Taxation System for Norfolk Island 2012

I rise to talk about Norfolk Island, which is part of the electoral division of Canberra. In particular, I want to talk about the benefits that Norfolk Islanders are missing out on by not being part of the Australian taxation system. For the record, Norfolk Island is part of the Commonwealth of Australia, but it is a self-governing external territory.

The issue of Norfolk Island's status and its decision to remain outside the Australian tax system, I believe, deprives the residents of this beautiful and historic island from many benefits that other Australians enjoy. There is an assembly in Norfolk Island that oversees the island's affairs, but the 1,500 or so residents who live there do not pay Australian income tax. This is a historical legacy, but the Norfolk Island government has passed a motion showing its willingness to engage in changing this. Understandably, the Norfolk Island community wants help. I understand its issues, as I have been there many times now since I was elected to be the member for Canberra—I think it is six or seven times—and I am staunchly supportive of ways to help Norfolk Islanders.

The Joint Standing Committee on the National Capital and External Territories, of which I am a member, is well aware that the Norfolk Island economy has declined between 2006 and this year. Economic activity was down 24 per cent on the previous year. About 40 per cent of shops on the island have closed. There has been a decrease in the population of about nine per cent. Mike King, the ALP member of the assembly, has described the situation on the island as one of 'uncertainty'. There is uncertainty because Norfolk Island has reached something of crossroads.

The Minister for Regional Australia, Regional Development and Local Government, Simon Crean, and I visited Norfolk Island together, and we talked with the residents there about what they need. But, as Minister Crean has said about the demands of Norfolk Islanders for Medicare services and access to the PBS:

They should have thought about that some years ago when they were resisting joining the tax system. These things can't be switched on and off overnight. They've always known that their own health system is unsustainable. I am prepared to work with them, but … It has to be part of a comprehensive package.

As part of our commitment to Norfolk Island, the Labor government have already provided $14.1 million in assistance. This includes $2.9 million in emergency assistance to support public health and welfare and energy supply and $11.2 million to terminate the contract with Air Nauru.

In the May budget, the Labor government focused on key areas of economic development, public sector governance, community wellbeing and environmental management. We provided funding for many initiatives, including measures to assist with a review of hospital services, the development of a strategic plan, funds to improve tourism, and measures to address pest and disease control.

I am actively involved in working with Norfolk Island to find solutions. I see a willingness and acceptance by most residents that steps need to be taken to help the island while it is experiencing difficulties. I see evidence that islanders want to work with the Labor government to address some of their historic problems. The federal Department of Regional Australia, Local Government, Arts and Sport has already been working for some time on governance and taxation models for Norfolk Island, and earlier this year a representative from the Australian Taxation Office was on the island to discuss various governance models.

I know that many islanders are concerned about preserving their cultural heritage while finding ways to keep the population stable and economically viable. There is, however, a group of Norfolk Islanders who say they will find solutions to their own problems. They do not want the Commonwealth to help them out and deliver the services that all other Australians can access. But, as Minister Crean has rightly said, a solution cannot be based on the islanders simply demanding that the Commonwealth gives them every benefit and service without Norfolk Islanders contributing to our tax system.

Most Norfolk Islanders do have an appetite for reform and an appetite to participate in systems that deliver net benefits to their community. I see on Norfolk a genuine desire to improve their health and mental health services. Currently there is no resident psychiatrist on Norfolk, and there are no other proper services to treat people affected by mental illness. This is why many islanders are saying that they want a health system and they want access to Medicare and the PBS. They want access to the new initiatives in mental health care and dental care, such as the $2.2 billion mental health care package. Norfolk Islanders also want access to aged-care provisions and the other health services that our government has created to assist Australians in need. We have also delivered a range of programs for families.

In terms of the situation on Norfolk Island, I am committed to working through the issues and finding ways to assist the local residents of this island, but the fact is that, to access the health system and other components of government services, Norfolk Island needs to be part of the Australian tax system. I look forward to continuing to work with the people of Norfolk Island to help them overcome historic and current issues.

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