The secretary to government in Norfolk Island, Peter Maywald, says they reject claims by the Australian government that the territory's current financial arrangements are unsustainable.
Earlier this week, Australia proposed to reduce Norfolk Island's power of self-government following an independent report showing that the island could become insolvent within two years.
However, Mr Maywald says they don't accept these findings and in fact Norfolk is a model for island development.
"It has developed an industry which is viable based on a low tax environment, and the assumption that Australia has made about insolvency were based on no policy changes made by Norfolk Island government. Naturally we are making policy changes to deal with short term and long term revenue and sustainability issues, so in our view we are viable, and the issue isn't about economic sustainability but about Canberra wanting to seize power over Norfolk Island."
The Secretary to Government in Norfolk Island Peter Maywald.