Frequently asked questions
What is cost recovery?
The Victorian Fisheries Authority (VFA) delivers fisheries administration, management, compliance and research services for the ongoing sustainable operation of Victoria's commercial fisheries (comprising wild-catch, aquaculture and fish receiver licences and quota holders), in accordance with the Fisheries Act 1995, Fisheries Regulations 2009 and the Fisheries (Fees, Royalties and Levies) Regulations 2008.
Levies for cost-recoverable services are recovered in line with the Victorian Government's response to the National Competition Policy 2001 review of the Fisheries Act and its more recent Cost Recovery Guidelines.
What is the new cost recovery approach?
The new approach addresses the current under-recovery of costs and aligns levies with the Government's cost recovery guidelines. The approach will be prospective, forecasting the services to be delivered and associated costs, to derive levies for the forthcoming licensing years.
Under the approach, there will be a greater level of transparency and accountability through schedules and reporting for the delivery of fisheries services through quarterly reporting of performance against measures at a fishery level.
A forward budgeting approach with increased accountability encourages both industry and VFA to focus on improving the effectiveness and efficiency of services provided.
The government has made amendments to the Fisheries (Fees, Royalties and Levies) Regulations 2008 and Fisheries Regulations 2009 made under the Fisheries Act 1995 to provide for the new forward-budgeting (prospective) system of cost recovery.
The amendments meant that many of the cost recovery levies increase from the previous system of cost recovery.
Annual review of the system, and improvements in service delivery, has reduced some levies over the past three years. The levies are adjusted annually in line with fee unit rate set by the Treasurer.
This new approach is bringing cost recovery from the commercial fishing industry more in line with government cost recovery guidelines published by the Department of Treasury and Finance.
Where can I view the Regulations?
The Governor in Council made the amending Regulations, which came into effect on 1 April 2014 and were most recently amended in 2017. They are available by clicking on 'Victorian Statute Book', 'Victorian Statutory Rules', '2017' at http://www.legislation.vic.gov.au (external website).
What is a Fishery Service?
Fishery service levies are based on the management, research, compliance and administration services provided to each fishery. These services and the associated costs are documented in a service schedule for each fishery. The cost estimations in each schedule relate to the fully implemented prospective system for the entire fishery.
The Authority will report quarterly on the delivery of fisheries services against performance measures (milestones) for each fishery. These reports will be discussed with the Fisheries Cost Recovery Standing Committee and published on the VFA website.
The nature and level of fisheries services to be delivered, and the consequent levies, will be reviewed annually in consultation with the Fisheries Cost Recovery Standing Committee for the first two years of the new prospective system. After the initial two trial years, the nature and level of fisheries services to be delivered, and the consequent levies, will be reviewed comprehensively on a four-yearly basis. DEDJTR will continue to report on delivery during this time.
The reviews will involve fishery specific consultation so that all entitlement holders will have the opportunity to have input into the process at fishery specific forums.
What are the next steps?
The prospective cost recovery system is now at full implementation. The annual cycle of service delivery and reporting will continue with a full review of the whole system every four years. Consultation will continue as part of the annual program and through the Fisheries Cost Recovery Stranding Committee.
An update on Fisheries Cost Recovery for the current year is available on this site.
How do I know what my levies will be?
Licence and quota renewal notices are issued in early March each year (except for Rock Lobster and Giant Crab which are issued in June).
You can calculate the cost recovery levies that will apply to your particular class of licence from the service by dividing the total cost by the number of licences in the fishery (provided on the schedule).
What changes have been made, and why?
The regulatory amendments provide new levy values derived from a simpler, forward looking, more transparent and efficient cost recovery system for fisheries services provided to commercial fisheries entitlement holders by government.
The objective of the amendments was to ensure that levies on commercial fisheries licences and individual quota units are consistent with the government's Cost Recovery Guidelines. The Guidelines are to provide for the efficient and equitable recovery of costs from those benefiting from the provision of fisheries services or those generating the need for such services. In particular, the Regulations:
- make changes to the levies for fisheries access, fish receivers and aquaculture licences and individual quota units;
- provide for the reduction or waiver of certain levies by the Minister;
- provide for the refund of levies imposed for making grants; and
- provide a basis for calculating the levy for research provided by the Fisheries Research and Development Corporation and the levies for making grants under section 151(5) of the Fisheries Act;
Under the new approach there is a greater level of transparency and accountability for the delivery of fisheries services through twice yearly reporting and assessment of performance against measures at a fishery level.
How have the levies been calculated and what is being done to mitigate the impacts on industry?
Fisheries Services Levies
VFA, in consultation with the Fisheries Cost Recovery Standing Committee (FCRSC), has forecast the nature, level and cost, of recoverable fisheries services to be provided to each fishery. These costs determine the levies calculated for each class of entitlement.
Performance measures (milestones) are set out for each category of Fisheries Service (i.e. compliance, management, research, administration) and described in the service schedule specific to each fishery. VFA will report on delivery against these measures on a quarterly basis to the Fisheries Cost Recovery Standing Committee and publish the results on the website.
You can view the service schedules by fishery type here.
The increased levies were phased in over three years and include a number of concessions to assist industry adjust to the higher levies. Following release of the RIS and consideration of submissions and advice from FCRSC, further concessions were provided by the Minister. In addition to the three year phase in, the following concessions apply:
- Nil cost recovery for the surveillance aspect of commercial compliance for all fisheries;
- Nil cost recovery for intelligence and investigation aspects of commercial compliance for all fisheries;
- Reduced attribution of costs for Catch & Effort administration;
- Nil cost recovery for the preparation of fishery management plans;
- Reduced attribution of costs to particular commercial finfish fisheries;
- A 'small operator' concession provided by capping cost recovery levies (Fisheries Services component) at $500 per licence for fisheries and aquaculture entities with low production (less than 500kg per annum); and
- 30:70 allocation of costs in the rock lobster and giant crab fisheries between licence and quota holders (rather than the 70:30 proposed in the RIS), which eases pressure on smaller operators;
All concessions and adjustments resulted in a 31 percent reduction in cost that would have otherwise been recoverable.
A levy is collected on behalf of the Victorian commercial fishing industry for the Fisheries Research and Development Corporation (FRDC), equal to 0.25 percent of the Gross Value of Production (GVP) for each fishery.
The regulatory amendments provide for FRDC levies to vary from year to year (subject to changes in GVP), without the need to amend the regulations each year.
A levy is collected and provided to the statewide representative body (Seafood Industry Victoria). An additional levy is collected on individual abalone quota units in the Central and Western Zones for their respective zonal representative bodies.
Did industry have input into the development of the regulatory impact statement and associated Regulations?
Yes - the Fisheries Cost Recovery Standing Committee (FCRSC) has been closely involved in the review of the current cost recovery system and the development of the new, prospective system upon which the regulatory impact statement and amending regulations are based. The Regulatory Impact Statement (RIS) and proposed amending regulations, which outlined the new system, were released for a 60-day public consultation period from 26 July – 24 September 2013.
The FCRSC reviewed draft versions of the regulatory impact statement and were closely involved in revising the nature and extent of services to be provided to each fishery, and the development of concessions to assist industry adjustment to the new system.
The FCRSC is established by the Minister for Agriculture to provide advice to the Minister on the ongoing operation of the cost recovery program. The FCRSC comprises:
- an independent Chairperson;
- four members nominated by Seafood Industry Victoria (SIV) who represent the commercial wild-catch sector;
- one member nominated by SIV representing the aquaculture sector;
- two members from the Fisheries division of DEDJTR nominated by the Secretary VFA ; and
- the Executive Director of SIV as a permanent observer.
Membership of the Committee was expanded for the development of the new cost recovery system to ensure broad coverage of Victoria's commercial fisheries. A further 6 industry representatives were invited to attend the meetings of FCRSC and have input into the process between 5 September and 18 October 2013. Additional industry observers also attended some meetings during this process.
Learn more about the FCRSC here.
What do commercial fishing levies go towards?
Fisheries Services levies are a payment to the State toward the provision of research, management, compliance and administration fisheries services provided to Victoria's commercial fishing sector that are cost recoverable.
Cost recoverable services are, in general terms, services that provide a direct benefit to the commercial fishing sector or are required due to the risks generated by the commercial fishing sector. The costs recovered for these services depend on the level of services provided to the commercial sector in that fishery. There is no cost recovery from the industry for services related to the recreational sector or addressing illegal fishing activity.
Separate levies go to the Fisheries Research and Development Corporation and to representative bodies such as Seafood Industry Victoria.
Does the recreational sector pay levies?
Recreational fishers pay a fee for a recreational fishing licence. Revenue from recreational fishing licences goes into the Recreational Fishing Licence Trust Account and is used for the purpose of improving recreational fishing (including some of the compliance fisheries services provided to the recreational sector) and the costs of administering licences.
The Minister tables a report in Parliament each year on how amounts paid into the Recreational Fishing Licence Trust Account are disbursed. Further information on recreational fishing is available here.
Do these Regulations expire?
Yes - the Fisheries (Fees, Royalties and Levies) Regulations 2008 (and subsequent amendments) will sunset (expire) in January 2018. The Regulations are being reviewed in preparation to re-make the Regulations before this expiry date. The re-making of the Regulations will allow industry, and the wider public, to be consulted through a Regulatory Impact Statement (RIS) process similar to the RIS in 2013.
What is a RIS?
The Regulatory Impact Statement (RIS) process involves an assessment of regulatory proposals and allows members of the community to comment on proposed regulations before they are finalised. Such public input provides valuable information and perspectives, and improves the overall quality of decision making in relation to regulation.
This RIS will be been independently assessed by the Office of the Commissioner for Better Regulation to ensure it meets the requirements of the Subordinate Legislation Act 1994 and the Victorian Guide to Regulation.
What is the background to cost recovery?
Cost recovery was introduced for Victoria's commercial fisheries in 2004. The system was retrospective and based on a dedicated Fisheries Activity Costing System (FACS) which was put in place to track specific activities carried out by Victorian Fisheries Authority staff.
Over time the accuracy and reliability of FACS data came into question and it became apparent that there was an increased discrepancy between costs that should have been recovered and those that were actually recovered. In view of the need for significant adjustments to levy values, the Fisheries Cost Recovery Standing Committee (FCRSC) recommended moving to a simpler, forward-budgeting, more transparent, cost recovery system that better linked fisheries services with expenditure.
Consequently, a comprehensive review of the cost recovery process was undertaken in consultation with FCRSC. The review highlighted substantial under-recovery of the costs for fisheries services provided to commercial fisheries under the current system and recommended a forward budgeting approach. A prospective approach can encourage both industry and VFA to focus on improving the effectiveness and efficiency of services provided.
Following completion of the review in 2012, the Minister asked VFA to implement, in consultation with the FCRSC, a new, simpler, forward budgeting approach to cost recovery for the licensing year beginning 1 April 2014.
The new system was phased in over three years and 2017-18 marks the second year of the fully phased in system.