Norfolk Island is, legally speaking, part of Australia . But running a business in this remote Pacific territory, home to around 2,100 residents, can be very different from on the mainland.
Author
- Rod McNaughton
Professor of Entrepreneurship, University of Auckland, Waipapa Taumata Rau
Government forms can reject local telephone numbers and banking services can be difficult to access. Even routine changes to internet services can leave businesses disconnected.
This speaks to its geographic challenges - Norfolk lies some 1,500km from the Australian mainland - as well as some unique complexities stemming from its unusual political and administrative history .
In 1856, following the closure of its British penal settlements, Norfolk became home to descendants of the HMS Bounty mutineers and Tahitians from Pitcairn Island. The Pitcairn community brought its own traditions and governing practices, which helped shape Norfolk's distinctive identity long before it became an Australian territory in 1914.
Norfolk gained a substantial degree of self-government in 1979, before Canberra abolished the arrangement in 2015 . Australian taxation, employment laws, Medicare and social security followed, bringing benefits alongside new obligations. The island's regional council has been under administration since 2021, while disputes over its governance continue.
Now, a new survey of Norfolk Island businesses examines the difficulties they face, from freight and insurance costs to navigating laws and commercial systems designed for mainland Australia.
An unusual economy, under pressure
The Business Council of Norfolk Island received responses from 103 of 239 businesses contacted, with nearly half reporting worsening conditions over the past year. Long-established businesses were particularly affected, with 27 of 42 reporting deterioration, compared with four of 21 established in the past three years.
Freight was the biggest concern, identified by 70% of respondents who answered the question, followed by insurance at 45%. Other concerns included visitor spending, telecommunications and air services.
Norfolk has no conventional deep-water port. Cargo ships anchor offshore while cranes lower goods into smaller vessels, known as lighters. These shuttle to the pier, where freight is lifted ashore. Heavy seas can interrupt unloading, while biosecurity requirements complicate imports.
New Commonwealth-funded cargo-transfer vessels have been introduced, but freight still requires specialised handling. Changes to shipping connections with New Zealand have complicated supply arrangements, while air freight provides a more frequent but expensive alternative.
Businesses must plan orders around shipping schedules, allow for delays and find alternative supplies when deliveries are disrupted. While some costs are unavoidable, managing these disruptions takes considerable time and effort. Other difficulties arise from government and commercial systems that don't accommodate the island's circumstances.
Norfolk's five-digit telephone numbers don't always fit online forms designed for mainland Australia. A 2023 parliamentary inquiry heard of online forms rejecting local numbers, including during Australian Business Number applications.
Two-factor authentication creates further problems when banking and software services cannot send verification codes to local numbers. Some businesses maintain separate Australian mobile services simply to access everyday services.
Even the island's postcode, 2899, is assigned to New South Wales by Australia Post , although Norfolk is legally an external territory, creating confusion in commercial systems.
Last month, local users reported Starlink services being suspended following an apparent change in how the company recognised service locations, disrupting businesses reliant on satellite internet.
The incident illustrates how a seemingly minor change in a global provider's systems can have significant consequences for an isolated community, leaving local businesses to resolve problems they had no part in creating.
The burden of changing rules
Norfolk's older businesses developed their practices and commercial relationships under different taxation, employment and administrative arrangements. Newer enterprises have operated within the post-2016 system from the outset.
Established businesses may therefore face additional costs adapting longstanding arrangements to newer requirements. This could help explain why older businesses reported worsening conditions more often, although sector, size and market conditions may also play a part.
Norfolk's legal arrangements add another complication. Businesses operate under a mixture of Commonwealth law, selected state legislation and laws retained from the former Norfolk government. Determining which requirements apply can require specialist advice that's difficult to obtain locally.
The latest survey found a similar divide between employers and sole operators. Among respondents, 41% of businesses with employees reported adverse effects from laws, regulations or policies, compared with 7% of sole operators.
Employers must manage payroll, workplace conditions, safety and reporting obligations. These provide important protections, but compliance requires time, resources and expertise that can be difficult to access on the island.
My current research examines how Norfolk Island businesses have adapted to the governance changes introduced a decade ago.
Businesses must plan around uncertain freight deliveries, navigate overlapping legal requirements and find ways to use digital systems that don't always recognise where they operate. These efforts keep businesses running, but take time and money away from serving customers, improving services and growing their operations.
Norfolk Island illustrates a problem facing other small and remote communities. National and global systems can work efficiently for millions of people while leaving those outside their assumptions to resolve the exceptions themselves.
For Norfolk's businesses, the difficulty is not simply operating far from the mainland, but the additional time and resources needed to make those systems work.
Rod McNaughton received funding for this research from Juncture: Dialogues on Inclusive Capitalism, a research centre within the University of Auckland Business School.
