SOME SCARY STORIES

For those who think that the changes Australia wishes to make on Norfolk Island amounts to little more than paying a bit of income tax and collecting an old-age pension should think again.
We are beginning to hear many stories from people who have had experience of living, working and doing business in mainland Australia, and most of them have no desire to return to that sort of regime.

Running a business on a small island with a market of fewer than 2000 people, plus just a few hundred tourists at the best of times, is not easy, but at least you do not have to expend large amounts on book-keepers and accountants. If you run a business under the Australian tax regime, you will need a huge amount of paperwork, and you will need to keep it all properly stored for 5-7 years! An auditor can ask to come and go through your books, your invoices, and your receipts at any time, and they will be prepared to follow the "paper trail" of even a $5 item not only through your books but your supplier's books! You will be fined for any small mistake you make in declaring your income.
Now if your business has not been doing so well, but they decide you are telling porkies to hide something, you will be assessed on an "industry average". (I am starting to feel that everyone under the Australian system has to be average-or else!!) The onus of proof is on you!
Even if you are scrupulously honest, the stress factor is enormous. As someone said "Big brother is watching you for the rest of your life."
Even a simple tradesman is subject to the same scrutiny and accountability. Your workplace and tools can be inspected at any time, and if your tools do not carry the appropriate tag saying they have passed inspection, you are in trouble. Charge-out rates on "the mainland" for tradesmen and professional services are generally about triple those on Norfolk Island, because they have to factor in all the business taxes, indemnity insurances compliance costs, O.H.&S. costs, plus the higher wages to compensate for income tax.
If you try to run a business under the Australian regime, you will not only have to deal with Company tax (30% on profit) and income tax payments for yourself and your employees, there will be compulsory superannuation deductions, stamp duties, payroll tax, fringe benefits, business insurance premiums, a complex system of Workers' Compensation and Public Liability. A small business in Australia is classified as one with a turnover of less than $2 million, or fewer than 100 employees. So none of our businesses here would even register on the Richter Scale, and Australia would probably see them as unviable anyway.
The business owners would not be the only losers. We would all lose out.
Not only would we lose out on the availability of the goods and services from those who do not survive, but we would pay much more to those who do manage to keep going in business.

The same scrutiny that the Tax Office applies to businesses is also applied to Welfare recipients by Centrelink...but that is another story!

Meanwhile, to find out how our low tax base enables us to enjoy facilities and professional services that would normally be unavailable to a community of this size, I urge you to read John Kelly's submission to the Grants' Commission. You can find it on the NAG Website.
http://www.nagnorfolk.com/