NIRC recently completed the Annual Economic Update and Strategy Outlook (AEUSO) for 2024. This is the second AEUSO in the series, following its commencement in 2023.
The AEUSO reports on the gross territorial product (GTP), government activities, the latest tourism data, and new investment opportunities and developments for Norfolk Island.
The 2024 AEUSO found that the Norfolk Island economy is strong and growing, and economic conditions have improved over the last 12 months since the first AEUSO.
Key economic metrics for Norfolk Island are stronger than mainland Australia’s: inflation and unemployment are lower, and economic growth is higher.
Norfolk Island has made big advances in the last year to reduce cost of living pressures, bringing price inflation down rapidly during 2023. The annual inflation rate on Norfolk Island for 2023 was 1.25% compared with 11.09% in 2022. The decline in inflation during the year has substantially eased the cost-of-living pressure.
The estimated size of the Norfolk Island economy in FY2023 was $146.7 million, which has grown faster than the Australian economy since the change of Norfolk Island’s administration in 2016. Between FY2014 and FY2023, the estimated real (inflation-adjusted) average annual gross territorial product (GTP) growth on Norfolk Island was 4%, higher than the Australian real yearly GDP growth of 2.4%.
Tourism numbers have been strong and contributed to economic growth. Tourism continues to be Norfolk Island's main economic activity; in FY2023, the number of tourists reported was 32,232, and they contributed $53.5 million to Norfolk Island’s GTP in FY2023. This represented around 36.4% of economic activity. The number of tourists for the calendar year 2023 (between January 2023 and December 2023) was 30,918. However, tourism numbers are slightly lower than FY2023 as alternative international destinations open up post-pandemic.
Key activities and investments during 2023 included the development of an asset management strategy, sea freight support, exercise Talisman Sabre, and a business case on a trail system for walking and mountain biking.
The Council, which is responsible for a large and diverse asset base, developed an asset management strategy for Norfolk Island in September 2023. The Council’s capital works budget for the forthcoming financial year is $18 million, $4 million higher than the previous financial year. More than 40% of this capital budget has been allocated to improve digital connectivity and reliability by uplifting telecommunication satellites. Plans for investment in two new purpose-built cargo transfer vessels (CTVs) to better support Norfolk Island’s sea freight needs are underway.
Norfolk Island's electrical power network is transitioning to an innovative green energy ecosystem, which will increase renewable energy penetration, enable the electrification of equipment and vehicles, ensure network stability, and allow access to cheaper electricity once completed and commissioned. The outcome of these work activities is expected to decrease electricity prices by up to 40% and bring Norfolk Island closer to its 100% renewable energy aspiration.
NIRC has substantially improved in efficiently managing Norfolk Island’s waste and recycling activities and reducing landfill waste.
NIRC has been the subject of various reviews over the last four years, and it is working to meet the external audit suggestions to improve the governance and fiscal sustainability of Norfolk Island. NIRC forecasts a small operating surplus for FY2024.
NIRC and the private business community continue collaborating to grow the economy actively. This is coupled with a strong pipeline of capital projects funded by the Australian Government and the Council and industry efforts to diversify economic activity.
