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CANBERRA - Norfolk Island's governance will remain unchanged despite months of tense negotiations between Canberra and the Pacific island.
Territories Minister Jim Lloyd made the announcement today, saying any changes to the island's government could harm the fragile economy.
"The government has taken account of the efforts of the Norfolk Island government to increase revenue and to promote the growth of tourism to the island," Mr Lloyd said in a statement.
Norfolk Island is an Australian territory with a government which raises revenue under its own system of laws, mainly from such sources as customs duty, liquor sales, departure fees and a financial institutions levy.
The backflip on possible reforms comes after Mr Lloyd said earlier this year that Norfolk Island could not govern itself.
"An independent financial assessment by Acumen Alliance concluded that the Norfolk Island government would probably become insolvent within the space of two years," Mr Lloyd said in February.
"The Australian government has now concluded that the current arrangements are unsustainable and that an alternative is needed."
Mr Lloyd now says any changes would not be in the interests of Norfolk Islanders.
"This would not be in the interests of Norfolk Island at this time as the islands government works to build a long term future for its community," Mr Lloyd said.
"The Australian government has accepted the assurances of the Norfolk Island government that it will continue its program of economic and financial reform and that it will seek to improve the transparency and accountability of governance on the island."
- AAP
