Spending cuts to add to Norfolk Island's economic woes

Transcript

The Norfolk Island government is looking to slash its spending and cut jobs as the economy remains in the doldrums and Australian funds remain tight.

The isolated community's tourism-dependent economy is still in a slump and there are fears an already suffering community will suffer further.

Sally Round reports:

Australia's allocation to its territory of just over US$5 million in funds for the coming year came as a pleasant surprise to the local government. But Norfolk's finance minister, Tim Sheridan, says it is still about $2 million short and spending needs to be slashed by 15 percent across the board. He says that could mean job cuts among the 180-strong government workforce in order for vital infrastructure works to be carried out.

TIM SHERIDAN: It could affect health, it could affect tourism, it could affect our policing on Norfolk Island, it could affect our education, because the cuts will be across the board. People will find themselves without work, unfortunately.

Eve Semple who is the chair of the Social Welfare Advisory Group says the funding allows Norfolk to move forward even if it is at a snail's pace. She cites problems like more people getting into debt and making cutbacks to make ends meet.

EVE SEMPLE: And you hear of people reducing their medication just to make it spread out over a longer period of time. And people are also thinking twice whether to go to the hospital or not. At $47 to see the doctor, you definitely think twice whether you go or not.

Ms Semple says, over the last two years, lost jobs and low wages mean dozens of families are split months at a time as breadwinners head to Australia to work.

EVE SEMPLE: We've got one counsellor on the island and his load a month is exceedingly high. His issues range from financial to relationship to mental health to substance abuse.

Ms Semple says the community is being neglected and that needs urgently addressing. The new funding includes $1 million for aged care assistance, child welfare and apprenticeships, and brings some certainty to the island's economy for the next year. But the long-term future of the island hangs in the balance. Australia and its territory agreed on a road map for the island two years ago to ensure it had a sustainable economy. Australia's Territories Minister, Catherine King, recently expressed concern that the new local government did not appear to be committed to the reform envisaged. Norfolk's Chief Minister, Lisle Snell, says Norfolk Island is committed, but contentious issues remain like changes to immigration rules to boost the population, which he says locals feel they weren't fully consulted on.

LISLE SNELL: Particularly in immigration, immigration has been relaxed for both Australians and New Zealanders to come here to live on Norfolk Island. They can buy businesses, they can become residents virtually immediately if they want to. If you have people coming over here on a one-way ticket on a limited income with no health insurance, that's our greatest concern at this time.

Lisle Snell says increased immigration won't improve the island's economic sustainability in the short-term and may put stress on limited social services.

LISLE SNELL: The only say that we've got to get this island back in a self-sustainable mode is by tourism. We've got to increase our tourism numbers from around 24,000 to 26,000, where it stands at the moment, up to 36,000 to 40,000.

Mr Snell says checks and balances will be brought in around the new immigration rules, but it's yet to be proven they'll bring the much-needed boost to the economy.