Sunday, November 09, 2008
AND SOME BUSINESS SENSE
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.
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.