Royal commission into matters relating to norfolk island

Aspects of the Island’s public finance

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5.Aspects of the Island’s public finance

Excluding the Commonwealth Government’s annual grant of $126 000 the major revenue items are those of customs duties, profits from liquor sales, vehicle registration fees, licence fees, company fees, stamp sales, revenue from lighterage, elect­ricity and telephone undertakings and forest products. On the expenditure side, activities related to administration, education, the maintenance of buildings and roads, health, subsistence allowances and the maintenance of law loom as the heaviest items.

The figure for customs duty reflects again the dominant feature of the Island’s economy, namely tourism. The Island imports a wide range of items for disposal to tourists at figures somewhat lower than mainland prices (because of lower duty charges) and it is undeniable that this feature of low—duty hopping in Norfolk forms part of the Island’s attraction for tourists. Public revenue does well out of such imports, but is always likely to be a matter of fine judgment as to how much duty can be levied on imports, without detracting from the lure of relatively low—priced goods being available in the Island. Excessive duty imposts could remove that lure and it isvery important that they not be imposed.

Liquor sales fall into much the same category. Very few visitors to Norfolk would fail to take away with them the ant maximum allowed in the way of liquor, which is significantly cheaper in the Island over a range of items than in the mainland. In addition, consumption of liquor in the Island by tourists and residents alike also contributes to public revenue. All liquor is sold in the first instance from the Government Bond Store and this activity provides a substantial profit.

The history of vehicle registrations in the Island over the last decade evidences a remarkable development which is shown in the following table:

June 1965 Cars, trucks utilities 388

Buses and tractors 14

Cycles, scooters, trailers 82

Administration vehicles 20


June 1970 Cars, trucks, utilities 844

Buses and tractors 54

Motor cycles, scooters and trailers 266

Administration vehicles 30


June 24th 1975 Cars, trucks and utilities 1297

Buses and tractors 49

Motor cycles, scooters and trailers 251

Administration vehicles 36


30 June 1976 figure (Total figure only) 1645

While yielding essential transport services and revenue to the public purse, one cannot help wondering whether this proliferation of vehicles should be allowed to continue. There are more vehicles in the Island than there are permanent residents and this proportion must be amongst the highest in the world, but it has a clear debit side. Roads must be maintained to higher standards, air pollution from exhausts is increased and disposal of useless vehicle components and oils is a problem in such a small Island; abandoned cars and trucks are an increasing and ugly spectacle littering parts of the Island. The import bill for fuels, oils and motor accessories is a heavy load. It was in fact the second highest item after building materials in 1974-75, namely $624,806. Some curb on the number of vehicles seems essential, along with other development planning controls.

Stamp sales constitute a very interesting and lucrative activity. From 1947 the Island has issued its own stamps featuring Island scenes, buildings, flora, fauna and aspects of its history and these stamps have found ready sales around the world. The revenue (most of which stems from sales abroad) yielded by this activity has increased remarkably over the last twenty years as is shown by the following table:

Norfolk Island Post Office

Postage stamp issues,

Revenue from sale of stamps

1955—56 £8,248 1966—67 $135,770

1956—57 £8,537 1967—68 $120,404

1957—58 £4,752 1968—69 $254,958

1958—59 £7,618 1969—70 $218,984

1959—60 £16,388 1970—71 $233,758

1960—61 £43,357 1971—72 $226,076

1961—62 £37,843 1972—73 8106,683

1962—63 £23,577 1973—74 $175,212

1963—64 £26,866 1974—75 $347,71327

1964—65 £26,806 1975—76 $297,139

1965—66 $172,233

Forest products and the Tanalith Plant (which impregnates timer with chemicals resistant to fungi and insects) together make up a significant industry, furnishing a variety of agriculture and building materials, chiefly from the indigenous pine and exotic eucalypt hardwood species grown in plantations in the Island. These activities partly satisfy an important need and, to the extent they are used, obviate having to buy high cost imports to meet Island requirements. Approximately two-thirds the Island’s timber needs have to be imported.

Turning to the main expenditure items, administration and education are the heaviest and second heaviest respectively and employed 141 people at 30 June 1976. Other large public activities essential to the Island which affect its economy, being major expenditure items, lie in the area of roads, health, post office and the maintenance of law and order. In the event of a local government authority taking over some Commonwealth assets in the Island, there will be a clear need for insurance cover to he be taken out on those assets. Such cover, if introduced, will his further increase expenditure by an appreciable figure.

Additional sources of revenue which have been introduced since the Commission completed its hearings are first a tax on absentee land—holders, which should encourage a greater proportion of local ownership of land in the Island, and second a visitor’s departure tax. These new taxes should raise significant sums for the Island.

The main source of revenue raised in the Island and the chief stimulant to economic activity generally will continue to be tourism — the only major industry in all of Norfolk’s chequered industrial history which has shown over many years a steady and consistent growth pattern.

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