Norfolk Island Reforms

Media Release
04 December 2014

Through listening to community discussion I have learnt many things. My commitment has been to keep the conversation going as we build community collaboration for the future well being of all residents in this community.

I have been asked to provide more information about proposed reform. This week I released a Fact Sheet detailing the Australian Government commitment to introduce federal tax, social security and Medicare to Norfolk Island. Another Fact Sheet details a possible model for a local government type body as recommended by the recent Joint Standing Committee Report.

It is clearly important, new and transitional governance arrangements must be agile and robust to ensure local views and aspirations are fully engaged.

Extending federal tax and social security to Norfolk Island will have an overwhelmingly positive impact for residents and the local economy. Research suggests the social security system would provide about $4.9 million in additional support to families and individuals on Norfolk Island each year.

A key part of social security is a safety net to support the most vulnerable, including payments for people with a disability and their carers.

Overall, the Norfolk Island community would receive far more in social security benefits than it would pay in taxes. The extension of these systems is estimated to improve economic growth on Norfolk Island and increase household consumption.

This means Norfolk Island households would have more money to spend, boosting local business and employment.

Unlike the Norfolk Island health levy, Medicare begins subsiding health costs immediately without having to reach a threshold. To partially fund the costs of providing Medicare, the Australian Government charges a Medicare Levy of 2% of taxable income through the tax system. This means someone earning $29,000 would pay about $580 per year.

The Medicare Levy would replace the Norfolk Island health levy of $1,200 per year. Low income earners and seniors may not have to pay the Levy if they meet certain conditions.

As part of the transition to new arrangements, it will be possible for you to speak privately and directly to Australian Government officials about your own personal situation.

Feedback and comments are needed by Friday 12 December 2014 so I can report views collated from the consultation process to the Assistant Minister.

His Honour the Hon. Gary Hardgrave