The Government introduced the Norfolk Island Legislation Amendment Bill 2015 on 26 March 2015. This Bill implements changes announced by the Assistant Minister for Infrastructure and Regional Development, Jamie Briggs, on major changes to the governance arrangements for Norfolk Island. Norfolk Island is part of the Commonwealth of Australia, but is a self-governing external territory with most of the powers of a national government, granted under the Norfolk Island Act 1979. Norfolk Island is currently outside of Australia's immigration, social security and taxation systems. The Government has long reiterated their intention to integrate the Norfolk Island community into the broader taxation and welfare system of Australia.
The new arrangements come after extensive investigations into the governance, social and financial frameworks operating in Norfolk Island. The most recent parliamentary inquiry into economic development on Norfolk Island, Same country: different world – The future of Norfolk Island, was tabled in October 2014. The bipartisan report recommended changes to the governance arrangements. A 2014 Australian National Audit Office report also outlined the financial difficulty associated with continuing economic downturn and a decline in tourism. The report also found a lack of proper financial controls and poor financial management practices in the Norfolk Island administration.
Under the proposed reforms the Norfolk Island Legislative Assembly would be abolished to be replaced by a Norfolk Island Regional council to be established following elections in the first half of 2016. An interim Advisory Council will be created to support the transition with representatives from the Norfolk Island administration. A Norfolk Island Regional Council will be responsible for all local level services. It will continue to make laws on matters, such as planning and development, based largely on New South Wales state laws. The Australian Government will integrate Norfolk Island with the mainland tax and social security systems, including access to Medicare and the Pharmaceutical Benefits Scheme. Norfolk Islanders will not be subject to GST immediately. Immigration, customs and quarantine services will also be extended.
A 2014 report by the Centre for International Economics (CIE) on the impact of proposed reforms on the Norfolk Island economy forecast an increase in activity of around 14 per cent on the Island.
A strong emphasis on consultation and information sharing activities will precede the implementation of the reforms which will commence in July 2016. Some resistance to the measures is expected mainly relating to the loss of ‘self-government’.
These structural reforms are a culmination of the financial arrangements between the Australian Government and the Norfolk Island administration that have been developing since at least 2010. Some of the key changes included the introduction of the Territories Law Reform Act 2010 which among other matters implemented new governance arrangements for further transparency and oversight of the Norfolk Island financial framework. One outcome of the reform legislation was the Norfolk Island Road Map a five-year agreement for the reform of the governance and finances of Norfolk Island, made between the Australian Government and the Norfolk Island Government. Four funding agreements were signed with conditions linked to the Roadmap. The Australian Government signed the most recent funding agreement in June 2013.
Payment of any funding provided by the Commonwealth was subject to the Government of Norfolk Island meeting agreed milestones and working collaboratively through the required legislative and regulatory changes to ensure the smooth introduction of the reforms outlined in the agreement.
Notwithstanding the longer term goals set out in the Roadmap, the Norfolk Island economy has continued to contract, creating difficulties for local government, business and community members.
The CIE report noted that between 2009–10 and 2013–14 the Australian Government has provided around $28 million to the Norfolk Island Government.
In the 2014–15 Budget the Government provided $7.5 million to assist the Norfolk Island Government to meet its financial obligations. This funding will allow for the ongoing provision of essential health, education, policing and utility services to Norfolk Island residents. The Government also provided $2.0 million to support improved governance on Norfolk Island.