Chapter 1 
Introduction
  I do not believe the current arrangements are sustainable … When one considers that costs associated with maintaining and renewing essential infrastructure, on-going service provision, the rapidly escalating costs of social services, healthcare, education, the ageing population, the need to vastly improve occupational health and safety and the environmental pressures facing the Island, it is not really surprising that this is well beyond the capacity of such a small population.1
              
                      
       
         Background to the inquiry
           Focus of this report
           Norfolk Island today
           Further challenges to sustainability
           The question of 'difference'
           Role of the Committee
           Structure of the report
           
       
                      
                      
					  
					     | 
					      | 
					    
					  
					    Background to the inquiry | 
					    
					  
                        | 1.1  | 
                        This report represents the second part of an  inquiry initiated by a reference from the then Minister for Regional Services,  Territories and Local Government, the Hon. Wilson Tuckey MP, which was accepted  by the Committee on 28 March 2003. The terms of reference for the inquiry  included that the governance arrangements for Norfolk Island “be considered in the context of the financial  sustainability” of the Island.    | 
					  
                      
                        | 1.2 | 
                        Accordingly, at the outset of its inquiry, the  Committee determined that issues relating to the financial sustainability of  the Island would be addressed separately in a  second report, while the first report would focus on ways to improve and  strengthen governance arrangements on the Island.  The terms of reference for the inquiry also directed the Committee to  investigate measures to improve the operations and organisation of the  Territory Ministry and Legislature on Norfolk Island.    | 
                      
                     
                                           
                        
                        | 1.3 | 
                        In assessing current and future governance  arrangements, including the provision of government services and  infrastructure, the Committee was called on to make particular reference to the  findings of the Commonwealth Grants Commission’s (CGC) 1997 Report on Norfolk Island.  | 
                        
                      
                        | 1.4 | 
                        The first report of this inquiry, Quis custodiet ipsos custodes?, was  tabled in December 2003. The report presented a comprehensive case for reform  and focused its analysis on existing political arrangements and legal  infrastructure, which the Committee considered to be inadequate.2 The Committee argued that: 
  - the best approach would be to retain the existing  institutions of government, but with the following essential reforms:
 
                      - modification  to improve accountability and financial    management;
 
                      - the resumption of Commonwealth responsibility for delivery of key services and  programmes on-Island such as social welfare, health and immigration;
 
                    - rectification  to the distortions in the electoral system to open the political and  administrative systems to change; and
 
                      - imposition  of an equitable tax regime, including on income, to provide financial sustainability.3
   
                           | 
                      
                      
                        | 1.5  | 
                        In making its recommendations, the Committee did  not intend for the Norfolk Island Government to take on additional, costly  functions, and, therefore, recommended that the task of implementing and  maintaining these review mechanisms should fall singularly on the Commonwealth.4 
                            | 
                      
					  
                      
                        | 1.6  | 
                        On 5 February 2004, the Norfolk Island Government released  its response to the recommendations of the Committee’s first governance report.  Many of the Committee’s recommendations were accepted despite the Norfolk Island  Government’s contention that the Committee had failed to recognise the unique  governance arrangements on Norfolk Island.5 
                            | 
                      
                      
                        | 1.7 | 
                        The Committee reiterates its disappointment that  the Commonwealth Government did not respond to the recommendations of the Committee’s  first report on Norfolk Island governance.6 The Committee stands by these recommendations and now encourages the Commonwealth  Government to expedite its response to both governance reports and, to the  outstanding recommendations in the Committee’s review of the Annual Reports of  the Department of Transport and Regional Services and the Department of the  Environment and Heritage with respect to Norfolk Island. 
                            | 
                      
                        
                       
                      
                        | 1.8 | 
                        The second part of the governance inquiry,  focusing on financial sustainability, was initiated in the 40th  Parliament; however, it lapsed when the House of Representatives was dissolved on  Tuesday, 31 August   2004.   | 
                      
                      
                        | 1.9 | 
                        On Thursday 9 December 2004, the Minister for  Local Government, Territories and Roads, the Hon. Jim Lloyd,  MP wrote to the Committee asking that it continue its inquiry into Norfolk  Island Governance Part 2 (Financial Sustainability of Current Governance  Arrangements). The Committee resolved to continue this inquiry on 9 February 2005.  | 
                      
                      
                        | 1.10 | 
                        In the meantime, a general election has been  held on Norfolk Island. The 11th  Legislative Assembly was formed on 27 October 2004.  | 
                      
                      
                       
                      
                        | 1.11 | 
                        As a matter of courtesy, on 29 February 2005, the Committee wrote  to the Norfolk Island Government to inform them that the sustainability inquiry  was to proceed and to invite them, as a new Legislative Assembly, to make a  submission. No submission has been received.7  
                            | 
                      
                      
                        | 1.12 | 
                        The inquiry was advertised in The Australian and The Norfolk Islander in March and April 2005 respectively. The  closing date for submissions was Friday 22 April 2005. Further submissions were received  following an advertisement placed in The Norfolk Islander on 27 August 2005 by the  Minister for Local Government, Territories and Roads, the Hon. Jim Lloyd,  MP.  | 
                      
					  
					  | 1.13 | 
					    The Committee received a total of 29  submissions.   | 
					    
						  1.14 | 
					        On 6 and 7 June 2005, the Committee held private briefings and  inspections on King and Kangaroo   Islands as a comparative  exercise, drawing on their population size and remoteness from the mainland,  while acknowledging that their local government regimes are significantly  different to the self-governing Territory   of Norfolk Island. The  Committee examined the budgetary processes employed by the local councils, as  well as inspecting specific infrastructure on the islands.  | 
					    
						  1.15 | 
					        The Committee also held a public hearing in Canberra on 4 August 2005 with  representatives of the Department of Transport and Regional Services, the  Australian Treasury, and the Australian Bureau of Statistics. A former Chief  Executive Officer of the Norfolk Island Administration also gave evidence at  this hearing.8 
					            | 
					    
						  1.16 | 
					        The Committee was disappointed to have to cancel  its visit to Norfolk Island to conduct public  hearings, scheduled for 2 and 3   October 2005. The Committee cancelled its visit because the Norfolk  Island Government chose not to accept an invitation to appear at the scheduled  hearing.   | 
					    
						  
						     | 
						      | 
					    
						  
						    Focus of this report | 
					    
						  1.17 | 
					        The second part of the inquiry has focused on  the sustainability of the current governance arrangements, as directed by the  terms of reference.   | 
					    
						  1.18 | 
					        The Committee has previously noted that the financial  and administrative capacities of the Norfolk Island Government and the system  of financial management have been the subjects of a number of inquiries and  reports.9 Many of these reports, including that of the CGC, have argued that Norfolk Island has adequate capacity to raise more  revenue.10 This premise has been at the core of further arguments, that, the Norfolk  Island Government could extend its legislative powers and areas of  responsibility.11  
					           | 
						  
						  1.19 | 
					        This report challenges these assumptions. The  Committee suggests that the Norfolk Island Government and its Administration have  limited options for further revenue-raising. In addition, the Committee argues  that there is limited capacity, in terms of human and financial resources, to  administer internal revenue-raising systems, as further discussed in Chapter  Three.  | 
					    
						  1.20 | 
					        This notwithstanding, in this report, the  Committee does not canvass the option of revoking Norfolk   Island’s internal self-government. Rather, the Committee has  called for a ‘remodelling’ of self-government and reiterates its previous  recommendation for a fundamental overhaul of Commonwealth Government policy  towards Norfolk Island. At the core of the  Committee’s recommendations has been a desire to achieve the right balance  between the services provided by, and regulatory powers of, both the  Commonwealth and Norfolk Island governments.  | 
					    
						  
						     | 
						      | 
					    
						  
						    Norfolk Island today | 
					    
						  1.21 | 
					        Norfolk Island  is often referred to as a “unique” and “special place”.12 The Norfolk Action Group stated: 
					          Norfolk  is a unique place because of its history, language and culture. For example,  our language is one of the world’s rarest. Despite the influences of tourism  and external forces … our culture remains strong. If it were to die, there is  nowhere else in the world where it could be resurrected …13  
					           | 
						    
						  1.22 | 
					        Data from the 2001 Census of Population and  Housing indicates that the proportion of the permanent population who are of  Pitcairn descent has remained remarkably stable over the last 15 years. Although  the total proportion has remained under 50 per cent, younger Pitcairn  descendants represent two-thirds of the population under 15 years of age (see Table  1.1).   
					         
					          Table 1.1 Norfolk Island permanent population: Pitcairn descent,  1986-2001 
					          
                                
                                     | 
                                  2001  | 
                                  1996  | 
                                  1991  | 
                                  1986  | 
                                 
                                
                                     | 
                                  Total  | 
                                  % total  | 
                                  Total   | 
                                  % total  | 
                                  Total  | 
                                  % total  | 
                                  Total  | 
                                  % total  | 
                                 
                                
                                  Under 15 years  | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                 
                                
                                  Of Pitcairn descent  | 
                                  208  | 
                                  67.3  | 
                                  194  | 
                                  65.8  | 
                                  228  | 
                                  67.7  | 
                                  230  | 
                                  66.5  | 
                                 
                                
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                 
                                
                                  15 years and over  | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                 
                                
                                  Of Pitcairn descent  | 
                                  548  | 
                                  43.3  | 
                                  489  | 
                                  41.6  | 
                                  464  | 
                                  40.7  | 
                                  426  | 
                                  39.4  | 
                                 
                                
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                 
                                
                                  All ages  | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                 
                                
                                  Of Pitcairn descent  | 
                                  756  | 
                                  48.0  | 
                                  683  | 
                                  46.5  | 
                                  692  | 
                                  46.8  | 
                                  656  | 
                                  45.9  | 
                                 
                                
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                 
                               
				            Sources Norfolk Island Administration, Census of  Population and Housing, 7 August 2001 (p. 10) and 6 August 1991 (p.  12)  
 | 
					    
						  1.23 | 
					        Norfolk Island,  like many other remote and isolated regional areas of Australia,  faces significant challenges in its population and demography. Most notably  these include an ageing population, and a decline in the number of itinerant workers  and visitors on the Island.  | 
					      
					         | 
					          | 
				        
					      
					        An ageing population | 
				        
					      
					        | 1.24 | 
					        According to recent Norfolk Island Census  figures, Norfolk Island is experiencing  “similar but more dramatic trends” in its population demographics compared to  those found in other parts of Australia.14 
					             
				                Table 1.2 Trends in Norfolk Island Permanent Population, 1986 to 2001 
					          
                                
                                  | 
                                      | 
                                  2001  | 
                                  1996  | 
                                  1991  | 
                                  1986  | 
                                     | 
                                 
                                
                                     | 
                                     | 
                                     | 
                                     | 
                                     | 
                                  % increase/ decrease from    1986 to 2001  | 
                                 
                                
                                    
                                      Under 15  | 
                                    
                                      309  | 
                                    
                                      295  | 
                                    
                                      337  | 
                                    
                                      346  | 
                                    
                                      -11.97%  | 
                                 
                                
                                     | 
                                  19.6%  | 
                                  20.1%  | 
                                  22.8%  | 
                                  24.2%  | 
                                     | 
                                 
                                
                                  15 to 64  | 
                                  1005  | 
                                  940  | 
                                  930  | 
                                  932  | 
                                  7.26%  | 
                                 
                                
                                     | 
                                  63.8%  | 
                                  63.9%  | 
                                  62.9%  | 
                                  65.3%  | 
                                     | 
                                 
                                
                                  65 and over  | 
                                  256  | 
                                  234  | 
                                  207  | 
                                  146  | 
                                  42.97%  | 
                                 
                                
                                     | 
                                  16.3%  | 
                                  15.9%  | 
                                  14%  | 
                                  10.2%  | 
                                     | 
                                 
                                
                                  Total population  | 
                                  1574  | 
                                  1470  | 
                                  1478  | 
                                  1428  | 
                                  9.28%  | 
                                 
                               
					          Source Norfolk Island Administration, Census of  Population and Housing, 7 August 2001 (p. 8) and 6 August 1991 (p.10). 
					             
					           
				             | 
					      
						   
						     | 1.25 | 
							 While population projections for Norfolk Island are unavailable,15 it is nonetheless evident that the overall population of Norfolk   Island has continued to increase in the over 15 age category  during the past 15 years (from 10.2 per cent in 1986 to 16.3 per cent in 2001).  Moreover, Norfolk Island’s population is, on  average, significantly older than that in other parts of Australia. In  2001, 16.3 per cent of the permanent population was 65 years or over, compared  with 12.5 per cent of the rest of the population.16 If, as is projected, the proportion of the population aged 65 years and over is  to increase (current estimates are between 27 and 30 per cent by 2051), it is more  than likely that such trends will be mirrored on Norfolk   Island.17 
							    | 
						   
						
						     | 1.26 | 
							 In other States and Territories, such trends are  accompanied by a projected decrease in the proportion of people under 15 years  to between 12 and 15 per cent by 2051. Due to the absence of life  expectancy data it is difficult to project similar trends for Norfolk   Island (see footnote 15). This notwithstanding, it is clear from  Table 1.2 that there has been a decline in the number of young people on  Norfolk Island over the past 15 years (from 24.2 per cent in 1986 to 19.6 per  cent in 2001).   | 
				        
						
						     | 1.27 | 
							 Overall, population growth continues through  natural accretion and migration. Despite some variability, the total number of  births over the past eight years has outweighed the total number of deaths.18  
							   
							   Table 1.3 Births and  deaths, 1996-97 to 2003-04 
							   
                                 
                                      | 
                                      | 
                                   2003-04  | 
                                   2002-03  | 
                                   2001-02  | 
                                   2000-01  | 
                                   1999-00  | 
                                   1998-99  | 
                                   1997-98  | 
                                   1996-97  | 
                                   Totals  | 
                                  
                                 
                                   Births  | 
                                   Female  | 
                                   11  | 
                                   7  | 
                                   7  | 
                                   8  | 
                                   8  | 
                                   15  | 
                                   12  | 
                                   5  | 
                                      | 
                                  
                                 
                                      | 
                                   Male  | 
                                   11  | 
                                   6  | 
                                   10  | 
                                   9  | 
                                   16  | 
                                   8  | 
                                   12  | 
                                   9  | 
                                      | 
                                  
                                 
                                      | 
                                   Total  | 
                                   22  | 
                                   13  | 
                                   17  | 
                                   17  | 
                                   24  | 
                                   23  | 
                                   24  | 
                                   14  | 
                                   154  | 
                                  
                                 
                                   Deaths  | 
                                   Female  | 
                                   7  | 
                                   8  | 
                                   10  | 
                                   19  | 
                                   11  | 
                                   5  | 
                                   7  | 
                                   5  | 
                                      | 
                                  
                                 
                                      | 
                                   Male  | 
                                   8  | 
                                   2  | 
                                   12  | 
                                   9  | 
                                   9  | 
                                   9  | 
                                   3  | 
                                   9  | 
                                      | 
                                  
                                 
                                      | 
                                   Total  | 
                                   15  | 
                                   10  | 
                                   22  | 
                                   28  | 
                                   20  | 
                                   14  | 
                                   10  | 
                                   14  | 
                                   133  | 
                                  
                                 
                                   Natural    increase*  | 
                                      | 
                                   7  | 
                                   3  | 
                                   -5  | 
                                   -11  | 
                                   4  | 
                                   9  | 
                                   14  | 
                                   0  | 
                                      | 
                                  
                                
							   Sources Norfolk Island Administration, Annual Reports, 2001-02 to  2003-04; Norfolk Island Administration, Census of Population and Housing, 7 August 2001, p. 40. 
							      
                                   Note *  The term ‘natural increase’ is used by the Australian Bureau of Statistics. See,  for example, Catalogue no. 3201.0 
							     | 
				        
						
						     | 1.28 | 
							 The Norfolk Island  population has remained relatively stable since the mid 1980s.19 Those permanently on the Island have generally  represented over 60 per cent of the population. Approximately 37 per cent of  the permanent population were born on Norfolk;  33.4 per cent were born in other parts of Australia, and 20.7 per cent were  born in New Zealand.  
							   Table 1.4 Total  population: residency status, 1986-2001 
							   
                                 
                                      | 
                                   2001  | 
                                   1996  | 
                                   1991  | 
                                   1986  | 
                                  
                                 
                                      | 
                                   No  | 
                                   %  | 
                                   No  | 
                                   %  | 
                                   No  | 
                                   %  | 
                                   No  | 
                                   %  | 
                                  
                                 
                                   Resident 
                                    | 
                                   1359 
                                    | 
                                   52.2 
                                    | 
                                   1282 
                                    | 
                                   58.8 
                                    | 
                                   1294 
                                    | 
                                   56.6 
                                    | 
                                   1240 
                                    | 
                                   52.4 
                                    | 
                                  
                                 
                                   General Entry Permit  | 
                                   215  | 
                                   8.3  | 
                                   188  | 
                                   8.6  | 
                                   184  | 
                                   8.1  | 
                                   188  | 
                                   7.9  | 
                                  
                                 
                                   Permanent    population  | 
                                   1574  | 
                                   60.5  | 
                                   1470  | 
                                   67.4  | 
                                   1478  | 
                                   64.7  | 
                                   1428  | 
                                   60.3  | 
                                  
                                 
                                   Temporary Entry Permit 
                                    | 
                                   442 
                                    | 
                                   17.0 
                                    | 
                                   293 
                                    | 
                                   13.4 
                                    | 
                                   424 
                                    | 
                                   18.6 
                                    | 
                                   535 
                                    | 
                                   22.6 
                                    | 
                                  
                                 
                                   Other  | 
                                   21  | 
                                   0.8  | 
                                   9  | 
                                   0.4  | 
                                   10  | 
                                   0.4  | 
                                   14  | 
                                   0.6  | 
                                  
                                 
                                   Itinerant    population  | 
                                   463  | 
                                   17.8  | 
                                   302  | 
                                   13.8  | 
                                   434  | 
                                   19.0  | 
                                   549  | 
                                   23.2  | 
                                  
                                 
                                   Tourist and visitor 
                                    | 
                                   564 
                                    | 
                                   21.7 
                                    | 
                                   409 
                                    | 
                                   18.8 
                                    | 
                                   373 
                                    | 
                                   16.3 
                                    | 
                                   390 
                                    | 
                                   16.5 
                                    | 
                                  
                                 
                                   Total  | 
                                   2601  | 
                                      | 
                                   2181  | 
                                      | 
                                   2285  | 
                                      | 
                                   2367  | 
                                      | 
                                  
                                
							   Source Norfolk Island Administration, Census of  Population and Housing, 7 August 2001 (p. 6) and 6 August 1991 (p. 7). 
							     | 
				        
						
						   | 
						    | 
					    
						
						  Decreasing numbers of ‘itinerants’ | 
					    
						
						     | 1.29 | 
							 The proportion of the Norfolk   Island population classified as ’itinerant‘, has steadily declined  (23.2 per cent in 1986, to 17.8 per cent in 2001). The itinerant population can  be considered a labour source, with roughly 67 per cent of the itinerant  population “working in a job or business”. Less than one per cent of this  population were retired.20 
							     | 
				        
						
						     | 1.30 | 
							 In his submission, Mr Michael Hehir noted that the number of working  persons has “substantially decreased since 2001”.21 In the financial year to 30 June 2004, Mr Hehir reported that there were 403  Temporary Entry Permit (TEP) holders and that this decreased to 357 in the  following financial year, constituting “a net decline of 62 over this period”  with a further “40 TEP holders [having] left the Island” in the period from 1  July 2005 to date.22 
							    | 
						
						
						     | 1.31 | 
							 However, Table 1.4 indicates that the proportion  of the population who are tourists or visitors to the Island  has increased.23 
							     | 
				        
						
						   | 
						    | 
					    
						
						  Further challenges to sustainability | 
					    
						
						     | 1.32 | 
							 In addition to an ageing population and the  concerning decline in the number of itinerants on Norfolk   Island, the Island’s remoteness  and limited accessibility is a key factor in the four following challenges that  impede a sustainable future for Norfolk Island  under the current arrangements: 
							- a vulnerable and volatile economy, essentially  dependent on one industry, tourism;
 
							- limited taxation and revenue-raising capacity;
 
							- declining levels of service delivery and  depreciating infrastructure; and
 
						  - governance arrangements, coupled with a restricted  administrative capacity.
   | 
				        
						
						   | 
						    | 
					    
						
						  Norfolk as  a remote island community  | 
					    
						
						     | 1.33 | 
							 The Committee understands that for some Norfolk  Islanders, remoteness has required a degree of self-sufficiency.24 The issues and circumstances facing individual isolated island communities, clearly  differ significantly from those juxtaposed to more urban locations, and from many  other remote communities. Principally as a result of increased transportation  and freight costs, housing costs of island communities are higher, as is the  cost of food. Businesses also suffer from the additional costs of such  remoteness.25 
							    | 
						
						
						   | 
						    | 
					    
						
						  A vulnerable and volatile economy | 
					    
						
						  | 1.34 | 
						  The Norfolk Island  economy is precariously dependent on tourism. Recent trends in tourism have  seen a decline in the number of tourists travelling to Norfolk and a decrease in the revenue  generated by the tourist sector as a result. The Norfolk   Island tourism industry is facing increased pressure to keep pace  with global market changes and increasing competition. Today, the industry  caters mainly to the rather “price sensitive”26 tourist market of the over 70s.  
						      | 
					    
						
						  | 1.35 | 
						  It is also clear that despite numerous attempts,  Norfolk Island has found it particularly  difficult to diversify its economy away from its reliance on tourism.   | 
					    
						
						   | 
						    | 
					    
						
						  Limited taxation and revenue-raising capacity   | 
					    
						
						  | 1.36 | 
						  The nature of existing taxation arrangements on Norfolk Island significantly hampers the ability of the  Norfolk Island Government to raise sufficient revenue to adequately fund acceptable  levels of services on the Island. Because income  and personal wealth are not taxed, the existing tax regime is effectively  biased against tourism, a circumstance that is regressive and inequitable, particularly  given the current financial climate. Norfolk Island  is limited in the number of tourists it can accommodate sustainably. Tourism  revenue, therefore, is finite. The limits imposed by the size of Norfolk Island’s population also mean that there is a  very restricted and narrow resource base from which revenue is, and, can be,  drawn.  | 
					    
						
						   | 
						    | 
					    
						
						  Declining standards of service delivery and  depreciating infrastructure | 
					    
						
						  | 1.37 | 
						  There has been a significant lack of forward  planning with respect to infrastructure and service delivery on Norfolk Island. Social security benefits are paid at  roughly 80 per cent of those paid to recipients in other States and Territories.  Some benefits, such as those for the unemployed, do not exist. Many members of the  Norfolk Island community are concerned by the escalating  ageing population and the implications for superannuation, pensions and other  welfare payments.   | 
					    
						
						  | 1.38 | 
						  The Committee has repeatedly commented on the sad  state of public health infrastructure, including aged care facilities, and the  only hospital that, effectively, needs to be rebuilt. Educational  infrastructure is also of concern, as are roads, the provision and maintenance  of reliable electricity generation facilities, and a deep water harbour.  | 
					    
						
						   | 
						    | 
					    
						
						  Governance arrangements and  limited administrative capacity  | 
					    
						
						  | 1.39 | 
						  Underpinning  all of these challenges are the current governance arrangements and the  incapacity of the Norfolk Island Administration, which is, effectively,  required to carry out administrative functions and the delivery of services at  Local Government, State and Commonwealth levels. The Administration is  plagued with limited human and financial resources, a situation which is  compounded by an almost complete absence of statistical infrastructure, that  would allow for the necessary forward planning and budgeting. The Norfolk Island Government has, on many  occasions, had to rely on Commonwealth funding and technical assistance and  support.  | 
					    
						
						  | 1.40 | 
						  As canvassed in the Committee’s first report, there  are also perceptions and claims of conflicts of interest arising due to Members  of the Legislative Assembly holding interests or positions in the community that  are incompatible with their role as elected representatives.    | 
					    
						
						   | 
						    | 
					    
						
						  The question of ‘difference’ | 
					    
						
						  | 1.41 | 
						  The Committee is concerned that an argument of  ‘difference’ on Norfolk Island has underlined  an acceptance of below-standard service provision and infrastructure. In this  respect, the Norfolk Island Government argued that: 
  …the JSC has fundamentally failed to realise the significant  differences in the model of government in Norfolk Island  from those of Australian [sic] jurisdictions. Current government structures and  procedures in Norfolk Island are essentially different, not inadequate.27 
						      | 
					    
						
						  | 1.42 | 
						  Without negating the existence of a ‘different  culture’ on Norfolk Island, the Committee can only stress the remarkable and  ongoing experience of accommodating difference – however this is defined – in a  range of remote locations across Australia. In various capacities, members of  the Joint Standing Committee have travelled extensively across Australia and  have noted the ability of governments, at all levels, to accommodate indigenous  and multicultural communities.   | 
					    
						
						  | 1.43 | 
						  Ultimately, the Committee recognises that the  people of Norfolk Island, as Australians,  should have access to the basic levels of services afforded the rest of the  nation’s population. Specifically, the Committee considers that the ageing  population of Norfolk Island should be  afforded some security and adequate access to a reasonable standard of health  care. All Norfolk Islanders should be afforded the same equality of opportunity  as other Australians in similar positions.  | 
					    
						
						   | 
						    | 
					    
						
						  Role of the Committee | 
					    
						
						  | 1.44 | 
						  The Parliament of Australia has a significant  role to play in the affairs of Norfolk Island.  It is the function of the Commonwealth Parliament to participate in developing  law and policy, to scrutinise government activity and public administration  and, to inquire into matters of public interest on behalf of all Australians. A  system of parliamentary committees facilitates the work of the Commonwealth  Parliament.   | 
					    
						
						  | 1.45 | 
						  As one of these committees, the Joint Standing  Committee on the National Capital and External Territories  is established by a Resolution of Appointment passed in both the House of  Representatives and the Senate on 18 November 2004. The Committee is appointed to inquire  into, and report to both Houses of Parliament, in an advisory role, on a range  of matters.  | 
					    
						
						  | 1.46 | 
						  Since 1993, the Committee has had a specific  responsibility to examine the Commonwealth’s external territories, including Norfolk Island. The Committee has produced nine reports  in relation to the external territories, four of which have been exclusively  focused on Norfolk Island: 
                            - Delivering  the Goods, February 1995 (Government Response, 1 December 1995);
 
                             - Island to Islands: Communications with Australia's External Territories, March 1999 (Government Response, 1   March 2001);
 
                             - In the  Pink or In the Red: Health Services on Norfolk Island,  July 2001;
 
                             - Risky  Business : Inquiry into the tender process followed in the sale of the  Christmas Island Casino and Resort, September 2001 (Government Response, 6 February 2003);
 
                            - Inquiry  into Norfolk Island Electoral Matters, June  2002;
 
                             - Quis  custodiet ipsos custodes?: Inquiry into Governance on Norfolk Island, December  2003 (Government Response, 27   October 2005);
 
                            - Norfolk Island:  Review of the Annual Reports of the Department of Transport and Regional  Services and the Department of the Environment and Heritage, July 2004  (Government Response, 23   June 2005);
 
                             - Indian Ocean Territories: Review of the Annual  Reports of the Department of Transport and Regional  Services and the Department of the Environment and Heritage, August 2004  (Government Reponses, 18   August 2005); and
 
                             - Inquiry  into the Adequacy of Funding for Australia's Antarctic Program, June  2005.
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						  | 1.47 | 
						  It is the role of the Committee to gather  evidence, through submissions and public hearings, and, on the basis of such  evidence, present sound recommendations to the Commonwealth Government. It is  then the responsibility of the Commonwealth Government to take action.  | 
					    
						
						  | 1.48 | 
						  The Committee will continue to perform its role  and would trust that individuals, or the collective, on Norfolk   Island would respect this role and seek to work cooperatively with  the Committee in the execution of its duties.  | 
					    
						
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						  Structure of the report | 
					    
						
						  | 1.49 | 
						  The report is divided into three chapters  including this introduction. Chapter two examines the state of the Norfolk Island economy and its precarious dependence on  tourism. The chapter examines the current downturn in the number of tourists  travelling to Norfolk  and the consequential reduction in revenue.  | 
					    
						
						  | 1.50 | 
						  Noting the various challenges to more sustainable  internal revenue-raising on Norfolk,  chapter three presents the only alternative left for Norfolk   Island, namely, adoption of the taxation and welfare system of the  Commonwealth of Australia. The Committee recommends that Norfolk Island be  incorporated into the taxation regime of the Commonwealth of Australia, with  special zone provisions, similar to those applying to the Indian Ocean  Territories. Underlying this recommendation is the Committee’s preference for  the Commonwealth to resume responsibility for the provision of, among other  things, social services, health, aged care, education, immigration and,  telecommunications. Commonwealth legislation should be applied to the  Territory, particularly in relation to trade practices and corporations law. The  Committee believes that Norfolk Island would  also benefit from infrastructure grants similar to those that exist in other  areas of Australia.  | 
					    
       
      
       
	    
       Footnotes
				    
                      
                        | 1 | 
                        Mr L. Johnson  (Submission No. 12), pp. 2, 9. Back  | 
                      
                      
                        | 2 | 
                        Joint Standing Committee on the National  Capital and External Territories (JSCNCET), 2003, Quis custodiet ipsos custodes? Inquiry into Governance on Norfolk Island, pp. 7-40. Back | 
                      
                      
                        | 3 | 
                        JSCNCET, 2003, Quis custodiet ipsos custodes? Inquiry into Governance on Norfolk Island, p. 25. Back | 
                      
                      
                        | 4 | 
                        JSCNCET, 2003, Quis custodiet ipsos custodes? Inquiry into Governance on Norfolk Island, p. 27.  Back | 
                      
                      
                        | 5 | 
                        Norfolk Island Government, 2004, Response to Quis custodiet ipsos custodes?  Inquiry into Governance on Norfolk Island. Back | 
                      
                      
                        | 6 | 
                        On 27 October 2005, the Commonwealth Government  tabled a brief response to the Committee’s Quis  custodiet ipsos custodes? report. The two-page response summarises the  Norfolk Island Government’s position on the Committee’s report, but concludes:  
The  Committee’s report recommends that the Australian Government reassess its  current policies with respect to Norfolk Island  and the basis for Norfolk Island's exclusion from  Commonwealth programmes and services. The Australian Government wishes to be  quite clear that it will indeed consider these and other matters as part of its  consideration of the Committee’s forthcoming report on Norfolk   Island’s financial sustainability, and is prepared to re-examine  aspects of current arrangements. Back | 
                      
                      
                        | 7 | 
                        Following the Committee’s public hearing  in Canberra on 4 August 2005, the Committee  wrote to the Norfolk Island Government, again inviting them to discuss issues  of financial sustainability. No response was received by the Committee to this  letter. Back | 
                      
                      
                        | 8 | 
                        A full transcript of proceedings is  available at: http://www.aph.gov.au/hansard/joint/commttee/J8617.pdf. Back | 
                      
                      
                        | 9 | 
                        JSCNCET, 2003, Quis custodiet ipsos custodes? Inquiry into Governance on Norfolk Island, p. 1. Back | 
                      
                      
                        | 10 | 
                        See, for example, Commonwealth Grants  Commission, 1997, Report on Norfolk  Island, p. 164. Back | 
                      
                      
                        | 11 | 
                        See, for example, Commonwealth Grants  Commission, 1997, Report on Norfolk  Island, finding 25, p. 177. Back | 
                      
					  
                        | 12 | 
                        See, for example, Mr L. Johnson (Submission No. 12); Prof. M.   O’Collins (Submission  No. 15); and Norfolk Action Group (Submission No. 24). Back | 
                      
					  
                        | 13 | 
                        Norfolk Action Group (Submission No. 24),  p. 1. Back | 
                      
					  
                        | 14 | 
                        Focus 2002 Community Update, 12 October 2002, p. 2. Back | 
                      
					  
                        | 15 | 
                        Statistics for Norfolk   Island are not collected by the Australian Bureau of Statistics. As  such, Australian population projections do not include Norfolk   Island. Back | 
                      
					  
                        | 16 | 
                        ABS, Australian Social Trends, Population,  National and state population summary tables, via: http://www.abs.gov.au, accessed 26   September 2005 Back | 
                      
					  
                        | 17 | 
                        ABS, Population  Projections, Australia, Catalogue No. 3222.0, via: http://www.abs.gov.au,  accessed 26 September 2005. Back | 
                      
					  
                        | 18 | 
                        According to Mr Michael Hehir (Submission No. 23, p. 1), the  Norfolk Island Government adopted a policy of 2 per cent population growth.  Despite such a policy, however, it appears that population projections made in  the early 1980s have not been attained. According to a report prepared for the  Norfolk Island Government in 1985, population projections estimated that permanent  residents and permit holders would total 2,440 by 2001 (and 2,833 by 2005). Mr Hehir  submitted that the population ought to be increased to 3,000. Back | 
                      
					  
                        | 19 | 
                        The Census of Population and Housing  classified the Norfolk Island population into three categories: the permanent  population, comprising ’residents‘ and those holding a ’General Entry Permit‘,  as defined in the Immigration Act 1980 (NI); the itinerant population, comprising those holding a ’Temporary Entry  Permit‘ and those either awaiting permits or not requiring permits; and tourists  or visitors to the Island. Norfolk Island  Administration, Census of Population and  Housing, 7 August 2001,  p. 2. Back | 
                      
					  
                        | 20 | 
                        Norfolk Island  Administration, Census of Population and  Housing, 7 August 2001,  p. 16. Back | 
                      
					  
                        | 21 | 
                        Mr M. Hehir (Submission No. 23), p. 5. Back | 
                      
					  
                        | 22 | 
                        Mr M. Hehir (Submission No. 23), p. 5. Back | 
                      
					  
                        | 23 | 
                        See chapter two for more details on the  relationship of tourism to the Norfolk Island  economy. Back | 
                      
					  
                        | 24 | 
                        See, for example, the assertion made by  the Norfolk Action Group (Submission No. 24, p.1), that “[o]ur remoteness has led to an innovative people  who pride themselves on their self-sufficiency…” Back | 
                      
					  
                        | 25 | 
                        See, for example, Department of Family and  Community Services (Submission No. 7) and Ms R. Menghetti (Submission No. 25). Back | 
                      
					  
                        | 26 | 
                        Mr P. Colmer (Treasury), Transcript of Evidence, 4 August 2005, p. 11. Back | 
                      
					  
                        | 27 | 
                        Norfolk Island Government, 2004, Response to Quis custodiet ipsos custodes?  Inquiry into Governance on Norfolk Island,  p. 2. Emphasis in original. Back |