The Norfolk Island Regional Council (NIRC) engaged DeltaPearl Partners (DPP) to reinstate the Gross Territorial Product (GTP) calculation for Norfolk Island.
The last GTP calculation was completed in 2019 for the FY2016 year. This report is the first step in reinstating the annual GTP calculation, where DPP estimate the 2022-23 GTP.
Understanding GTP's value and trend is an important economic indicator to help manage and advance policymaking in any economy.
GTP is an estimate of the economic activity in a given region and can be used to approximate the welfare of households using GTP per capita. When disaggregated by industry, it can help understand the relative ‘specialisation’ of regions and the role of various industries in an economy.
While most of Australia’s regions benefit from having up-to-date assessments of their local economic output, Norfolk Island’s is not undertaken by the Australian Bureau of Statistics (ABS). Accordingly, NIRC has moved to reinstate the calculation of GTP because various governance audits have identified the need for up-to-date economic data to enable good planning and policy development.
DeltaPearl Partners used several publicly available data sources to estimate the GTP for Norfolk Island. The methodology employed is consistent with the method suggested by the Australian Department of Infrastructure, Transport, Regional Development, Communication, and the Arts10 and other institutions.
GTP can be estimated using income, expenditure, and production approaches. The 2019 GTP calculation, estimated the expenditure side of GTP (excluding investment) for three consecutive years: FY2014 ($81.2 million), FY2015 ($86.5 million) and FY2016 ($81.8 million). The last report on GTP noted that small year-to-year fluctuations were not to be unexpected for Norfolk Island, given its status as a small, remote economy. This may be ascribed to changes in the number of tourist visitors, government expenditure and the level of net exports.
Given the extent of time that has passed since the last estimate of GTP and the significant social and economic changes over these years, including COVID-19 impacts, changed laws and Norfolk Island administration, new global trading patterns, altered household income and spending patterns, and changed technology, it is timely to undertake an updated estimate of GTP that utilises more up to date data.
Council commissioned consultant, DeltaPearl Partners, to re-commence calculation of annual economic output on Norfolk Island. The first year of a three year contract to provide Annual GTP estimates for Norfolk Island was completed in December 2023. This first estimate for 2023 FY describes extremely positive results showing Norfolk Island’s economy is growing strongly and at a rate faster than the mainland. The 2023 methodology will provide a solid base for measuring future years.
In summary, DPP key metrics from the report attached are:
Norfolk Island GTP in FY2023 was $146.7 million, up from $81.8 million in FY2016.
GTP has increased by 8.71% per annum since the last estimate of GTP in FY2016.
Since FY2014, inflation-adjusted GTP has risen 4% per annum, while Australia’s grew at 2.4%.
The Norfolk Island population on 30 June 2023 was estimated at 2,256.
Government expenditure on Norfolk Island doubled between FY2016 and FY2023.
Government expenditure (excluding wages) contributed 22% to the GTP.
Tourism visitors increased to 32,232 in FY2023, the highest number since FY2008.
Tourism expenditure represents 36.4% of the Norfolk Island economy.
Average household income on Norfolk Island is approximately two-thirds of mainland Australia’s.
The overall trade balance is slightly positive and contributed approximately 1% to GTP.
Norfolk Island residents consume 23 per cent less in value terms than mainland Australians.
A copy of the Report Gross Territorial Product Estimate 2022-23 Norfolk Island can be accessed via this link.