Norfolk Island's Tourism based economy should brace itself

The downward trend in Norfolk Island's tourism numbers is likely to continue as part of the fallout from the Aussie floods. 
Norfolk Island traditionally draws most of its Aussie tourists from the Eastern states and a good percentage of these from regional areas that will be in recovery mode for the next two years. The New Zealand market likewise,  is unlikely to recover given the strength of the $A and other domestic issues. Virgin Blue pulled domestic services out of NZ in October and lost $A15 million last year confirming that the trans Tasman route is extremely competitive and that Kiwis are being very price conscious  travellers.

Let's accept for the moment that the GFC was partly responsible for a 25 percent decline in tourism numbers to Norfolk Island since 07/08 while noting that compared to the rest of the world, Australia was cushioned from the real impact of the GFC largely due to our resources boom.
Then consider that our tourist catchments have had a catastrophe which will require a re-construction effort being described as "of post war re-construction proportions" and that many of the people effected had inadequate or no insurance cover.

There are so many factors working against Norfolk Island at the moment that it is impossible to predict what the impact will  be but a decline in visitor numbers for the last 1/2 of the current FY in the order of  25% is a distinct possibility.

The Commonwealth granted Norfolk Island $3.9M in December 2010 to fund 6 months of essential services including Education, Public Health, Law and Order, Telecommunications Electricity Reticulation and Financial Management Systems. That  grant covers NIG core responsibilities. It will allow the NIG to continue  to run Norfolk Air albeit at a substantial loss.
Norfolk Air's losses will accumulate at an even greater rate in 2011. As business falls off and GST revenue dries up, working hours for employees will be reduced even more. Against this backdrop the Commonwealth and Norfolk Island Governments need to plot a way ahead for Norfolk.

Norfolk Island will need a minimum of $10m from the Commonwealth just to keep its head above water in 2011/12. That's $3.9 X 2 ( the 6 month package doubled for a year), and $2.2m to cover the increasing losses on Norfolk Air (which won't be enough)  
Perhaps the Tourism Minister can shine a light down this increasingly dark tunnel.

At some stage the NIG is going to have to make some realistic assumptions about visitor numbers for FY 2011/2012 as tourism volume underpins all budget forecasts. 
Lets hope we'll see some honesty when they do this. Maybe we will this time because, while we have become accustomed to the former Chief Minister and current Tourism Minister gilding the lily on the assumption that the good people of Norfolk Island should be shielded from the truth, the Commonwealth will not be so forgiving of the NIG if it proves incapable of coming up with realistic projections.