Norfolk's dilemma

A local businessman recently wrote about the Norfolk Island Government's apparent lack of capacity to govern and the need for Commownwealth intervention.

As life becomes more and more difficult particularly for the private sector and ultimately for the Public Service, and for those dependent on both, the expectation of the community that the Norfolk Island Government needs to make some demonstrable progress in its dealings with the Commonwealth, grows.

This is particularly the case on matters which can provide a much needed economic boost, with immigration settings to encourage population growth and a realistic program of public works being two examples of this.

Many in the private sector believe that only when the NIG can't pay its own staff, and itself, will it fully embrace the seriousness of the situation. 

Some have sought the removal of the Norfolk Island Government and the installation of a financial Adminstrator. Minister Crean has in the past stated that the community primarily needs to work to achieve change through its own elected government.

But what options are available if this fails.

Under the provisions of the Territories Law Reform Act 2010  it is possible to dissolve the Legislative Assembly if certain conditions exist.

Section 39 of the Territories Law Reform Act states;

39AC Dissolution of Legislative Assembly by the Governor-General

(1)     If, in the opinion of the Governor-General, the Legislative
         Assembly:

        (a) is incapable of effectively performing its functions; or

        (b) is conducting its affairs in a grossly improper manner;

the Governor-General may dissolve the Legislative Assembly.

The Act does not provide for an Administrator to be put in in place of the government,  merely for a new election to be called and such action begs the question; what could a new Assembly do that its predecessor couldn't?

The obvious answer is - maybe nothing,  that is assuming that the current Government/Assembly is;

• doing all that is possible in its negotiations with the Commonwealth;
• actively working in the best interests of all in seeking solutions to our problems
• fully recognising and acknowledging the urgency of the situation facing the community and utilising its human and other physical resources at peak efficiency

If the NIG fails any of the above above tests then it is reasonable to conclude that it is incapable of governing effectively either because it is oblivious to Norfolk's situation or lacks the will or the necessary competence to do the job. Then there is the matter of a serious shortfall in funding.

The community also has to consider that a new election may result in the same line up being returned and nothing would have been achieved.

This is Norfolk's dilemma, a dilemma which can't be solved by the community no matter how many votes of no-confidence are passed by this organisation or that, or how many petitions are gathered or how many letters are written.

 It also seems unlikely that the Commonwealth would act to initiate a dissolution of the Assembly.

The real power to act rests with the Assembly itself. It can force change, it can change the Chief Minister if it chooses or it can bring pressure to bear on the Chief Minister to make changes in his Executive.

If the Assembly believes that the NIG is performing well, they could choose to sit on their hands and maybe the Commonwealth, watching from the sidelines, will do the same. Either way the difficult times will continue and all we can do as a community is wait and see what happens.

Roadmap - Governance reform

The first of seven aspirational goals contained in the Norfolk Island Roadmap is (appropriately) 'governance reform' and, in particular the objective to arrive at 'the preferred model of self-government'.
It is not difficult to accept that the island's government is in need of reform. Apart from the changes bought about recently through the passing of the Territories Law Reform Bill 2010, the Norfolk Island Government (NIG) has run for more than 30 years on what is virtually the original model of self government established under the Norfolk Island Act of 1979.
Over these 30 years the world outside Norfolk has undergone many changes. A lot of these changes have affected Norfolk Island's position in the tourism marketplace, which is the lynchpin of the island's economy. As such, tourism has been contributing less and less to the local coffers but still, Norfolk's anachronistic experiment continues.
It is understandable that any government trying to manage an economy based on such a fickle industry would be tested.The NIG gains most of its revenue from taxes on goods and services consumed. As consumption falls due to tourism's decline, personal incomes decline and when people leave the island to find work elsewhere, the decline continues. For the most part, while this decline in income is occurring, the fixed costs of government and administration remain static. Without revenue raising measures that are not consumption-based, a downward financial spiral is inevitable. If consumption tax in one form or another is the only game in town, then Norfolk needs to seriously reduce its fixed costs, develop its own wealth fund to smooth out the bumps, or convince this community to accept a lower standard of living. The NIG has almost no source of revenue that is not dependent in some way or other on the tourist industry, so there can be no financial stability and no realistic goal setting without some changes. Furthermore, our government is substantially more complex and process heavy than it should be. Why is this so?
The answer to this question may have its roots in earlier perceptions as to the sovereign rights of Australia in relation to Norfolk Island and also what Norfolk Island aspired to be, some sort of micro nation.
With that issue finally put to rest in the High Court it is appropriate that Norfolk's form of government, and the range of responsibilities it has are revisited, and that the Commonwealth re-assert itself in respect of matters that are clearly national responsibilities.
Where a government fits within the Commonwealth, in the main, defines what that Government is expected to do and how it is expected to fund its operations. Now that it has been agreed that Norfolk Island will be part of the Australian Taxation system, the Commonwealth will most likely take responsibility for some activities that have, since self-government, been devolved to Norfolk Island.
Democratic process determines who sits in the Assembly. It is vital that we be as careful as possible in our choices of these people. However, the fact is that we only draw from a small pool and to expect that a sophisticated form of government can be run from the results of a popularity contest is a big ask. What we are now in a position to do is change the scope of government, the way it functions and the size and capacity of our public service.
That should be our focus: to change our system of government and the scope of our administrative activities, to get a good fit within the Commonwealth system and end up with a government more appropriate to the needs of our small population.

The future for Norfolk Island Government Business Enterprises

The Norfolk Island Government delivers a number of services to the Norfolk Island Community through entities that are described a Government Business Enterprises, these include Norfolk Air, Norfolk Telecom, Norfolk Energy and Norfolk Post.

The funding agreement recently signed off with the Commonwealth requires that;

The Chief Executive Officer must report to the Chief Minister in writing by 30 April, 2011 on options and any issues for reforming the existing business model for the delivery current Norfolk lsland Government services

Any report on service delivery would need to include the service delivery models of the GBEs and would need to establish what the ground rules for operation are, why a particular service needs to be delivered by the public sector exclusively or in competition with the private sector, the options for future delivery of that service including outsourcing, total privatisation and finally, competition policy.

The following definition of Government Business Enterprises by the Association of Canadian Chartered Accountants is useful to this discussion;

"A government business enterprise is an organization that has all of the following characteristics:

1. it is a separate legal entity with the power to contract in its own name and that can sue and be sued;
2. it has been delegated the financial and operational authority to carry on a business;
3 it sells goods and services to individuals and organizations outside of the government reporting entity as its principal activity; and
4. it can, in the normal course of its operations, maintain its operations and meet its liabilities from revenues received from sources outside of the government reporting entity.

Selling goods and services involves a direct exchange relationship between the revenues and the goods and services provided. Selling prices are related to the quantity and quality of goods or services sold, and not just to the recovery of administrative costs. Imposed fees and penalties, such as licenses and fines, do not represent sales of goods and services. Insurance premiums charged by a government organization are a sale of a service and not an imposed fee.
A government business enterprise should, in the normal course of its operations, be able to maintain its operations and meet its liabilities from revenues received from sources outside of the government reporting entity. These revenues include not only amounts from the sale of goods and services, but also transfers received from other governments or sources outside of the government reporting entity.
When determining if an organization can maintain its operations and meet its liabilities with revenues received from outside of the government reporting entity, the following factors should be considered:

1. the organization's history of maintaining its operations and meeting its liabilities;
2. whether the organization would continue to maintain its operations and meet its liabilities without relying on sales to, or subsidies in cash or kind from, the government reporting entity;
3. past, present and future economic conditions within which the organization operates; and
4. whether the organization has realistic and specific plans that show how it expects to be able to maintain its operations and meet its liabilities in the future. "

The writer's emphasis on the underlined areas of the above definition are important to any examination of the Norfolk Island GBE landscape. All of Norfolk Island's GBEs should stand or fall on their ability to survive as entities while providing a fair commercial dividend back to its owners, in this case the people of Norfolk Island. This has not been their history, but it should be their future.
Corporate governance of the activities of GBE's on Norfolk is not well provided for through the Public Monies Act and perhaps a specific GBE Act modeled on one of the mainland states Acts would be appropriate ifthe GBE service delivery model is to continue in the future.

Norfolk Islanders left like shags on the rock

In looking for an appropriate simile to describe how many in the Norfolk Island community must be feeling after Minister Simon Crean's visit, the expression "like a shag on a rock" sprang to mind. On reflection, perhaps our expectations were too great and maybe we haven't learned enough from that venerable BBC documentary series, "Yes Minister".
It was disappointing not to have seen more come out of this visit, regardless of where you stand on the issues.

Minister Crean engaged in "meaningful dialogue" and made some "frank" observations about our situation. However, there was little comfort to be gained from his views on the "way forward" and there wasn't a "courageous" decision in sight. The Minister held court over a procession of groups and individuals alternatively trying to convince him of the rightness of diametrically opposed views and yet, to his credit, he was still smiling towards the end of these contacts, and quite broadly as he stepped onto the plane to fly back to Canberra.

From the subtext of many of his statements it is clear that he has formed the view that Norfolk Island Governments, past and present, have not always governed in the best interests of the people. It is less clear what he's proposing to do about it. Following the Chief Minister's statements acknowledging that Norfolk's inclusion in the Australian Taxation and Social Security system was necessary, most of us assumed that the Commonwealth would quickly confirm that this would happen, and the how and when would emerge through discussion from this point.
The assistance package from the Commonwealth gave weight to this expectation.
I have no doubt that the Norfolk Island community was expecting something definitive from the Minister; something to indicate that the Commonwealth would act decisively in the interests of the people of Norfolk; but it didn't happen. Mr Crean, by his presence, lit the fuse and stepped back but there was no bang just pffftttttttt.

The Chief Minister, in his inimitable way, spoke of a "road map" to describe the unfolding process. In reality this process is a dog's breakfast (actually, I take that back - my dogs' breakfast is balanced, timely and designed to ensure a healthy future for them).
Where Norfolk Island sits in the Australian polity has been discussed ad nauseum in the community and in the courts. Australia clearly has responsibilities it cannot ignore.
This community is now financially distressed and there are obvious social consequences associated with this. The Minister needs to act while the people are engaged in the process and while they still have the energy and enthusiasm to work with him to turn things around. For now, though, this resilient community will do its best to get on with life.

The real test for Minister Crean's visit, and the Chief Minister's road map, will be if they can knock the swimming carnival results off the front page of the paper. It'll be close and, just maybe, the Norfolk Island Government's Chief of Staff's new puppy, Isabella, will relegate them both to page 3.

The Secret Life of NIG

Back in early December 2010 I rather ambitiously, some might say naively, made the following suggestions to the Norfolk Island Government (NIG) as a means of finding some common ground with the Norfolk Island community on the way ahead in our new arrangements with the Commonwealth;

1. Mail out to all residents on Tuesday December 7th 2010
2. Call for submissions from organizations and/or individuals
3. Closing date for input, Friday 22nd Jan 2011
4. Review all submissions
5. Tabulate all
6. Cross reference all with all current NIG policy positions
7. Explain why a particular course of action will/will not be followed
8. Provide all the above with final submissions as evidence of having considered the views of stakeholders

All of the above are pretty standard consultative procedures. At an earlier time I had suggested to the NIG that ACT Governments public consultation protocols might be a good model for the NIG to follow.
It is therefore disappointing to see that the public's involvement in the processes that presumably are taking place at the moment, has been minimal. We have had a couple of radio broadcast and a few press releases which, while they reference the fact that there are discussions proceeding with the Commonwealth, reveal little of the substance of those discussions.
Is it surprising that the NIG would conduct itself in this way? No unfortunately, it is not.
When you stop and think about the way the NIG does business it is apparent that it comprises some seriously flawed arrangements.

Much of what the NIG does is secret. There are secret Executive Member  meetings (the so called "cabinet" meetings), secret MLA's meetings, secret Airline Board meetings, to name a few. There are other secret meeting held too but I can't say too much about those as they are secret. More recently the Assembly decided that having meetings of the Assembly monthly was too hard and changed this to 6 weekly meetings. No change to the schedules of the other secret meeting though (unless this is a secret).

One interesting aspect of  these meetings is that mostly they leak. In fact, if a secret meeting of the Norfolk Island Government didn't leak, it probably didn't happen.
The secret MLA's meeting held weekly is a meeting that ought to be open to the public.
This is a meeting that discusses all manner of business and policy (so I believe). It has no role as a legislature. Public servants attend these meetings quite regularly but are sworn to secrecy. If the Norfolk Island government was a council these meetings would be public and lets face it, a council is what the NIG ammounts to and should probably be.
So how about it NIG, why don't you, from this point on, make MLA's meetings open to the public. Then maybe the records of the meetings wouldn't need to be secret anymore and It might help to restore confidence in the system.

Norfolk Island Tourism, branding doo doo

After listening to the Norfolk Island Chief Minister and the Tourism Minister on the local radio station on Friday, the objective of this post crept into my consciousness . Perhaps it was the Tourism Minister's copious use of travel industry vernacular that suggested a "call to action" demanding that I google, "is branding bullshit".

You'll have to pardon the somewhat indelicate expression, but when surfing the net, google does prefer that you call a spade a spade. A more delicately phrased search i.e. "is branding cattle excrement" produced a lot of information about the practice and effects of cattle branding,  i.e. burning a mark into the hide of a dumb animal  (Norfolk Island politicians once again "top of mind") however nothing got me as close to the heart of my question as as the more commonly used term for bull poo.
After doing my search it became apparent that this was an oft asked question to the extent that a good graphic was available and I reproduce that here  for the purpose of clarity.

There has been some discussion on Norfolk Island about our brand "the World of Norfolk" and whether it works or not and there is a lot of angst about the marketing of Norfolk Island  as a tourist destination.
Norfolk Island is a great place to have a holiday, no question, providing of course that what we have is what you want in a holiday. Check out this site Norfolk Island Holiday
Maybe the brand is getting a bad rap and maybe our problem is less about the marketing than it is about the cost of getting here, who knows. The link below leads to an interesting piece that IMHO is relevant to the local discussion.
I guess there is one thing that's clear; if you expect customers to find you, and the net is where it's at, you better be sure that whatever they put in that google line will hit on you. If Norfolk Island's web identity gets lost in the other Norfolks of this world then maybe it's like my branding excrement exercise and just not getting it done.

Anyway for an interesting disertation on "what works better in a down economy, a crackin' offer and incentive, or innovative creative that builds the brand positioning?" Follow the link
Branding %^%^%

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.