Businesses in Norfolk Island are planning major cutbacks in services as employers face wage increases of up to 45 percent.
Two years after the Australian government took direct control of the island on July 1st it will bring wages into line with the mainland by applying minimum award rates.
Rael Donde runs a resort and is president of the Norfolk Island Accommodation and Tourism Association.
He told Don Wiseman about the impact of the surge in wages.
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Nearby Phillip Island can be seen from the old salt house in Kingston in the Australian territory of Norfolk Island built when the place was a brutal penal colony in the early 1800s, 03 February 2007. Photo: AFP PHOTO/Lawrence BARTLETT