Fisheries Cost Recovery Standing Committee Meeting #16

14 August 2008

Venue: Treacy House, 126 The Avenue, Parkville.

Chairman's Summary


  • Mr Ian Cartwright
  • Mr David Lucas (Industry member)
  • Mr Jon Presser (DPI member)
  • Dr Terry Truscott (DPI member)
  • Mr Gerry Geen (Industry member)
  • Mr Hugh Meggitt (Industry member)

Apologies: N/A

Permanent Observer:

  • Mr Ross McGowan (SIV)

Executive Support:

  • Mr Robert Krix (DPI member)

Invited Observer:

  • Mr Vin Gannon Executive Officer Victorian Abalone Divers' Association


The meeting was the second meeting of 2008 for the Fisheries Cost Recovery Standing Committee (FCRSC). Progress on some fronts has been held back by the large amount of other major fisheries management activities underway, including the Consultative Review, The Review of Regulations and preparations for changing the licensing year. As usual, the Committee reviewed a number of aspects relating tho cost recovery, including changes to a number of accounts under Fisheries Activity Costing System (FACS), to achieve more accurate and equitable distribution of costs.

Mr Vin Gannon, CEO of the Victorian Abalone Divers Association (VADA), attended the meeting and raised a number of issues of concern on behalf of the central zone abalone sector. The key issues covered by the 16th meeting of the FCRSC are outlined below:

Integrated cost recovery/budgeting system

The Committee continues to work on system that will enable industry to have 'frontend' input into the budgeting process and the level of management services to be cost recovered. The following of steps to this process are being considered:

  • review and simplification of the Fisheries Activity Costing System;
  • a forward-planning process to determine the type, level and delivery of required fisheries management services in consultation with Seafood Industry Victoria (SIV);
  • a Service Level Agreement with SIV that specifies the level of services and other matters that are the responsibility of DPI/FV and SIV respectively; and
  • an annual forum to plan and evaluate service delivery.

The Committee recommended that DPI plan to commence the new format for forward-planning and costing of services for all commercial fisheries on 1 July 2010, using the Rock Lobster fishery as a case study to develop templates and processes over the next 18 months. A programme of industry consultation on this issue is planned.

Industry communication and engagement in FCRSC processes

The Committee welcomed one industry observer and noted that other interested parties are encouraged to communicate their concerns and issues on cost recovery with Robert Krix or with Committee members (see contact details at the end of this summary). FV will circulate Chair's Summaries to all commercial fishery representative bodies through SIV and industry associations. The possibility of placing the summaries on the DPI/FV website should be explored.

Impact on commercial fishing licence holders of government-initiated licence reductions.

The Minister has accepted a number of basic principles that should apply following resource reallocation, and the consequential distribution of recoverable costs arising from government-instigated buy-backs (i.e. fewer commercial licence holders responsible for the same of similar level of recoverable costs). DPI/FV has been asked to conduct a case study assessment of the impact on cost recovery on remaining commercial fishery licence holders following the completion of the government-initiated removal of commercial netting in Western Port.

Levy relief for western zone abalone licence holders

Commercial production from the western zone abalone fishery has been reduced significantly as a precautionary measure due to the abalone virus; this has reduced the Gross Value of Product (GVP) and industry profitability. While it is likely that commercial production from the western zone will remain at conservative levels to support stock re-building, compliance and other management costs will continue to be incurred. Fisheries Victoria has proposed, and the Committee has supported, consideration of an arrangement for the western zone abalone industry where licence holders that agree to not fish commercially (for the 2009/10 licensing period) would pay a Fishery Access Licence renewal fee (to enable the licence to be maintained) and non-discretional SIV and FRDC levies but would be exempt from the FMS levies applicable to abalone access licences and quota units. In these circumstances, the access licence and the quota units will be suspended until such time as the full licence fees are paid.

Different royalty charges for green lip and black lip abalone

To ensure equity, Fisheries Victoria is proposing to differentiate between the royalty charges for green lip and black lip abalone in recognition of their different quota unit values in the central and western zones. The Committee supported the proposal in-principle, and agreed that FV should progress the matter accordingly.

Central zone abalone royalty refund

The central zone abalone TAC was reduced from 620 tonnes to 570 tonnes in April 2007 and the industry paid a royalty at the time of licence renewal on 1 April 2006 based on the initial 620 tonnes. The Committee recommends a refund of the royalty to central zone abalone unit licence holders applicable to the 50 tonnes of reduced TAC for 2007/08. This recommendation recognises that the 21 tonnes that were taken from the firebreak area were not formally recognised/gazetted as part of the initial TAC, and therefore, were not taken as a part of the initially reduced 50 tonnes of the TAC.

Conclusion of Marine Parks Initiative (MPI) Funding and fisheries fees, royalties and levies for 2009/10

Marine Parks and Sanctuaries were introduced in Victoria between 2001 and 2004. In order to assist the commercial fishing industry adjust to this exclusion, two programmes were implemented: i) direct financial compensation over three years for the rock lobster and finfish sectors and ii) an enhanced compliance program, principally for the abalone sector, over the past five years. This funding has now ceased, and in the 2009/10 financial year, there will be about an additional $1milion of previous MPI funding allocated to FV that will, prospectively, be subject to cost recovery.

Industry representatives advised that they were strongly opposed to the proposition that previously deemed non-recoverable funds should now be classified as ongoing/recurrent and deemed recoverable.

The time and effort that would be required of FV to complete an RIS for cost recovery in 2008/09 is questionable, given the effort that will need to be applied to review and simplify FACS, moving toward forward-budgeting and amending the commercial fishery licensing year. The Committee therefore unanimously supported an increase in fees, royalties and levies for 2009/10 in line with the Treasurer's 2008/09 inflation index (i.e. about 3 per cent). The cost recovery review process will also deal with the issue of MPI funding.

Aquaculture Management FMS levy – Application of base-rate of $75

The Committee re-affirmed their in-principle support for the application of a $75 base-rate as a component of the FMS for the aquaculture sector as a fair and reasonable means of improving the distribution of overhead charges (note: this is not an additional charge). Due to a RIS not being completed this year (2008) and as this charge would not be introduced until the next levy period, FV should raise the issue with the aquaculture sector to obtain feedback in advance of the 2009 RIS (as applicable).

FCRSC vacancies

P Welsby (Industry member – abalone) and T Mirabella (Industry member – Bays and Inlets) have advised of their resignation for the Committee effective April and July 2008 respectively. The SIV Board will consider nominating suitable candidates to be considered for appointment to the Committee.

Next Meeting: December 2008 (to be confirmed).

FCRSC Contacts:

Robert Krix
Executive Officer Fisheries Committee
Fisheries Victoria
Department of Primary Industries (DPI)
GPO Box 4440
1 Spring St
Melbourne 3001
Mobile No: 0411 258 216
Ph: (03) 9658 4727 Fax: 9658 4333

Ross McGowan
Executive Director
Seafood Industry Victoria
Ground Floor, 484 William St
West Melbourne Vic 3003
Ph: (03) 9329 5660