AND SOME BUSINESS SENSE



If you were driving through the Australian outback, and came through a small township with just a few hundred people, it is not likely that you would actually stop unless you needed a comfort stop, ot there was a well-known tourist attraction, or you were visiting someone there.

Many of these small towns are struggling, and are losing more and more businesses, services - and jobs - each week.

Now Norfolk Island is a remote community, with just 2000 people, and boasts a wide range of businesses and services and retail outlets that would be the envy of many a country town with a much larger population!

I do not have a well-developed head for for facts and figures myself, but we and various members of our family are involved with business here in areas such as Tourism, Retail, and Trade and Manufacture, and we have a fair idea of how things work.

In recent years, particularly after self-government, our business sector has grown, and the need to travel to or order from the mainland has decreased dramatically. We hardly feel like a remote location, because there is so much available to us here.


One of the reasons is a strong spirit of enterprise among those who call the island home.

Another important factor is the low tax base.

Although a recently imposed G.S.T. has imposed a modest additional burden with costs and paperwork, this has not been a major change in the retail area, because it has replaced a previous customs duty on goods for re-sale. It has however, meant a new tax on services, but the transition has gone smoothly, and most folk have recognised the need for a broader based system of revenue raising.

Charge-out rates for tradesmen are still usually less than half of what you will pay in Sydney or Brisbane or Auckland. Wages are lower too. Absence of business taxes, and freedom from the restrictive and costly regulations and paperwork experienced on the mainland means that many small businesses can operate viably in this small community.Looking from outside one bank towards the other. How many small towns still have the services of even one bank??

Many will tell you that "freight is a killer," but that would be true of any place a long way from the source of supply, and most of us accept that this adds to the cost of many basic items, particularly the more bulky items like household goods and building materials and many foodstuffs. Infrequency of shipping services also means that storage and warehousing adds to the cost of goods to a degree. But we cope with this because of the convenience of having these things available to us most of the time.
Our government hopes that a harbour will help with the freight problem, because much of the cost arises from the fact that a ship often has to wait around until the seas are suitable for unloading. A harbour may be a long term project, but most business people see it as a necessary investment in a sustainable future.

Port facilities are, in fact, an area in which the Federal Government could assist if they genuinely wanted to give us a bit of help to help ourselves and ensure our longterm economic viability.

So what would change if we were integrated into Australia's economic system and tax and welfare regime?

Well for a start, business and company taxes and regulations would greatly increase the cost of doing business. And income tax would mean that much higher wages would need to be paid to employees to compensate them.

Most tradesmen here agree that charge-out rates would at least double.

Their services would be less affordable to their customers, who would already be coping with having a chunk taken out of their wages in income tax.

Similarly, goods in retail outlets would become more expensive. That would happen even without us coming under Australian Customs and losing our "duty free" status.

Australian O.H. and S. regimes would make our lighterage and cargo handling system incredibly costly, even though we currently boast a very proud record of operating safely over many decades.

The long and the short of it is that many businesses would close their doors. They may only have enjoyed modest returns up until now, but were hanging in there because of the pleasant lifestyle here. Many professionals and tradespeople would take their skills elsewhere. You would not only lose their services, but the money they put into the community.

Some may stay - but only if they could find another source of income, which is doubtful in an environment where the cost of employing people was rapidly increasing.

In order to remain viable, many businesses would "rationalise" and the first step would be reducing staff.

Some of the smaller operators would be swallowed up by the bigger ones who could operate at a more efficient level. Once again, this would mean fewer jobs, but it would also mean a loss of choice for the customer, with all the disadvantages of a monopoly situation, and loss of competition.

It is beginning to sound unhealthy, isn't it?

We now describe a situation where a lot of people have lost their jobs or businesses. Some will move away, and once again there is less money circulating in the community. Some will stay, but will need unemployment benefits. This will be a help, but does not pay for the extras which have given us a good standard of living here until now.

I have not even mentioned our tourist industry.

Visitors will also have to pay a lot more for their accommodation, their hire cars, their tours, and what they buy in the shops, and we will eliminate a big section of our present tourist market. We will also have taken away the range of choices they have, and we will seem a far less attractive place to visit.

And so the downward spiral will continue, and we will become more like that a small country town in its death throes.

So what if I am just starting a "worst-case scenario"?

Should we be forced to take the risk? Shouldn't we have the benefit of a properly conducted economic impact survey, such as the one conducted by the previous Federal Government, the results of which they refuse to release to us or even to the current Federal Government???

We understand that Treasury told them that integrating Norfolk Island into the Australian system will be very costly to Australia, but they seem to be happy to spend it in the name of "equity for all Australians" whatever that means.

Do they think the cost to us does not matter? We will always have the dole and family benefits and other subsidies to see us through, but they will have destroyed a hardworking and thriving community that has operated successfully and sustainably without those things up until now. They will have taken away a quality of life and standard of living that many envy.

Why not send a team to study how business works here in a low tax, low regulatory environment and take that model to their own small remote communities, dependent on welfare and subsidies and rescue packages and grants.

Yes, we do have problems. We do feel the pain of the global financial crisis and economic downturn. We do have a heavy dependence on a tourist industry that is somewhat in the doldrums. But we are survivors. We know how to live simply and sustainably. There are many ways in which Australia can help us, but taking away our ability to help ourselves is not one of them.