors for pumps or machines;

water heaters;

washing machines fitted with water heaters;

electric clothes dryers;

dishwashers sports area lighting;

domestic appliances rated at higher than 2 kw.

Appliances that cannot be approved, except for limited Commercial use or in exceptional circumstances, are radiators and cooking ranges or ovens. The near total absence of street lighting is not due to insufficient power resources but the result of a deliberate social choice.

To improve this situation or to cater for any large—sized secondary industry or major defence base would require much more powerful generators. The importation of the necessary capital equipment and fuels to do this would be a heavy cost item.

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