Fisheries Cost Recovery Standing Committee Meeting #27

Approved Minutes

Attendees:

1. Ian Cartwright – Independent Chair
2. Geoff Ellis (Industry member)
3. Vince Collins (Industry member)
4. Vin Gannon (Industry member)
5. Mark Edwards (DPI member)
6. Terry Truscott (DPI member)
7. Anthony Ciconte (Industry member)
8. Renee Vajtauer (Permanent Observer)

Executive Support
Chris Padovani - Project Officer Statutory Consultation

1. Welcome and Introductions

• Sean Buck - Industry
• Sue Alcock – Industry
• Gary Leonard – Industry
• Bill Allan – Industry
• Harry Peeters - Industry
• Anthony Hurst - DPI
• James Andrews - DPI
• Bill Lussier – DPI
• Ian Parks – DPI
• Murray Donaldson – DPI
• Iain Bruce – DPI

The Chair re-read the following statement, first tabled at FCRSC meeting #25, 2 September 2012

Welcome to the meeting, especially to those who have not attended before.

This Committee was established by the Minister for Agriculture to provide him, and indirectly, the Department, with advice on the design, implementation and monitoring of cost recovery for commercial fisheries in Victoria.

Among other things, the role of the Committee is to:

1. promote efficiency, equity and transparency;
2. facilitate an understanding of the cost recovery process; and
3. oversee and facilitate, through an industry/government partnership, the provision of fisheries management services and research in a budgetary context, and ensure consistency with Government policy and guidelines.

The Fisheries Cost Recovery Standing Committee's Terms Of Reference (ToR), which are essentially an agreement between two parties [the Government and Seafood Industry Victoria(SIV)] are now somewhat out-dated in some aspects. For instance, the Fisheries Activity Costing System (FACS) has ceased to be used to meaningfully inform the setting of fees and levies for the last four years. The principles, in the view of the Department, need to be revisited and there have been concerns raised about the transparency of cost recovery processes. Accordingly, the Department has indicated that once decisions have been made on a revised cost recovery regime, a review of the TOR's would be appropriate.

In late October, a turning point in the development of cost recovery occurred. I met with the Minister and raised a number of personal concerns, as well as reflecting, first hand, some of the views that have been expressed from around the FCRSC table. Partly as a result of this meeting and subsequent discussions by the Minister's office with the Department and SIV, the Committee has been provided with some clear directions.

These are:

• To achieve a new forward-looking/prospective cost recovery system ready for a RIS in 2013, to be phased in over a period commencing 1 April 2014 in such a way that it does not 'overburden' industry, while moving towards an appropriate level of cost recovery;
• On the matter of 2012/13 levies and the issue of rolling over by the Consumer Price Index, or apply some other level of increase, the Minister does not require comments from the FCRSC. The matter will be determined in consultation with SIV. Essentially this matter is off the FCRSC table.
• A broadening of attendance at the Committee to reflect the major fisheries, broaden the level of expertise available; and increase the level of support for its outcomes. In the short term and to expedite progress, additional attendance would be achieved using the current provision in the FCRSC TORs for advisers, As such, the Committee, at least until the review of the TORs is complete, will remain an expertise-based committee, but with significant and valuable input from a wide range of industry sectors. In order for the Committee process to be as effective as possible, it is suggested that there not be a provision for alternatives should nominated advisers not be available.

As I outlined in my email which most of you will have received, it is proposed that the FCRSC should initially:

1. develop a timetable that allows for the considered and staged development of this revised regime. I would intend that, following the 5 September meeting, and in line with expectations from the Minister's office, I will report back to the Minister with a proposed timetable that would allow staged implementation to commence by the proposed date; and
2. confirm the services for which costs should be recovered from the commercial sector, and the principles for the operation of a cost recovery regime.

Operating with a larger attendance and ensuring adequate communication with the wider industry will be challenging, will require the work of the Committee to focus on key issues and be conducted in good faith. This will not be easy given some of the residual concerns from the past performance of the fisheries cost recovery process.

After each meeting, as has occurred in the past, I propose that I shall prepare a Chair's summary which will be available on the department website not more than three weeks after the meeting, and ideally within two weeks.

Minutes of the meetings will be Committee-in-Confidence until they are cleared at the next meeting of the Committee, when they will be placed on the Department website. As such the minutes will not be attributed unless there is a specific request to do so. I hope this facility will not be used widely.

Committee members and advisers are encouraged to discuss the outcomes of each FCRSC meeting with stakeholders. Issues or details identified by exception as being of a particularly sensitive nature are to remain Committee-in-Confidence until resolved or a decision taken. In essence, all matters discussed by the Committee can be aired with stakeholders where members/advisers consider it would be helpful, or are asked by the Committee to do so.

2. Apologies:

• None

3. Confirmation of previous Minutes

Background
Draft Minutes of FCRSC meeting #26 of 28 September 2012 were circulated to members on 9 October 2012.

Recommendation
That the FCRSC confirms the Minutes of FCRSC meeting #26 of 28 September 2012.

Outcome

1. The Committee confirmed the Minutes of FCRSC meeting #26.

4. Progress on Action Items from meeting #26

Progress on Action Items from meeting #24

5. Items for discussion/noting

5(a) Cost recoverable services (including emergency response) provided to Victoria's wild-catch and aquaculture fisheries

Background:

At FCRSC meeting #26, the Committee asked DPI to:

• amend the table of services to include amended definitions for the three operational services (marine fisheries, freshwater fisheries and aquaculture); and
• provide more detail about the relationship between cost recovery and emergency response and provide to Committee members to review prior to the next FCRSC meeting.

The table showing amendments in track mode was provided to the Committee on 29 October 2012. Further amendments are shown in Attachment A.

Recommendation:

1. That the FCRSC review and decide on the amended definitions for the three operational management services.
2. That the FCRSC note that DPI is working with internal stakeholders to better define the relationship between cost recovery and emergency responses.

Outcome:

1. The FCRSC reviewed the amended definitions for the three operational management services, and was satisfied that the definitions adequately describe those services. The 'recoverability of DPI activities and services to be provided by DPI to the commercial wild-catch and aquaculture industries' document has now been ratified by the FCRSC. It was agreed that the next step is to develop and agree on the specific services to be provided to each fishery.
2. The Committee noted that DPI will be providing more detail about the relationship between cost recovery and emergency response to Committee members once it has obtained the necessary information from relevant internal stakeholders. Once approved by the FCRSC, this information will be included in the 'Guidelines for the operation of cost recovery' document. Accordingly, the FCRSC agreed to defer the resolution of this matter to a later meeting.

5(b) Guidelines for the operation of cost recovery

Background:

At FCRSC meeting #26, the Committee asked DPI to amend the narrative (Guidelines for the operation of cost recovery) and provide comparative data in relation to the levies paid by industry in 2011/12 for review prior to the next FCRSC meeting.

Attachment B (Guidelines for the operation of cost recovery) provides the basis on which a prospective cost recovery system will operate.

Recommendation:

That the FCRSC consider the document with a view to endorsing it as a foundation document for the new prospective cost recovery system.

Outcome:

1. The Committee agreed to review the amended Guidelines out of session and provide feedback to DPI prior to the next FCRSC meeting to enable DPI sufficient time to amend the Guidelines for further consideration.
2. The Committee noted that the Guidelines would evolve as deliberations continued on the operation of the new regime.

Action item:

1. Industry members to review the amended Guidelines for the operation of cost recovery and provide feedback to DPI prior to the next FCRSC meeting.

5(c) Deliverables/Milestones described for each fishery

Background:

DPI has provided the schedules in which the cost recoverable services (Function, Description, and Deliverables / Milestones) are proposed to be described for each fishery.

Recommendation:

For discussion.

Outcome:

1. Fisheries Victoria Branch representatives attended the meeting to answer specific questions regarding the detail of cost recovery services (including milestones) for each fishery.
2. The Committee noted that recoverable cost estimates were based on estimated FTEs (full time equivalents) for the provision of services. DPI directors were asked to estimate the average annual amount of time spent and operating cost against each cost recoverable service provided to industry within each fishery over the next four year period, recognising that some costs may only actually be incurred in one or two particular years in the cycle. This approach enables industry to have more certainty over the cost of their annual levies, and avoids the high transaction cost of annual adjustments and smooths the likely variation in services in specific cases.
3. The Committee noted that the schedules contain a preliminary estimate of staff effort and costs, and that final FTEs and costs would be contingent on the final nature and extent of services and deliverables determined. The 42 schedules were strictly Committee-in-Confidence, as agreed by the FCRSC at meeting #26, and have not been endorsed by Government at this stage.
4. The Committee expressed surprise at the difference between the levies paid by industry in 2011/12, and the preliminary levies proposed under the prospective cost recovery system. In many cases, there is a significant increase in the levies, although some fisheries, such as the Abalone Eastern Zone, show a decrease in the total costs to be recovered, excluding the abalone royalty. The Committee noted the reasons for this difference including the underlying differences in recovery for different services, the relative levels of services in different fisheries is likely to have changed since 2006/07, and the fact that recovery has been held, other than CPI increases for the last five years.
5. Industry unanimously requested that the preliminary costs be released to all of industry to allow a more robust debate about the cost recoverable services and deliverables to be provided by DPI. Industry opined that without this data, there will be insufficient feedback provided to assist in the development of the prospective cost recovery system. DPI acknowledged industry's request to distribute the cost data outside of the Committee, but pointed out that the Committee had been established to work strategically on the design and operation of cost recovery. The FCRSC noted that industry attendance had been expanded at the request of the Minister to include a wider range of industry expertise to be involved in the development and implementation of the new cost recovery system, and that the preliminary data contained in the schedules would remain Committee-in-Confidence at this time. Later stages of the process, to be conducted in 2013, would involve wider industry consultation.
6. The Committee noted the deliverables and milestones against each cost recoverable service, and the need for each respective fishery's services to be considered. The Chair advised the Committee that differences of view may persist on some components of the new cost recovery regime, and that in those circumstances, that advice would be conveyed to the Minister.
7. Industry suggested the need for a contract or service level agreement to be entered into between the Government and industry regarding the provision of services in which costs are recovered prospectively. DPI advised the FCRSC that the Victorian Government provides regulatory services to the commercial wild-catch and aquaculture sector in order to meet its obligations under the Fisheries Act 1995. A proportion of some of the costs incurred to deliver those services is then recovered from industry (the beneficiary of those services) in line with Government policy on cost recovery. It is not the same as a contract entered into between two parties in the private sector. However, the FCRSC noted that it does involve similar features such as the description of services, key deliverables, providing transparency and a basis for improved reporting.
8. In noting the need for transparency about the delivery of cost recovered services, FCRSC also acknowledged the need for practicality and simplicity. The Committee recognised that it would be the deliverables and milestones that would be important within any year, rather than the hours or dollars which would be costly to track. The Committee reiterated the conclusion reached at meeting #26 that reporting at the fishery level would support transparency and accountability. The Chair advised the Committee that once the prospective cost recovery system was implemented, it would be a key role of the FCRSC to review these fishery-level reports.
9. In regards to the 'intelligence related to licensed or authorised commercial fishers'' service, the FCRSC (except for one industry member) agreed that the commercial sector receives a benefit from intelligence gathered via the 13FISH hotline. The FCSRC noted that 13FISH enabled the provision of anonymous information to DPI, thereby directing DPI's focus towards someone who may not be compliant with fisheries regulations.
10. The Committee noted that 13FISH was one tool used by DPI to gather intelligence related to individuals and/or activities.
11. The Committee further noted that the costs, including 13FISH costs, associated with 'intelligence related to the recreational sector' and 'intelligence related to the unlicensed/illegal sector' were not subject to cost recovery.
12. The Committee noted the advice from DPI that it publishes information pertaining to the success, or otherwise, of the 13FISH hotline on the DPI website, but also requested further detail regarding the number of calls that relate to commercial fisheries in the Abalone Western Zone over the past five years, and an estimation of the number of those calls that may have led to fines or other legal action.
13. Industry asked, and DPI agreed to:
    a) Provide the number of registered investigations and operations undertaken by DPI for each abalone zone over     the past five years; and
    b) Provide a breakdown of staff time and budget for research conducted by DPI in the Abalone Western Zone.
14. With regard to the Abalone Eastern Zone fishery, industry sought an explanation for the reduction in management costs between the levies paid in 2011/12 and the preliminary prospective levies. DPI reminded the Committee that for the 2008/09, 2009/10, 2010/11 and 2011/12 licensing years, levies had been rolled over (with inflation adjustment) each year originally based on the Fisheries Activity Costing System (FACS) data for the 2006/07 year. This means that the levies paid by the Abalone Eastern Zone in 2011/12 for management were based on FACS-determined management costs incurred in 2006/07.
15. Due to the limitations of the FACS system, the data presented to the FCRSC in each of those years was considered unreliable and, as such, have not been used for the last four years except to reduce levies for some fisheries. The FCRSC has noted on numerous occasions the increasing the gap between actual (FACS) and recovered costs. If the FACS data was considered to be reliable, then it demonstrates that DPI has been under-recovering costs since 2006/07. It is on this basis that DPI advised the Committee that any comparisons between the preliminary costs outlined in the prospective cost recovery system and the levies paid by industry in 2011/12 do not help in the development of the new cost recovery regime. FCRSC accepted that it would be more productive to focus on the nature and extent of services to be provided to each fishery, as this is what will ultimately determine the costs to be recovered for that fishery under the new prospective approach.
16. DPI advised the FCRSC that there is no intention to reduce the level of services currently provided to each fishery. The final services and costs to be recovered, will be determined following a consultation process, firstly, with the FCRSC, and later via other mechanisms such as the public consultation process around the Regulatory Impact Statement.
17. The FCRSC reviewed the services to be provided to the Abalone Western Zone fishery. Industry sought clarification from DPI as to why the preliminary research cost per quota unit is significantly higher than for the Central or Eastern zones. DPI advised the FCRSC that the higher cost per quota unit is partially explained by the lower number of quota units in the Western zone – i.e. fewer individuals to share the cost. The Committee noted that the total cost of research is also higher in the Western Zone than the other two zones; DPI agreed to provide further details to the FCRSC.
18. With regard to the Rock Lobster Eastern Zone fishery, the FCRSC noted the advice of industry that the proposed increase in levies would result in a significant impact on the profitability of the fishery. The Committee noted that there are 45 licences in the fishery, of which 17 are active, and that the proposed levies would represent about 20% of the Gross Value of Production (GVP).
19. The Committee noted that some cost recoverable services will still need to be provided to a fishery, such as a stock assessment, whether there are few active licences or many active licences in the fishery. The Committee further noted that if a fishery is closed on a temporary basis, there may still be costs associated with managing that fishery, albeit a reduced cost. The Committee sought further advice as to who should bear the costs of a fishery if it is temporarily closed.
20. The Committee noted that a reduction in the level of services provided to a fishery will lead to a reduction in total costs. DPI advised that it has a statutory responsibility to ensure that each fishery is managed in a sustainable manner. Using stock assessment as an example, DPI indicated that it could agree to conduct a stock assessment in a quota fishery every second year, thereby reducing the cost of that service to industry. However, DPI might then need to be more conservative in setting the Total Allowable Commercial Catch (TACC) for that fishery if that approach entailed greater risks – i.e. there would likely be a reduction in the TACC available to commercial operators in that fishery.
21. The Committee reviewed the schedule for the Gippsland Lakes fishery. The proposed costs represent a significant increase on the amount licenced operators are currently paying. Industry opined that the research methodology undertaken by DPI in the fishery was flawed and, as such, commercial operators elected not to be involved in that process. The DPI research branch representative disagreed with that opinion and advised the Committee as to how the research was undertaken. The branch representative also indicated a willingness to improve its research methods if required, and to consult out of session with the industry representative on the matter.
22. The Committee reviewed the Gippsland Lakes Bait fishery. The proposed costs represent a significant increase on the amount licenced operators are currently paying. The Committee noted that there are nine licences in the fishery, of which six are active. The Committee noted the low research costs for the fishery, however, requested DPI provide some more detail regarding the required level of compliance services to the bait and aquaculture fisheries, with the information to specifically indicate what sort of infringements may be occurring to warrant this level of compliance services. A DPI Education and Enforcement Branch representative provided an example to the FCRSC of an aquaculture operator who was breeding a species of fish not permitted under that licence class; this would likely not have been detected without the current level of compliance services. DPI agreed to provide additional details as requested, including further examples, for consideration by FCRSC.
23. The Committee reconfirmed that a move towards forward budgeting is a positive step as it will allow an increase in transparency of costs and the ability for industry to have input into the nature, design and extent of services to be provided by DPI or alternative service providers, with a view to realising both improved efficiency and cost savings. The problems with a system based on incurring costs and being charged after the event (the current system) were again acknowledged by the FCRSC.
24. The Committee discussed industry's ability to pay increased levies, and requested DPI to provide it with the estimated GVP of each fishery. While acknowledging the issue, DPI suggested that this was not a matter that would warrant amending the cost recovery principles or guidelines; it could, perhaps, be addressed as an adjustment made by the Minister in the implementation of the new cost recovery regime by, for example, phasing in new levels of cost recovery.
25. The Committee noted the advice from the Minister in the Chair's opening statement…'To achieve a new forward-looking/prospective cost recovery system ready for a RIS in 2013, to be phased in over a period commencing 1 April 2014 in such a way that it does not 'overburden' industry, while moving towards an appropriate level of cost recovery'. The Committee acknowledged the Minister's intention that the prospective cost recovery system would be phased in, and not be over-burdensome, but would move towards an appropriate level of cost recovery.
26. The Committee noted that when it comes to considering a transition period to implement the new cost recovery regime, this may not be limited to a phase in of levies, but also a phase in of any new systems that DPI may need to adopt.
27. In the context of affordability of services, the Committee raised the question…'What if services (and by extension, costs) can't be reduced any further in a fishery?' The Committee asked DPI to provide comments on some options that could prevent the closure of fisheries in these circumstances.
28. The Committee reviewed the Wild Catch Eel fishery, and noted that the fishery is still recovering following a long period of drought, and that the proposed costs represent a significant increase on the amount licenced operators are currently paying.
29. The FCRSC agreed that two workshops are required to consider and review all of the services and deliverables/milestones for each fishery. FCRSC agreed that the first workshop, to be held on Monday 12 November, should focus on the three abalone fisheries, and that the second workshop, to be held on Tuesday 20 November, should focus on the remaining wild-catch fisheries. The Committee noted that these workshops should assist in meeting the Minister's timeline of 1 April 2014 to implement the prospective cost recovery system.
30. The Chair requested industry submit any questions or queries about the non-abalone schedules in writing at least one week prior to the 20 November workshop to enable DPI sufficient time to formulate responses.
31. DPI provided the Committee with a detailed summary spreadsheet of the 42 schedules, which contained comparative data between the proposed prospective cost recovery system preliminary costs, the levies that were paid by industry in 2011/12, and the 2011/12 FACS data. The Committee noted that this spreadsheet is also Committee-in-Confidence at this time.
32. The Committee noted that the FACS data contained in the spreadsheet indicates that the levies paid by industry in 2011/12 were less than the actual costs incurred by DPI to deliver cost recoverable services.

Action item:

1. DPI to organise and conduct two workshops, one for the abalone sector, and the other for the remaining wild-catch fisheries prior to the next FCRSC meeting.
2. Industry to submit questions in writing prior to the workshops to enable DPI sufficient time to compile a suitable answer.
3. DPI to provide for consideration by FCRSC some more detail regarding the level of compliance services to the bait and aquaculture fisheries; specifically to indicate what sort of infringements may be occurring to warrant the current level of compliance services, including actual examples.
4. DPI to provide advice on options that could prevent the closure of fisheries due to the burden of cost recovery.
5. DPI to provide further detail to the FCRSC regarding the number of 13FISH calls that relate to commercial fisheries in the Abalone Western Zone over the past five years, and an estimation of the number of those calls that may have led to fines or other legal action.
6. DPI to provide further details to the FCRSC regarding the total research costs in the Abalone Western Zone.
7. DPI to provide the number of registered investigations and operations undertaken by DPI for each abalone zone over the past five years.
8. DPI to provide a breakdown of staff time and budget for research conducted by DPI in the abalone western Zone.
9. DPI to amend the spread sheet to include estimated GVP for each fishery.

5(d) Potential grouping of Victoria's licence classes

Background:

At FCRSC meeting #26, the Committee asked DPI to group the 42 fisheries and provide to the Committee members to review prior to the next FCRSC meeting.

Recommendation:

For discussion.

Outcome:

1. The Committee noted the paper provided by DPI, and agreed to defer this matter for further discussion at FCRSC meeting #28.

5(e) DPI Overheads

Background:

At FCRSC meeting #26, the Committee asked DPI to provide the Committee with a break-down of the DPI overheads associated with staff in different areas.

Recommendation:

For discussion.

Outcome:

1. The Committee noted that DPI would provide a soft copy of this paper to the Committee immediately following the meeting, and agreed to defer this matter for further discussion at FCRSC meeting #28.

5(f) 4 month progress reports to FCRSC

Background:

At FCRSC meeting #26, the Committee asked DPI to develop a proposal for reporting based on reporting at the level of deliverables every four months for discussion with the Committee.

Recommendation:

For discussion.

Outcome:

1. The Committee agreed to defer this matter for further discussion at FCRSC meeting #28.

5(g) Licensing year and financial year

Background:

At FCRSC meeting #26, the Committee asked DPI to assess whether the licensing year can be moved to be in line with the financial year and provide an answer to the question "could levies be paid by industry on 1 July with the licensing year continuing to commence at 1 April?"

Recommendation:

For discussion.

Outcome:

1. The Committee noted the paper provided by DPI, and agreed to defer this matter for further discussion at FCRSC meeting #28.

5(h) Ownership of Research Information

Background:

At FCRSC meeting #26, the Committee asked DPI to clarify the matter of ownership of information generated from research conducted by DPI, or an agreed service provider, where industry had paid levies for that service.

Recommendation:

For discussion.

Outcome:

1. The Committee noted the paper provided by DPI, and agreed to defer this matter for further discussion at FCRSC meeting #28.

5(i) Attribution of costs – quota versus licence

Background:

At FCRSC meeting #26, the Committee agreed to consider the attribution of costs within quota managed fisheries at a future meeting.

Recommendation:

For discussion.

Outcome:

1. The Committee noted the paper provided by DPI, and agreed to defer this matter for further discussion at FCRSC meeting #28.

5(j) Consultation regarding the level of services

Background:

At FCRSC meeting #26, the Committee agreed to confirm the mechanism for consultation regarding the level of services and schedules at a future meeting.

Recommendation:

For discussion.

Outcome:

1. The Committee noted the paper provided by DPI, and agreed to defer this matter for further discussion at FCRSC meeting #28.

5(k) Effectiveness of Compliance and Enforcement Activities: Department of Primary Industries and Department of Sustainability and Environment

Background

The Victorian Auditor General's Office conducted an audit to inform the Victorian community and Parliament on whether public sector entities are appropriately administering legislation.

The audit report was tabled in the Parliament on 24 October 2012, and was provided to FCRSC members on 24 October as requested.

DPI accepts the recommendations contained in the audit report, and is pleased to note the audit report highlights the positive example of Fisheries Victoria's intelligence-led Education and Enforcement Model, which uses a robust methodology for transparently assessing risks and planning and prioritising its compliance report.

Recommendation:

For discussion.

Outcome:

1. The Committee agreed to defer this matter for further discussion at FCRSC meeting #28.

5(l) Compliance reporting by other jurisdictions

Background:

At FCRSC meeting #26, the Committee asked DPI to investigate the level of compliance reporting by other jurisdictions in regards to a cost recovery system.

Recommendation:

For discussion.

Outcome:

1. DPI provided the FCRSC with a sample compliance report on abalone from NSW Fisheries. The FCRSC agreed that this document should remain as Committee-in-Confidence.
2. The Committee agreed to defer this matter for further discussion at FCRSC meeting #28.

6) Other Business

6(a) Setting levies for 2012/13, including the FRDC levy

Background:

As stated by the Chair at FCRSC meeting #25, and again at the commencement of this meeting, the Minister does not require comments from the FCRSC in regards to the setting of 2012/13 levies.

The matter will be determined in consultation with SIV. Essentially this matter is off the FCRSC table.

Outcome:

1. The Committee noted that for the 2008/09, 2009/10, 2010/11 and 2011/12 licensing years, levies had been rolled over (with inflation adjustment) each year originally based on Fisheries Activity Costing System (FACS) data for the 2006/07 year. It was further noted that the roll-over of the first year (2008/09) was due to the inadequacy of the FACS and the pending introduction of a forward-budgeting cost recovery system.
2. Industry members' view was that whilst the move towards forward-budgeting had taken longer than expected, and is potentially increasing the gap between actual and recovered costs, a roll-over for a further 12 months whilst the prospective cost recovery system is being properly costed, considered and implemented would be the best option.
3. The Chair reminded the Committee that he had provided the Minister with industry's view on the matter, and that the Minister had advised that he does not require comments from the FCRSC. The matter will be determined in consultation with SIV.

6(b) A timetable for cost recovery in Victoria to move to forward budgeting

Background:

At FCRSC meeting #25, the FCSRC discussed and agreed upon both the actions that need to be completed in order to meet the Minister's stated intention to implement a new cost recovery regime by 1 April 2014, and the timeline required to complete those actions.

Outcome:

1. The Chair outlined the actions, FCRSC meetings, and consultation processes that need to be completed to implement a new cost recovery regime by 1 April 2014.
2. The FCRSC noted that the Minister had agreed to the request of the Committee to delay the introduction of the prospective cost recovery system by 12 months from its original implementation date of 1 April 2013.
3. Some members of the Committee expressed reservations about meeting the new timeline.
4. DPI advised that there was some flexibility in the public consultation period action item, currently scheduled for 60 days. The Committee noted that this could be reduced to a minimum of 28 days, but that when the Committee first developed the timeline at FCRSC meeting #25, it was firmly of the opinion that the public consultation period should not be reduced and should remain at 60 days.
5. The Committee agreed that whilst there is a lot of work to be done between now and 1 April 2014, it agreed to continue its efforts to work constructively on the development of the new cost recovery regime.

6(c) Miscellaneous matters related to the introduction of a prospective cost recovery system

Outcome:

1. The Committee noted that a Regulatory Impact Statement will be prepared for cost recovery changes. There is the potential other regulations will be progressed in the same package. If this is the case, there will be a separate process to engage on those changes.
2. The Committee noted that DPI had conducted a review of its current fee structure (quota transfers, etc.), and has identified that the fees being charged to individuals do not cover the cost of these transactions. On the basis of current systems and staff complements, DPI is under-recovering for the cost of providing these services to individuals. However, these systems are currently being redesigned, and there is the potential for efficiency improvements.
3. The Committee further noted the intention that transaction fees are to be reviewed in 2015, once the new systems are operating. In the meantime, fees will be maintained in line with the Treasurer's CPI index.
4. The Committee requested DPI to provide agenda papers and supporting documentation, both in soft and hard copy to members at least one week prior to the meeting to enable members sufficient time to review.

Action item:

1. DPI to create a cost recovery folder for each FCSRC member that contains all working documents, including foundation documents, to assist members consider agenda items, especially at meetings.

6(d) Industry attendance at FCRSC

Background:

At FCRSC Meeting #25, the Committee noted that further industry attendees for rock lobster (Western Zone), aquaculture (marine waters), and the abalone (Western Zone) and abalone (Central Zone) will be invited to FCRSC meetings as advisors to assist in the development and implementation of a new cost recovery regime. These advisors would be reimbursed for reasonable travel expenses incurred as a result of attending FCRSC meetings. Accommodation expenses for those attendees residing outside of Melbourne, where the timing of meetings makes travel on the day impractical, will also be incurred by DPI.

Both DPI and Seafood Industry Victoria have made repeated attempts to involve attendees from the Rock Lobster Western Zone and Aquaculture (marine & freshwater) sectors in the development of a new cost recovery regime. Unfortunately, no person has been willing to become involved in the process.

Recommendation:

That the FCRSC notes the efforts made by DPI and SIV to involve additional industry attendees in the cost recovery process.

Outcome:

1. The Committee noted the efforts made by DPI and SIV to involve additional industry attendees in the cost recovery process.
2. The Committee noted that an aquaculture licence holder had agreed to join the FCRSC, but unfortunately had to wtihdraw for business reasons.
3. The Committee further noted the advice of industry member Anthony Ciconte, who advised the Committee that he had an interest in both the Eastern and Western Rock Lobster Zones.
4. DPI advised the Committee that aquaculture representation on the FCSRC would be discussed at an upcoming aquaculture licence holders forum with DPI.

7) Next meeting:

Thursday 22 November at 10am.

Meeting closed at: 3:00pm.

Action items