Norfolk’S Income

The tourist industry enables Norfolk Island to balance its official budget. The island also earns a handy income from the sale of postage stamps to collectors and from company fees.

Norfolk’s budget for the financial year to June 30 last is fairly typical. Norfolk earned $2,020,732 and spent $1,782,386.

Major items of revenue, in round figures: sales of stamps $550,000; customs duty $472,000; company fees $237,000; liquor bond $233,000; motor registration fees and licences $73,000; departure tax $35,000. The

Australian government grant was $126,000.

Major items of expendi ture; administration $704,000; education $290,000; repairs and main tenance $251,000; health and welfare $250,000.

There is no income or company tax on Norfolk Island and duties on export goods are low with many goods duty free. The duty on cameras and photographic equipment for example is 8%, on clothing and footwear 5%, building materials 5%, watches 17%, electrical goods for the kitchen 5%, radios, re corders, records and tapes 8% jewellery 10%, motor cars 15%.

The Norfolk administrat ion gains in two ways on

liquor. It applies a duty and

then makes a profit on sales because it is the sole importer of liquor on the island. Most dutiable goods, including liquor, leave the island again with the tourists.

Although the boom days of company registrations are past, Norfolk still earns con siderable revenue from company fees. It charges $350 for incorporating a company and a filing fee of $3OO for the company’s annual return. As at September 30 last, 1066 companies were registered on the island, an increase on the figure for the previous year but below the record of 1571 companies in 1971. Most companies registered at that

time are defunct either abandoned or liquidated, having served their purpose.

The companies were formed because Norfolk Island was used at that time for tax avoidance on income actually earned elsewhere. After millions of dollars in tax were lost to Australia, Canberra closed the major loopholes in 1973.

Companies continued to be registered on the island be cause it is still possible to arrange tax minimising schemes, particularly estate planning, because of the absence of gift, stamp and estate duties. The govern ment doesn’t plan to make any more changes to the tax laws so this is likely to con tinue.