Preliminary Pages

Chair’s foreword

Australia’s Indian Ocean Territories (IOTs) of Christmas Island and the Cocos (Keeling) Islands share the economic and social challenges posed by isolation and remoteness. The economies are defined by their limited industry and heavy reliance on the public sector for service delivery.

The main industry supporting the Christmas Island economy is currently phosphate mining, but the committee observes the growing consensus that the tourism sector has been identified as the critical sector with the greatest growth potential for going forward. The committee has also considered the economic impact of the Christmas Island Immigration Reception and Processing Centre. The economy of the Cocos (Keeling) Islands relies solely on a services industry predominantly consisting of the Government and tourism sectors.

Compounding these economic challenges, residents and business have limited access to: affordable, reliable and modern information communication technology such as internet services, digital television, radio services and telecommunications; and frequent and reliable transport and freight.

On Christmas Island, tourism is expected to fill the gap that will be created by the winding-down and eventual ceasing of phosphate mining, while providing an alternative economic driver, spurring complementary industries and moving the economy towards greater sustainability. On the Cocos (Keeling) Islands, growth in tourism would have a similar economic effect and provide a much needed boost to local employment opportunities. However, critical to growing tourism is the need to upgrade and invest in additional tourism infrastructure such as accommodation, hire cars, roads and the like.

Through this inquiry, the committee sought to examine the issues associated with economic development in the context of the service delivery of communications, transport, housing, the operation of business and preparations to deal with the impact of climate change. During the inquiry, several solutions were canvassed in each area examined.

The committee focused on how communications, internet services and mobile telephony were delivered. To improve internet delivery and access, options identified were either upgrading the satellite link to the IOTs, or accessing cable if and when it is laid. Improving mobile telephony was found to be more complex as the service available on Christmas Island is limited and the service available on the Cocos (Keeling) Islands is prone to failure. New infrastructure will be needed to implement an efficient, reliable and affordable mobile telephony service.

The high cost and unreliability of freight and passenger services have remained major areas of concern for the IOTs. As outlined in previous reports, the committee found that options to improve the service delivery of these, in the short term, rests with the Government through subsidies and infrastructure investment.

Another major issue highlighted was the limited land made available for commercial development and investment. The committee received evidence that several developers may have lost interest in investing in the IOTs because of excessive bureaucratic processes involved in receiving development approval. The committee found that investment in the IOTs is critical to growing the economies and has recommended the development of a land release and development strategy to stimulate the local construction industries.

The social impacts accompanying the economic challenges facing the IOTs relate to a diminishing IOTs population, limited contact with the mainland and the wider Australian society. The IOTs shires are focusing on addressing the decreasing population by mainly targeting the youth segment that is leaving the IOTs in search of greater educational and employment opportunities. The committee believes that by improving economic diversity that the economies of the IOTs would be better able to sustain their communities into the future.

As issues associated with governance were the major focus of the previous committee’s 2006 report entitled, Current and future governance arrangements for the Indian Ocean Territories, the committee has through this inquiry sought to include only where relevant, governance issues which impact on economic development or have implications for stimulating investment.

On behalf of the committee I would like to thank individuals and organisations who contributed to the inquiry. I would also like to acknowledge and thank those who generously assisted the committee during its visit to Christmas Island and the Cocos (Keeling) Islands for this inquiry.

Senator Kate Lundy

Chair

Membership of the committee

Committee secretariat

Terms of reference

To inquire into and report on the changing economic environment in the Indian Ocean Territories giving consideration to current arrangements, barriers to business development and future need with regard to:

a.                      communication services such as broadband internet, digital television and mobile telephony;

b.                      transport services and costs including passenger and freight transport;

c.                       Commonwealth Government services and programs;

d.                     the operation of businesses in the region;

e.                      cost and availability of housing; and

f.                         the impact of climate change.

List of abbreviations

List of recommendations

3       The economic environment of the Indian Ocean Territories

Recommendation 1 (paragraph 3.50)

The committee recommends that the Shire of Christmas Island in partnership with the Christmas Island community and relevant stakeholders examine ways to diversify the local economy, with a focus on developing tourism as part of its economic strategy in response to the possible permanent closure of the Christmas Island phosphate mine.

In addition, the Attorney-General’s Department should provide adequate funding for secretariat support to the Shire for this purpose.

Recommendation 2 (paragraph 3.83)

The committee recommends the Government provide funding for economic modelling to be undertaken on the impact on the Christmas Island economy of activities associated with the operation of the Christmas Island Immigration Reception and Processing Centre and make this information available in a public report.

Recommendation 3 (paragraph 3.114)

The committee recommends the Shire of Christmas Island and the Attorney-General’s Department coordinate a program of price monitoring for the Indian Ocean Territories.

Recommendation 4 (paragraph 3.115)

The committee recommends the Minister for Home Affairs take measures to ensure Corporations Law is applied to the Indian Ocean Territories as soon as possible.

Recommendation 5 (paragraph 3.116)

The committee recommends that Government agencies sourcing goods and services from businesses of the Indian Ocean Territories ensure payment of accounts within 30 days of the receipt of invoice.

Recommendation 6 (paragraph 3.117)

The committee recommends that arrangements be progressed as far as possible between the Attorney-General’s Department and the Government of Western Australia to place a health and safety inspectorate on Christmas Island.

Recommendation 7 (paragraph 3.118)

The committee recommends that the building codes currently applied to the Indian Ocean Territories be reviewed with the aim of making them more suitable to the physical environment and climate.

Recommendation 8 (paragraph 3.172)

The committee recommends the Government provide funding to the Shire of Christmas Island and the Shire of Cocos (Keeling) Islands for the establishment of local economic development officers.

Recommendation 9 (paragraph 3.173)

The committee recommends that: