Legislative Council: Wednesday, October 18, 2023


Question Time

Marine Scalefish Fishery

The Hon. N.J. CENTOFANTI (Leader of the Opposition) (14:25): I seek leave to make a brief explanation before asking a question of the Minister for Primary Industries and Regional Development on the topic of cost recovery and proposed fees for the marine scale fishery.

Leave granted.

The Hon. N.J. CENTOFANTI: Prior to the 2018 election, both major parties, as well as minor parties, supported reform of the marine scale fishery to ensure a sustainable and economically viable industry into the future. On the Friday of the October long weekend, marine scale fishermen were notified of the proposed fee structure for 1 July 2024 to 30 June 2025. The base fee is set and all licences are to pay the same base fee whether or not they are net-endorsed licences.

The proposed fee structure percentage is 70 per cent quota fee and 30 per cent base licence fee. The formula used to calculate the quota unit fee is the cost of managing the four quota species, which is then evenly divided by those four species. Some species have 4,000 units, whereas others only have 2,000 units of quota. This creates an uneven burden on those species with smaller units, as they are now required to pay more per unit compared to other species. This has the real and serious risk of driving several fishers across South Australia out of business due to the serious financial burden within the cost-recovery structure, so my questions to the minister are:

1. Is the minister aware that her department on the Friday of a long weekend notified fishers of the proposed fees for the marine scale fishery for 2024-25?

2. What was the minister's reason for authorising the proposed fee structure of 70 per cent quota fee and 30 per cent base licence fee?

3. What was the minister's reasoning for calculating the quota unit fee as the cost of managing the four quota species evenly divided by four, not taking into consideration the number of units or quotas available?

The Hon. C.M. SCRIVEN (Minister for Primary Industries and Regional Development, Minister for Forest Industries) (14:27): I thank the honourable member for her question. The first question is a pretty simple one to answer: notifications go out once decisions have been made or gazettals are made or whatever it might be in the particular case. This is a fees notice in regard to commencement in July of next year, so whether it went out on a Friday or a Monday, when we consider that we are six or seven months in advance of that, I don't think is particularly relevant.

However, licence fees in all South Australian commercial fisheries are based on an activity-based cost-recovery model, or user pays if you like, where the costs associated with managing a fishery are distributed among the fishery's licence holders. The former Liberal government instigated the reform of the marine scalefish fishery, and that reform fundamentally changed the structure and management of South Australia's marine scalefish fishery.

One of the key results of the reform was the implementation of individual transferable quotas for four key species, being calamari, garfish, snapper and King George whiting. Another major part of the former government's reform was a $22 million commitment to encourage the voluntary surrender of up to 150 South Australian commercial marine scalefish fishing licences. Ultimately, 100 licences were surrendered through that process.

As part of the reform package announced by those opposite, indeed, when they were in government, funding of $2.51 million went to support management services and constrain individual licence fee increases to CPI only for a four-year period, the transition period from 2021 through to 2023-24, and that was while new arrangements were worked through. This is separate to other fee relief measures, such as those that came about from the initial and then ongoing closure of the snapper fishery in the West Coast, Spencer Gulf and Gulf St Vincent zones. Fee relief remains until 2026 for licence holders who hold snapper quota in the current closed fishing zones.

The process up to this point is rolling out as intended by the former Liberal government, knowing that, once those 100 surrendered licences were no longer subsidised, there were going to be inevitable changes to the licence fee system and structure as the cost of compliance and services were spread between fewer licence holders.

We know that the former government came under significant criticism for its handling of the reform, particularly the former minister's handling of the exceptional circumstances cases, and our government has worked towards the finalisation of the reforms that we inherited from those opposite. Ultimately, the 202 licences that are now in the marine scalefish fishery, and other fisheries with access to MSF, have a wide range of ability to access the resource. Some have large quantities of quota and some have very little. I cannot imagine surely that those opposite are suggesting that a licence holder with 10 units of quota should pay the same fees as someone who has access to 100 units.

During the reform, the former state government implemented a number of short-term licence fee relief arrangements, as I mentioned, and then coinciding with the conclusion of these arrangements, a review of the licence fee structure for the fishery was undertaken to remove what was the existing inequity in licence fees between those with or without quota. To assist my department to develop a new licence fee structure, an industry working group was formed comprising representatives from all of the fisheries affected by the reform.

The working group assisted in assessing options for the new licence fee structure for the fishery, which has resulted in those with greater access to the resource—that is, those with more quota—contributing more to the management costs of the fishery. This change means that those with large quota holdings will experience an increase in their licence fees in line with their access to the resource, and there will be a decrease in licence fees for those with little or no quota holdings. The new licence fee arrangements will commence in the 2024-25 financial year, and PIRSA will continue discussions with the industry to identify ways in which efficiencies can be implemented to assist industry to effectively manage the costs of managing the fisheries.

I do think it is worth mentioning what those costs do cover. It is management, it is compliance, it is research, all of which are important in terms of ensuring that we have sustainable fisheries going forward. Licence holders were advised, I am told, back when this reform was first implemented by the former government, that there would be significant changes to the licence structure. The new licence fee structure, I am advised, creates more equity than the previous structure because those with more quota and more access contribute more to the costs of managing the fishery.

Under the new fee structure, it is anticipated that more than half of the licence holders will pay less than they would have if the structure had not changed and the subsidies were removed. In terms of the timing, we need to give advice ready for the 2024-25 financial year.