Fisheries Cost Recovery Standing Committee Meeting #5

Phased cost recovery program

for Victorian commercial fisheries

Fisheries cost recovery standing committee

Abalone royalty meeting

Chairman's summary of the meeting held on 17 May 2005

The fifth meeting of the Fisheries Cost Recovery Standing Committee (FCRSC) was held on 17 May 2005 at the DPI, 1 Spring Street, Melbourne. The following representatives attended

Chair:

• Mr Ian Cartwright

In Attendance:

• Mr Paul Welsby (Industry)
• Mr David Lucas (industry)
• Mr Gerry Geen (industry)
• Mr Tim Mirabella (Industry)
• Mr Neville Fowler (DPI)
• Mr Dallas D'Silva (DPI)

Supporting expertise:

• Mr Peter Rawlinson (DPI - FACs and budget analysis)
• Ms Karen Weaver (DPI – Policy Analysis)
• Mr Arthur Ha (DPI – Economist)

The fifth meeting of the FCRSC again focused on the issue of abalone royalty.

The Committee:

• agreed that the background paper outlining the history of royalty in the abalone fishery be finalised and circulated to the committee and form an agreed background that could be referred to in the future;
• confirmed that revenue neutrality should be the governing principle for any future abalone royalty regime,
• noted that while industry and DPI agreed to pursue cost neutrality , whole-of-government agreement (namely by the Department of Treasury and Finance - DTF) was needed;
• agreed on a process and approximate timelines for finalising the new royalty regime;
• agreed that there was potential for the application of the new royalty regime to offer increased benefits to industry, through examination of options for applying the progressive, sliding scale approach agreed at the last meeting; and
• agreed that any future royalty scheme must 'mimic' as closely as possible the existing royalty scheme, i.e. a 3% royalty after adjusting for estimates of cost recovery charges;
• agreed to the broad content of a revised Victorian abalone fishery options paper, including four key options to illustrate how differing recovery scales would operate, all based on the cost neutrality principle; and
• agreed a number of changes to the process governing the work of the FCRSC to improve its efficiency.

Process for gaining approval for the new royalty regime

The Committee reiterated that its primary role in respect of the abalone royalty issue was to provide the Minister with advice on a future abalone royalty scheme, through an options paper. That paper would provide a justified, preferred option. The following proposed steps towards approval and finalisation of the new scheme were noted

i the FCRSC will provide background and advice to the Minister for Agriculture on a preferred royalty collection option;

ii the Minister's office will seek the views of the DTF on the acceptability of the preferred option; and

iii if agreement is forthcoming from DTF, then DPI will move to introduce the necessary regulations to bring the new royalty regime into effect.

Draft Options Paper

The draft abalone options paper prepared within DPI was circulated to members of the FCRSC sub-committee on abalone royalty for further input. Industry responded with an edited version of the document suggesting a number of changes. These changes were considered by DPI and incorporated into a revised paper, Royalty Collection in the Victorian abalone fishery – Options for the Future (V6) 16 May 2005, which was tabled and discussed at the meeting.

In discussing revisions to the revised options paper, a number of guiding principles were discussed and agreed, viz:

• the aspect of "efficiency" be thoroughly explored in the proposal as this was seen as a more important aspect than revenue generation;
• it was necessary to present clearly a limited range of options (4) that would best illustrate the application of a cost neutral royalty scheme that would i) not disadvantage current license holders and ii) seek to incorporate increased efficiency in its application;
• that there is agreement within the FCRSC, confirmed by informal advice from the DPI Minister's office, that a revenue neutral royalty regime would replace the existing scheme;
• industry confirmed that it had received a verbal commitment from Minister for Agriculture that they should not have to pay more royalty than they have previously paid because of the implementation of cost recovery; and
•  any disagreement between Government and Industry during the development of the new royalty regime would be resolved, if at all practicable, within the FCRSC forum.

Clear direction was provided by the FCRSC on the options they wished to see developed in a revised paperand DPI agreed to circulate a redrafted Options Paper to the Committee for further consideration.

Meeting Process

The meeting agreed to a number following guidelines so as to ensure a smoothly operating committee, including:

• improved document control, with papers clearly marked with date, versions and status (e.g. draft, final draft etc) and consistent names;
• the timely and efficient issue of Papers to Committee members to ensure receipt and adequate time for consideration prior to meetings;
• where practical, key issues agreed by each meeting of the FCRSC to be reviewed in writing by the Committee through the use of a data projector (as used in early meetings);
• the workplan of the Committee to be reviewed and updated at every meeting; and
• Chair's summary and Minutes to be circulated to members in a timely fashion according to agreed timelines.

Next Meeting

End July/early August with the precise date to be determined.