MONEY MYTHS

The media loves to portray Norfolk Island as a place where people avoid paying taxes. Some journalists like to imply that we have got away with this situation for too long, and it is about time Australia made us pull our weight. They also like to create the impression that the island is full of millionaires avoiding taxes that they should rightfully be paying to the Australian Government. This misinformation suits Canberra well, and they do nothing to dispel the myths. When Minister Jim Lloyd was interviewed on Radio National the morning after his announcement about changes in Governance on Norfolk Island, he was asked if it was right that Norfolk Island people should be allowed to get away without paying tax. He replied that the system was different here, but he did not attempt to explain that we receive very little from Australia either.

MYTH1 Norfolk people do not pay tax.
Norfolk residents do not pay income tax on money earned on the island. Most Norfolk residents do not pay any taxes to Australia, except on incomes and revenue earned in Australia (and the same applies to other countries like New Zealand, the U.S.)
Norfolk residents do pay a whole range of taxes and levies to our own government. Customs duty and Waste Management levy is charged on all goods brought into the island. We pay a Financial Institutions levy, a Healthcare levy, a Fuel levy, and all sorts of user-pays charges for registrations, licences and the like. Many people pay a Water Assurance levy (for sewerage) and businesses pay a range of levies, such as the bed tax paid by tourist accommodation owners. Our government also earns money from Government Business Enterprises such as Norfolk Telecom, the Electricity Undertaking, the Post Office, the Liquor Bond, the Lighterage Undertaking. Visitors and locals alike pay a departure tax. There probably ways we can spread the tax base more widely, and we are working on that. We are quite prepared to look at ways of contributing more to the running of the island...but we want that money to go to our own Government, not to Australia!

MYTH 2 Norfolk residents get special treatment from Australia.
Norfolk residents do not receive social services from Australia...no pensions, no baby bonus or family allowance, no student allowance, no childcare subsidies, no dole, no disability allowance, no business, training or employment subsidies, no Medicare, no pharmaceutical benefits.
There would be a handful of people receiving a Veterans pension, and rightly so. Likewise there are some people who have qualified for an Australian pension after a lifetime of paying Australian taxes.
We pay totally for our own Health services and hospital, and for our Education system. There is a locally-funded pension and special allowance for those who need it. We pay for our own roads and other infrastructure.We pay for our own Public Service.
Australia used to help us out with medical evacuations, using the R.A.A.F, but no longer does provides this neighbourly facility.
We are remarkably self-sufficient and independent, and want to remain so.

MYTH 3 Norfolk Island is a tax haven for millionaires
If my reading of property prices on the mainland is any indication, millionaires are a dime a dozen nowadays. There may well be a number of them living here. It is hard to tell, because we do not see any ostentatious mansions or lifestyles, nor does anyone drive a really classy car (except for one or two eccentrics!) The better-off people here are often still working hard, and pulling their weight in the community.
They are certainly not avoiding tax. Any money they are earning in Australia or New Zealand is being taxed in those countries. Norfolk as a tax haven is well and truly a thing of the past. Those who exploit taxation loopholes have all gone elsewhere.
Of course, there may be a few people who, through enterprise, hard work and good investment have made a million here on Norfolk Island. I say "Good luck to them." They do not owe Australia anything!
I believe the myth about rich people exploiting the island comes from people who would like you to think there is a class structure here. Norfolk is a remarkably egalitarian place, offering opportunities for all.
In future posts, I will deal further with Norfolk's financial relationship with Australia, and with our own Government's financial situation. There will be still more myths to be laid to rest.