Royal commission into matters relating to norfolk island


Conclusions and recommendations

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2.Conclusions and recommendations


The witnesses concerned with these areas presented, once again, much the same pattern of evidence as emerged from other areas, viz, a whole gamut of opinions of wide—ranging extremes. It was possible, however, to conclude that the adoption of some of the suggestions would result in necessary improvements for the Island and would be broadly acceptable to the Island itself and to the administering authorities in Australia. In particular, most of the suggestions advanced by the witnesses from the Australian Department of Health and from the New South Wales Red Cross Blood Transfusion Service appeared both necessary and constructive and those supported by this Commission are set out in Addenda A and B respectively at the end of this chapter. Most of the Red Cross recommendations have been adopted since the hearing closed.

With regard to areas other than the two just mentioned, it is proposed to treat these by first stating this Commission’s recommendations The Commission will later discuss the related aspects of how all measures recommended should be financed, why the Commission chooses a particular approach and certain matter which must flow from the recommendations if adopted.

It is necessary before proceeding further to restate that the recent decision in the Berwick Case removes any doubt that Norfolk Island is part of Australia From that fact it clearly follows that residents of Norfolk Island should prima facie be entitled as of right to the same benefits from the Commonwealth Government as other Australian residents receive Thus the Commission recommends that all social security all pension and all medical hospital and other health benefits dispensed by the Commonwealth Government be extended to residents of Norfolk Island

The Commission recommends that the present ~ 1932-­1964 be amended to accord with current certification practice in the Australian Capital Territory and that the Ordinance 1956-1964 be brought up to date.

As a matter of some urgency the Commission recommends that advantage be taken in the Island of the opportunity to receive Commonwealth assistance under the Aged Persons Homes Act l954—l974 for the purpose of constructing a home for elderly citizens.

Similarly, with respect to education it is recommended that the onus be on the Commonwealth Government to ensure that the educational facilities available in Norfolk Island are of the same standard as those obtaining in mainland Territories However in recommending that this approach be adopted it is the Commission further view that Norfolk Island is sufficiently isolated to justify the retention of as large a measure of local control in the field of Island education as is possible and that the present close and developed association with the New South Wales Department of Education be allowed to continue The Commission thus recommends that the Australian Department of Education ensure that supplies of funds and equipment (including buildings) to tile Norfolk Island educational system equal in every respect those of mainland Territories, and that the present Norfolk Island South Wales association on the teaching and curriculum side be allowed to continue as long as both parties involved consent to such an association. The reasons for advocating this dichotomous approach are that some Island children who wish to pursue their studies in the mainland in any field pass into the New South Wales system do so and there is merit in fostering this affinity; also there has been undoubted success in the examination standards achieved by the children at the Norfolk Island school under teachers from New South Wales. In the last four years, all candidates presented for the New South Wales School Certificate examination were successful.

In so far as workers compensation is concerned, the Commission recommends that Commonwealth legislation in this area be extended immediately to include Norfolk Island, thus making it mandatory for all employers to take out sufficient insurance cover on their employees in order to provide the same compensation benefits as those which are afforded employees in mainland Territories. Likewise, where it is apparent that failure to date by Australia to extend I.L.O. Conventions to Norfolk Island has resulted in disadvantaging workers in the Island, the Commission recommends that such Conventions be made applicable to the Island immediately.

Island wage rates and other working conditions are matters for determination upon the Island itself and nothing in the evidence brought before the Commission on this subject calls for comment.

Turning now to the aspect of financing the social security and other benefits mentioned above, it is the Commission’s firm view that receipt of these benefits must carry with it a reciprocal obligation to contribute toward the cost incurred by the Common­wealth, by payment of the same taxes and other imposts as are paid by other Australians in comparable circumstances. It is recommended accordingly.

The Commission has not been impressed by either the reason advanced in evidence which urged that different attitudes to the above be adopted or by the motives of some of the protagonists of such attitudes There is no justification for Australia to regard Norfolk Island as an underdeveloped or disadvantaged par of Australia to which largesse should be directed with nothing being expected in return.

It is obvious that there are residents of Norfolk Island who are conducting successful enterprises there and who can afford to contribute to the cost Australia will bear in making proper provision for the Island’s less fortunate citizens.

Although the Commission has been unable to measure precisely the capacity of the Island to pay for the benefits it will receive, there is no doubt in the Commission’s mind that Norfolk Island will receive far more from the mainland of Australia than it will ever return to the Commonwealth coffers In pointing this out one should also point out that other regions of Australia are in exactly the same situation of being net beneficiaries of the Commonwealth Treasury though probably not to the same high degree The Government’s obligation to care for its relatively less well—endowed areas is one which is widely adopted throughout civilised nations and there is nothing exceptional in principle in Australia looking after Norfolk Island in this fashion if it deems the cost to be justified Nonetheless it is proper that the point should be made in any discussion of the subject for mainland Australia will be the financial loser in its relationship with Norfolk Island, Mainland Australia will certainly make nothing out of Norfolk Island.

It is necessary also in this connection to distinguish Norfolk Island from the other external Territories of Australia viz Cocos (Keeling) Islands and Christmas Island These Indian Ocean Islands are markedly different in many ways from Norfolk Island Cocos (Keeling) Islands could certainly not be said to be at the same stage of development as Norfolk Island and its political, social and economic situation is not remotely comparable with Norfolk Island. Similarly, Christmas Island, very different again from Cocos (Keeling) Islands, has marked dissimilarities from Norfolk Island, being predominantly an Island which has been occupied for the sole purpose of extracting phosphate rock, and its future, once the rock supplies are exhausted, must be regarded as very unclear. Justification exists for special treatment to be applied to both these Indian Ocean localities, but the Commission can see no justification whatever to single out Norfolk Island for extraordinary tax concessions, the more so as it is unquestionably to be a net beneficiary of tax revenue.

Another aspect deserves mention, viz, the argument that Island residents could finance their social security and related needs by paying taxation to their own Island Administration which would then operate an Island social service scheme, Quite apart from the obvious anomaly which such a system would create by establishing two very different social service schemes for Australian residents, two other serious complications would emerge. First, such a plan would presuppose Norfolk Islanders paying into two taxation systems — to an Island system to finance social welfare in the Island and to a federal system in order to make their just contribution to all the other needs and over­heads of government administration in their nation, such as defence, foreign affairs, the public service, the judiciary, the banking structure, the currency, the education system, etc, Such a split taxation system would be an administrative nightmare and would pose endless problems including assessment of fair apportionments. Second, permission to establish such a separate taxing scheme in respect of social services would have the effect of creating a precedent and pressure for the device to be extended to cover areas in Norfolk Island other than social services could be brought. The precedent could also be used legitimately in attempts by other parts of Australia to sever sections of taxing powers.

It needs also to be pointed out that in recommending that Norfolk Island be brought into the Commonwealth taxation system in order for the Island to contribute toward its federal benefits one is at the same time recommending in Chapter 17 that the Island be freed from considerable burdens which it now carries and finances from local sources If the recommendations are accepted the Island administration (whatever the form it finally assumes) will no longer be paying out the special allowances of up to $10 per week nor will it be carrying the hospital and other costs of the geriatric cases ($18,000 per year per patient for hospital costs alone) nor the costs of the educational system in the Island and some judicial costs It is envisaged that these and other net savings to the local administration will be available to them to be spent on other Island needs for example an efficient municipal incinerator better roads improved town planning and development better wharves and wharfside facilities larger electricity generators the fencing of those areas to be protected from grazing and a number of other local desirable needs including the ever—increasing maintenance costs of many services.

It is important to stress that in advancing these recommend­ations the Commission has borne in mind the need to consider all facets of taxation and ~public finance in conjunction To postulate the introduction of Federal taxation and benefits without at the same time giving thought to associated matters would be to tackle only half the problem and it is now desired to turn to those associated matters

If the Commission’s recommendations in this area are adopted attention must also be given to the finance needs of the Territory local government and here it is proposed that these be provided in the same manner as has been done in the past m e that in lieu of introducing a system of property rating such as is adopted by most local governments to finance their activities on that level, Norfolk Island continue to be free to raise money from its traditional sources for its domestic needs, viz, by stamp sales, liquor sales customs duties and the like all these activities are colourful characteristics of the Island and constitute an important part of its tourist appeal and hence the health of its economy. Thus, the Commission recommends tat the Territorial government of Norfolk Island be empowered to takeover from the present Administration those revenue—raising sources and activities which yield the Administration its current income. This subject is discussed further in Chapter 17.

The actual area of such responsibilities will also be treated later in the Report but at this stage it can be said that the Commission envisages a Territorial government in Norfolk Island carrying out much the same functions as the Administrator has performed with the advice of the Norfolk Island Council in the past. As with a municipal government, the Norfolk Island Territory government should also be eligible to receive additional moneys via the Commonwealth Grants Commission over and above the sums it raises within its own area provided that it can justify such grants being made. It is this Commission s view that wherever possible the governmental and public finance structure pertaining to Norfolk Island should recognise the need to maintain those peculiar features of the Island which lie so close to the very heart of its economic viability — tourism.

Having said all the above, it is desired to point out further that although Norfolk Island is a part of Australia, no one can deny that it is a very isolated and very remote part and that its citizens do suffer certain disadvantages when one compares life in the Island with life in many mainland area’s For instance, there is separation from expert medical and higher educational centres; there is no reticulated water supply nor an electricity supply sufficient to meet all demands, there are no television facilities, no satisfactory ports, and travel to and from the mainland is expensive yet often essential. The Commission, in recognising these aspects of life in Norfolk Island and in regarding them as not dissimilar to aspects of life in some other areas of Australia, points out that similar taxation treatment will be accorded Norfolk Island citizens as is given to those mainland Australians who are similarly situated, viz, that the remote zone income tax concession will have application to residents of the Island.

Finally, since the Commission’s recommendations include taxation of Island residents, it is appropriate to draw attention to the need for citizens of Norfolk Island to be given representing in the Commonwealth Parliament just as residents in mainland Territories are represented. Norfolk Island residents are entitled to such representation and the need for this to be introduced will be even stronger should this Report’s recommendations on taxation be adopted. It has long been an accepted principle in civilised societies that there be no taxation without representation.

Considering means open to achieve this representation, several alternatives are available but some rule themselves out almost immediately For instance it would be Gilbertian to contemplate the Commonwealth granting Norfolk Island the status of a new State Due regard must be had to the population of the Island viz about 1600 and such a small number effectively rules out any degree of representation equivalent to that of a State.

The Commission also dislikes the concept of attaching Norfolk Island to an electorate within an Australian State chiefly because Norfolk Island (unlike Lord Howe Island) is not and probably never will be part of a State in the mainland of Australia The Island is a Commonwealth Territory not a State territory and it is appropriate that it be accorded the same representation as residents in mainland Commonwealth Territories Moreover attachment of Norfolk Island to an electorate within a State would immediately attach one representative and ten senators to the Island It is possible to have too much of a good thing and one should strive to bring a sense of proportion to this problem.

A helpful analogy may be seen in the case of Jervis Bay (another small Commonwealth Territory) which constitutes part of the electorate of Fraser the larger of the two electorates within the Australian Capital Territory Jervis Bay has a population which is estimated to reach approximately 800 by December 1976 and the Commission feels that it would be proper to include Norfolk Island in the other (smaller) electorate within the Australian Capital Territory viz Canberra Norfolk Island representation in the Commonwealth Parliament would then consist of one member of the House of Representatives for the electorate of Canberra and two senators who at present represent the Australian Capital Territory in the Senate In addition the Island would continue to have Ministerial representation in the Commonwealth Parliament because the Minister for Administrative Services is responsible for the administration of Norfolk Island The Commission therefore recommends that Norfolk Island be made part of the electorate of Canberra in the Australian Capital Territory for electoral purposes

To assist residents of the Island to gauge the effect upon them of the introduction of social service benefits income tax and death duties, details of their main features and appropriate examples are set out in Addenda C, D and E respectively.

To highlight just one facet of the benefits likely to flow to the Island if these recommendations are adopted the Commission points out that assuming there are 200 two-children families in the Island covered by the provisions of the Social Services Act 1947-1976 which relate to child endowment the mothers of those children will receive approximately $88,400 annually in respect of child endowment alone.


Addendum A
Recommendations from Australian Department of Health

(Training of Health Personnel)



  1. It is recommended that persons with suitable potential for health personnel should have access on a scholarship basis to courses provided by recognised institutions in the Australian mainland and elsewhere.

  2. It is recommended that the hospital board should determine what appropriate •steps are required in undertaking any new or major renovatory work so as to ensure that there is no interruption to the essential services provided by the hospital - ­for example with minor modifications temporary facilities within the maternity block could be provided by use of the delivery room as a temporary operating theatre to allow renovation and construction work in the theatre complex to be carried out

The possibility of constructing a separate building adjacent to the front •of the hospital which could accommodate the outpatients’ department has been canvassed informally with some members of the hospital board This would include the pharmacy., the doctor’s consulting room, a treatment roc and the dentist’s surgery, together with a work—room and office. Such a proposal would alleviate the present problem associated with the patient flow patterns within the existing outpatients x-ray and operating theatre areas and is there fore commended

  1. It is recommended that live-in quarters be not provided at the hospital and that suitable residential accommodation for staff be found off the hospital site for rent by staff with or without subsidy.

  2. It is recommended that services now provided from the hospital should continue from that location.

  3. It is recommended that:

    1. Legislation be introduced to restrict importation of therapeutic substances to those which may be prescribed or sold in Australia.
    2. The function of hospital manager be combined with other duties of an appropriate staff member: the present arrangement whereby the pharmacist combines his duties with those of hospital manager indicates the value of this.


  4. It is recommended that means for early implementation of health legislation be devised.

  5. It is recommended that:

    1. The use of a ‘Millipore’ or similar method of testing in the Island be further investigated and instituted, if found practicable, as the primary water test for bacterial contamination.

    2. A suitable routine of equipment and transport be established so that check tests of water could be carried out at Canberra by the Capital Territory Health Commission Laboratories.

  6. It is recommended that in new subdivisions and other suitable areas the installation of small sewage treatment plants of the forced aeration or other suitable type with tertiary treatment be considered. These could serve several establishments and so reduce the number of septic tanks. Increased load on the electricity supply would be a consideration.

  7. It is recommended that during the first school term of year the government medical officer medically examine children entering the school for the first time and any other children referred by the teaching staff. Mantoux testing and vaccination, where appropriate, should be arranged concurrently

  8. It is recommended that the Australian Department of Health in liaison with the Capital Territory Health Commission, foster health education in the Island as an important part of preventive medicine
  9. It is recommended that the government medical officer supervise the institution and maintenance of records for organised immunisation program for infants and children a service for adults Because of health implications for Australia, a vaccine should be provided by the Australian Government at no cost to the Island and be used in accord with immunisation programs recommended by the National Health and Medical Research Council for Australia


  10. It is recommended that:

    1. The Minister for Administrative Services continue to make health staff appointments on the advice of the Australian Department of Health

    2. Appropriate representation nominated by the Council participate in the selection interview

Addendum B
Recommendations from New South Wales Red Cross
Blood Transfusion Service


  1. Acquisition of a blood bank refrigerator conforming to the recommendations of the National Blood Transfusion Committee (Medical Journal of Australia 1971 2 1081)

  2. Regular monthly dispatch of four units of 0 Rh-negative and two units of 0 Rh—positive blood

  3. Streamline dispatch of blood and blood products from New South Wales Red Cross Blood Transfusion Service to Norfolk Island using Commonwealth transport facilities

  4. Hold at Norfolk Island twelve units of SPPS and albumin solution.

  5. Train nursing staff, cross matching and blood collection.

  6. Update donor panel.

Addendum C
SOCIAL SERVICES PENSIONS AND BENEFITS-
RATES TO APPLY FROM NOVEMBER 1976

Present Rate

Age pension (men 65 years, women 60 years -
income tested unless 70 years or permanently blind) Single - $43.50pw (41.25)
Married - $36.25pw (34.25

Invalid pension (at least 16 years of age and 85%


permanently incapacitated for work or permanently blind) Single - $43.50pw (41.25)

Married - $36.25pw (34.25

Wife’s pension (wife of an age or invalid pensioner with whom living) $36.25pw (34.25)

Widow’s pension (widow, deserted wife, etc) $43.50pw (41.25)

Supporting mother’s benefit (single mother etc) $43.50pw (41.25


Extra payments for Pensioners

Additional pension for children; each $7.50pw

Guardians/mothers allowance (single pensioner with at least one dependant child), Or $4.00pw

Guardians/mothers allowance (child under 6 or invalid) $6.00pw

Supplementary assistance (limited to amount of rent
or lodging or board and lodging – income tested) $5.00pw

Unemployment, sickness and special benefits:


single under 18 years $36.00pw
over 18 years $43.50pw (41.25)
married $72.50pw (68.50)
additional benefit for children each $7.50pw

Maternity allowance:


no other children in care $30.00
one or two other children $32.00
more than two other children $35.00
in respect of each additional child, multiple birth $10.00

Family allowance (child under 16 or student child 16-25 years not employed):


1st child $3.50pw
2nd child $5.00pw
3rd child $6.00pw
4th child $6.00pw
5th child and subsequent(each) $7.00pw
child in an endowed institution, each $5.00pw

Double orphans pension $11.00pw

Handicapped child’s allowance $15.00pw (10.00)

Sheltered employment allowance – as for invalid pension but must be employed in a sheltered workshop

incentive allowance $5.00pw

Rehabilitation training allowance

(rate determined by Director-General)

Funeral benefit


(funeral amount paid by non-pensioner) $20.00
(where funeral account paid by eligible pensioner) $40.00

Addendum D
INCOME TAX AND HEALTH INSURANCE LEVY IN AUSTRALIA

This addendum explains briefly the main features of the income tax system in Australia so far as it might concern most Islanders especially those earning salary or wages so they can work out approximately what it would mean if income tax and health insurance levy were payable on the same basis as applies to people in comparable circumstances in Australia The figure are for the income year ending 30 June 1977 Changes proposed in the latest Budget are taken into account on the assumption that they will become law It needs to be emphasised that these notes do not cover every aspect of each person’s circumstance and that some of the detail of the law has been omitted in the interest of brevity.



Summary of the System

  1. The standard tax year ends on 30 June If Norfolk Island residents become fully subject to Australian income tax law they will be required to lodge returns of income for the 12 mo ending on 30 June with the Australian Taxation Of face by 31 Au each year (unless approval is obtained to lodge is later) The return of each person would show his or her income of all type e.g. wages, salary, commission, dividends, interest and rent.
  2. From this assessable income various allowable deductions (if any - see paragraph 11) would be subtracted to get the taxable income This taxable income is multiplied by the tax rate on that income (see Appendix A) to get the gross tax The fourth step would be to subtract certain rebates (listed in paragraph from the gross tax to arrive at the income tax payable Final the health insurance levy would be calculated (see paragraph 14 and added on to get the total amount due


  3. It should be noted that persons without dependants with le than $3,646 taxable income in 1977 would not have to pay any income tax and no health insurance levy if the taxable income were less than $2,605. A married man with a dependent spouse for whom he is allowed the full tax rebate, and two school children, could not pay any tax if his taxable income were less than $6,213, he would not be liable for the health insurance levy unless is income was over $4,299.

  4. To avoid people having to find a lump sum each year, tax and levy are collected by instalments from wages. Each week (or other pay period) employers would deduct a specified tax instalment from the pay packet and send the amount deducted to the Taxation office. At the end of the year (or earlier if employment finishes with that employer) the employee would get a form showing how much was earned and how much tax was deducted.

  5. After the return is lodged the Taxation Office would check the figures and post an assessment notice showing the person’s taxable income and the amounts of tax and health insurance levy less the total tax instalments deducted during the year by the employer If as mostly happens the instalments exceed the tax and levy due a refund cheque would be included If the instalments were not quite enough, the balance would have to be paid to the Taxation Office.

How much would be payable?

  1. The table in Appendix B gives an idea of how much tax and levy would be payable by a Norfolk Island resident It shows that as taxable income rises the amount due rises It also depends on how many dependants are maintained and how much is spent on items listed in paragraph 13 Examples showing how to calculate tax and levy are shown in Appendixes C to F.

What is taxable income?
  1. This is assessable income (see paragraphs 9-10) less allowable deductions (paragraph 11)


  2. Assessable income includes wages, the value of board or lodging, and most other allowances or benefits provided by an employer, tips, commissions, bonuses, and most pensions, interest, dividends, rents and business income.

  3. It does not include family allowances, legacies and gifts (unless for services rendered), lottery prizes, capital gains, invalid pensions paid to people below age pension age and repatriation disability pensions (including war widows’ pension, but not service pensions),

  4. Allowable deductions are expenses of gaining assessable income — except private or domestic costs and capital outgoing~ Wage earners generally do not have many allowable deductions, j they include the cost of replacing and repairing tools of trade the cost of technical journals, some housing loan interest, and gifts to specified public charities and institutions, Deductions are not allowed for the cost of travelling to and from home and work, food for a person and his family, and other domestic expenses such as rent.

What are rebates?

  1. Rebates are tax concessions. The amount of rebates that each person may be entitled to would be subtracted from the tax otherwise payable.

  2. There are three main types of rebates:

    1. General concessional rebate (GCR) everyone would automatically get a GCR of at least $610. This rebate would be higher if the amounts spent on items listed below total more than $1,525

      • Medical, dental, chemist, optical expenses, etc.
        (no limit, but net of any reimbursements),

      • Funeral, burial and cremation expenses ($100 maximum)

      • Education expenses ($250 maximum per student)
      • Self—education expenses ($250 maximum),


      • Life insurance and superannuation ($1 200 maximum

      • Child adoption expenses,

      • Rates and land taxes on principal home ($300 maximum)

      • One—third of calls on afforestation shares.

The rebate would be 40% of the total qualifying amounts spent under these headings - ­e.g. if the total spent and allowable were $2 000, the rebate would be $800 (40% of $2 000) instead of only the GCR of $610.

    1. A zone rebate for everyone resident in certain areas, including Norfolk Island. This is a minimum of $216. If the person has dependants or is entitled to the sole parent or housekeeper rebates, the rebate would be increased. Examples are:

      • with a dependent spouse, the zone rebate would be $341;

      • with a dependent spouse and school child, the zone rebate would be $397.50;

      • with a dependent spouse and two school children, the zone rebate would be $454.

The rebate is $216 plus 25% of the sum of the items listed in (c) below for which the person qualifies, plus 25% of the following amounts for dependent children:

      • each student under 25 years, $226

      • one child under 16 years not a student, $226

      • other children under 16 years and not students, $170.

    1. Dependant, sole parent, or housekeeper rebates as follows:

      • Spouse $500
      • Daughter-housekeeper $500


      • Parent of taxpayer or spouse $452

      • Invalid relative $226

      • Sole parent $350

      • Housekeeper $500

For example, if a person wholly maintained a spouse and an invalid relative (who did not have separate net income exceeding $170) his rebate under this heading would be $726 (in addition to the GCR and zone rebates).

What is the health insurance levy?

  1. This is basically 2.5% of taxable income, although because it only starts on 1 October 1976 the rate for the 1977 year is three-quarters of the basic rate i.e 1.875% The levy for l977 cannot exceed $112.50 ($150 in a full year) for a person without dependants or $225 ($300 in a full year) for someone with dependants. Where a husband and wife are each taxpayers, the levy payable the couple would not exceed $225 ($300 in a full year).

  2. People on low incomes would be exempt from the levy Some examples are:

      • Person with no tax rebates for dependants — no levy if taxable income is less than $2 605

      • Person with a $500 spouse rebate — no levy if taxable it is less than $4 300

      • person with a sole parent rebate of $350 — no levy if taxable income is less than $3 791.
  3. Only part of the levy would be payable on incomes in a range just above those exempt levels. The amount payable is gradually increased until the full levy of 1.875% for 1976-77 would be pa~ on taxable incomes of $2 846 $4 142 and $4 698 and above respectively in the three types of case referred to in paragraph 15.


  4. No levy would be payable by people who take out their own appropriate private insurance for both hospital and medical benefit including Medibank Private cover.

Appendix A
INCOME TAX RATES IN AUSTRALIA
FOR INCOME YEAR 1.7.76 to 30.6.77


Taxable income $ Amount of tax payable (before rebates)$

1 – 2,260 20 cents per dollar

2,261 –5,650 452 + 27 cents for each dollar in excess of $2,260 dollars

5,561 – 11,300 1 367.30 + 35 cents for each dollar in excess of $5,650 dollars

11,301 – 16,950 3.344.80 + 45 cents for each dollar in excess of $11,300 dollars

16,951 – 22,600 5 887.30 + 55 cents for each dollar in excess of $16,950 dollars

22,601 – 28,250 8 994.80 + 60 cents for each dollar in excess of $22,600 dollars

28,251 and above 12 384.80 + 65 cents for each dollar in excess of $28,250 dollars



Appendix B
INCOME TAX AND HEALTH INSURANCE LEVY (h.i.l.) AT 1976—77 RATES
IF THEY WERE PAYABLE BY NORFOLK ISLAND RESIDENTS


Table income

Single – no dependants

Wholly dependant spouse

Wholly dependant spouse and one student child


Wholly dependant spouse and two student children

Wholly dependant spouse and three student children




(1) $2605

(2) $3646

(1) $4300

(2) $5,890

(1) $4300

(2) $6052

(1) $4300

(2) $6213

(1) $4300

(2) $6374




Tax

H.I.L.

TOTAL

Tax

H.I.L.

TOTAL

Tax

H.I.L.

TOTAL

Tax

H.I.L.

TOTAL

Tax

H.I.L.

TOTAL

3,000

Nil

56.25


56.25

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

3,500

Nil

65.62

65.62

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

4,000

95.80

75.00

170.80

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil


Nil

Nil

Nil

4,500

230.80

84.37

315.17

Nil

44.47

44.47

Nil

44.47

44.47

Nil

44.47

44.47

Nil

44.47

44.47

5,000

365.80

93.75

459.55

Nil

93.75

93.75

Nil

93.75

93.75

Nil

93.75


93.75

Nil

93.75

93.75

5,500

500.80

103.12

603.92

Nil

103.12

103.12

Nil

103.12

103.12

Nil

103.12

103.12

Nil

103.12

103.12

6,000

663.80

112.50

776.30

38.80

112.50

151.30

Nil

112.50


112.50

Nil

112.50

112.50

Nil

112.50

112.50

6,500

838.80

112.50

951.30

213.80

121.87

335.67

157.30

121.87

279.17

100.80

121.87

222.67

44.30

121.87

166.17

7,000

1013.80

112.50

1126.30

388.80


131.25

520.05

332.30

131.25

463.55

275.80

131.25

407.05

219.30

131.25

350.55

7,500

1188.80

112.50

1301.30

563.80

140.62

704.42

507.30

140.62

647.92

450.80

140.62

591.42

394.30

140.62


534.92

8,000

1363.80

112.50

1476.30

738.80

150.00

888.80

682.30

150.00

832.30

625.80

15.00

775.80

569.30

150.00

719.30

8,500

1538.80

112.50

1651.30

913.80

159.37

1073.17

857.30

159.37

1016.67


900.80

159.37

860.17

744.30

159.37

903.67

9,000

1713.80

112.50

1826.30

1088.80

168.75

1257.55

1032.30

168.75

1201.05

975.80

168.75

1144.55

919.30

168.75

1088.05

9,500

1888.80

112.50

2001.30


1263.80

178.12

1441.92

1207.30

178.12

1385.42

1150.80

178.12

1328.92

1094.30

178.12

1272.42

10,000

2063.80

112.50

2176.30

1438.80

187.50

1626.30

1382.30

187.50

1569.80

1325.80

187.50

1513.30

1269.30


187.50

1456.80

(1) taxable income below which no levy or income tax is payable

(2) Taxable income below which no income tax is payable

This table allows for the zone rebate, a general confessional rebate of $610, and full rebate for the dependant spouse specified at the had of the last four categories.

Appendix C
NORFOLK ISLAND RESIDENT – WITH DEPENDANT SPOUSE

Assessable income

$ $


  • wages 5,868

  • leave bonus 82

  • interest 50 6,000

Less allowable income

= Taxable Income 5,965

Taxable Income x tax rate on that 5,965 (from appendix a above)

i.e 2,260 x 20 cents per dollar 452.00

3,390 x 27 cents per dollar 915.30

315 x 35 cents per dollar 110.25

= Gross tax 1,477.55

Less rebates

(i) G.C.R 610.00

(ii) Spouse rebate 500.00

(iii) Zone rebate 341.00 1,451.00

= Net income tax 26.55

+ Health insurance levy (assuming not appropriately insured privately)

i.e taxable income $5,965 x 1.875% = 111.84

Total tax and levy due 138.39

Less tax instalments deducted by employer each week from
wages : assumed for the purpose of illustration to be 158.60

Refund due from Taxation Office $20.21



Appendix D
NORFOLK ISLAND RESIDENT – WITH DEPENDANT SPOUSE AND TWO STUDENT CHILDREN

Assessable income

$ $


  • wages 6,371

  • leave bonus 89

  • interest 40 6,500

Less allowable deducitons

  • replacement of tools 15

  • gifts to the red cross 3 18

= Taxable Income 6,482

Taxable Income x tax rate on that $6,482 (from appendix a above)

i.e 2 260 x 20 cents per dollar 452.00

3 390 x 27 cents per dollar 915.30

832 x 35 cents per dollar 291.20

= Gross tax 1,658.50

Less rebates

(i) G.C.R 610.00

(ii) Spouse rebate 500.00

(iii) Zone rebate 454.00 1,564.00

= Net income tax 94.50

+ Health insurance levy (assuming not appropriately insured privately)

i.e taxable income $6,482 x 1.875% = 121.53

Total tax and levy due 216.03

Less tax instalments deducted by employer each week from

wages : assumed fro the purpose of illustration to be 241.15

Refund due from Taxation Office $25.12



Appendix E
NORFOLK ISLAND RESIDENT – WITH DEPENDANT SPOUSE AND FOUR STUDENT CHILDREN

Assessable income

$ $


  • wages 9,793

  • leave bonus 137

  • interest 70 10,000

Less allowable deductions

  • gifts to the red cross 30 30

= Taxable Income 9,970

Taxable Income x tax rate on that $9,970 (from appendix A above)

i.e 2 260 x 20 cents per dollar 452.00

3 390 x 27 cents per dollar 915.30

320 x 35 cents per dollar 1,512.30

= gross tax 2,879.30

Less rebates

(i) Assume the following expenditures

- medical, dental, chemist, optical expenses
(net of reimbursements) 700.00
- education expenses, e.g. fees books,
transport expenses to school, uniforms (net of
reimbursements) 620.00
- life insurance 280.00

1,600.00

As the sum of these expenditures is greater than $1,525, a rebate of 40% of $1,600 i.e. $640 is allowed. 640.00

(ii) Spouse rebate 500.00

(iii) Zone rebate 567.00 1,707.00

= Net income tax 1,172.30

+ Health insurance levy (assuming not appropriately insured privately)

i.e taxable income $9,970 x 1.875% = 186.93

Total tax and levy due 1,359.23

Less tax instalments deducted by employer each week from
wages : assumed for the purpose of illustration to be 1,412.45

Refund due from Taxation Office $53.22



Appendix F
NORFOLK ISLAND RESIDENT – SINGLE NO DEPENDANTS

Assessable income

$ $


  • wages 4,882

  • leave bonus 68

  • interest 50 5,000

Less allowable deductions

  • replacement of tools 40

  • gifts to the red cross 10 50

= Taxable Income 4,950

Taxable Income x tax rate on that 4,950 (from appendix A above)

i.e 2 260 x 20 cents per dollar 452.00

2,690 x 27 cents per dollar 726.30

= Gross tax 1,178.30

Less rebates

(i) G.C.R 610.00

(ii) Zone rebate 216.00 826.00

= Net income tax 352.30

+ Health insurance levy (assuming not appropriately insured privately)


i.e taxable income $4,950 x 1.875% = 92.81

Total tax and levy due 445.11

Less tax instalments deducted by employer each week from

wages : assumed for the purpose of illustration to be 468.65

Refund due from Taxation Office $23.54


Addendum E
AUSTRALIAN ESTATE DUTY AND GIFT DUTY


Estate Duty

If Australian duty were extended to Norfolk Island the estates of Islanders that were of a value in excess of the exemption levels would be dutiable on a similar basis to the estates of persons who are domiciled in Australia at the time of death



  1. Subject to certain exemptions and deductions estate duty on the estates of persons who had an Australian domicile at the time of death is levied on all property included in their estates except real property situated outside Australia In addition to property owned absolutely by the deceased person certain property known as ‘notional estate’ is also deemed to be part of the estate Included under this heading are gifts by the deceased within the three years prior to death the value of any interest that the deceased had at the time of death in a joint tenancy or joint ownership and the proceeds of assurance policies on the life of the deceased where the premiums had been paid by or on behalf of the deceased and the proceeds are payable to the widow, widower, children, grandchildren, parents, brothers, sisters, nephews or nieces of the deceased. If gift duty has been paid on any property which is included in the estate as ‘notional property’ a rebate of duty is allowable.

  2. Debts due and owing by the deceased at the time of death are allowable deductions from the value of the estate in calculating the value on which duty is payable. Australian income taxes assessed on income derived by the deceased before death are also allowable deductions.

  3. Further deductions which vary according to the relationship of the beneficiaries to the deceased are allowable:
    1. On the assumption that the proposed Budget changes will become law, a special deduction will be allowable where the whole or part of the estate passes to the widow or widower of the deceased person. The amount of the deduction is $50,000 or the value of the interest in the estate that passes to the surviving spouse, whichever is the lesser.


    2. Where the whole of the estate passes to the widow, widower, children or grandchildren of the deceased person, a further deduction is allowable. This deduction which varies according to the value of the estate commences at $40,000. If the value of the estate, after taking into account any deduction allowable under (a), does not exceed $40,000 the estate is exempt from duty. If that value exceeds $40,000, the deduction decreases by $2 for every $8 by which that value exceeds $40,000. For eligible primary producer estates (see paragraph 5) an increased deduction commencing at $48,000 is allowable. It decreases by $2 for every $8 by which the value of the estate exceeds $48,000.

    3. Where the whole of the estate passes to persons other than the close relatives specified in (b), a deduction on a lesser scale is allowable. It commences at $20 000 for estates not exceeding that value and decreases by $2 for every $8 by which the value of the estate exceeds $20 000. The deduction commences at $24 000 for eligible primary producer estates. Where the estate passes partly to the close relatives specified in (b) and partly to other persons, the deduction is calculated on an apportionment basis.
  4. If the deceased was domiciled in Australia (including Norfolk Island if the duty is extended to it) and his estate includes assets used in a primary production business in Australia increased deductions (see paragraph 4) and a rebate of duty may be allowable. An eligible primary producer estate is one where the value of primary production assets (including a dwelling on land used for primary production) exceeded the value of other assets in the estate and the income derived by the deceased from primary production during the five years preceding death exceeded his income from other sources. Where the value of the estate after allowing all deductions is $140 000 or less the rebate is 50/a of the duty otherwise payable on primary production assets The rate of rebate reduces as the value exceeds $140 000 and ceases where the value is $250 000 or more, Primary production include forestry but not fishing.


  5. An estate duty return would need to be lodged at the Australian Taxation Office unless the value of the estate does not exceed the following limits:

    1. $90 000 if the whole of the estate passes to the widow or widower of the deceased

    2. $40 000 if the whole of the estate passes to the children and/or grandchildren of the deceased or to those relatives and the widow or widower or

    3. $20 000 in any other case

These figures take into account the proposed Budget changes The Australian Taxation Office can dispense with the requirement for an estate duty return if otherwise satisfied that no duty would be payable

  1. Duty is calculated on the dutiable value of the estate, i.e the net value after deducting all allowable deductions. The rates of estate duty (and gift duty which are the same) are:

Dutiable value of estate or value Rate of duty
of all gifts in aggregation period

$20,000 and under 3%

$20,001 up to $40,000 3% to 6% (i.e 3% plus .03%
for each $200 in excess of $20,000)

$40,001 up to $240,000 6% to 26% (i.e 6% plus .02%


for each $200 in excess of $40,000

$240,001 up to $1,000,000 26% to 27.9% (i.e 26% plus .005%


for each $2,000 in excess of $240,000)

Over $1,000,000 27.9%



Gift Duty
  1. Subject to the statutory exemption (see paragraph 9), gifts by a donor domiciled in Australia or by a company incorporated under the law of a State or Territory, which is part of the Commonwealth, are subject to Australian gift duty regardless of where the gifted property is situated. Gifts by other persons or companies are subject to duty only where the gifts are of property which is situated in Australia at the time when the gift is made.


  2. A gift is subject to duty if it exceeds $10 000 in value or if the value of the gift together with the value of all other gifts made by the donor to the same or any other donor in the aggregation period totals in excess of $10 000. The aggregation period in relation to any gift is the period commencing eighteen months prior to the date of that gift and ending eighteen months after that date. The rate of duty on a gift is determined by reference to the total value of all gifts made by the donor in the aggregation period for that debt. If the rate of duty as assessed on a gift is increased because of a subsequent gift within eighteen months an amended gift duty assessment is issued.

  3. A gift duty return is to be lodged fro any gift in excess of $7,500 or if the total value of the gifts by the same donor exceeds $7,500 in any period of eighteen months.

  4. The rates of gift duty are the same as those fro estate duty (see paragraph 7) but immediately above the exemption level of $10,000 there is a shading in so that the full rate of gift duty does not apply until the value of $10,638 is reached.

NORFOLK ISLANDERS – ESTATE DUTY ON ESTATES OF SELECTED VALUES
NON-PRIMARY PRODUCER ESTATES


Value of Estate

Estate Duty Payable




Estate passes wholly to widow or widower

Estate passes wholly to widow, widower, children and grandchildren (where estate exceeds $50,000 at least $50,000 passes to widow or widower

Estate passes wholly to children and grandchildren


Estate passes wholly to persons other than widow, widower, children or grandchildren

$

$

$

$

$

20,000

Nil

Nil

Nil

Nil

40,000

Nil

Nil

Nil

937.50

70,000

Nil

Nil

2,103.75

5,150

90,000

Nil

375

5,150

9,397.50

100,000

375

375

7,125

12,000

150,000


7,125

7,125

21,642.50

25,500

NORFOLK ISLANDERS – ESTATE DUTY ON ESTATES OF SELECTED VALUES
PRIMARY PRODUCER ESTATES


Value of Estate

Estate Duty Payable




Estate passes wholly to widow or widower

Estate passes wholly to widow, widower, children and grandchildren (where estate exceeds $50,000 at least $50,000 passes to widow or widower

Estate passes wholly to children and grandchildren

Estate passes wholly to persons other than widow, widower, children or grandchildren

$

$

$

$

$

20,000

Nil

Nil

Nil

Nil

40,000

Nil

Nil

Nil

375

70,000


Nil

Nil

706.40

2,781.50

90,000

Nil

Nil

2,375.60

5,280

100,000

46.88

46.88

3,453.10

6,828.10

150,000

3,453.13

3,453.13

12,380.22

16,798.13

Note: The figures are based on the assumption that three-quarters of the assets are primary production assets.



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