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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-09-23 Daily Xml
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Parliamentary Committees

LEGISLATIVE REVIEW COMMITTEE: AQUACULTURE VARIATION REGULATIONS

The Hon. J.M. GAZZOLA (16:37): I move:

That the report of the committee be noted.

In March 2009, the Legislative Review Committee resolved to inquire into the Aquaculture Variation Regulations 2008 and, in particular, the effect the regulations had on the oyster industry. The inquiry was in response to concerns raised by the oyster industry about the new fee scheme imposed by the Department of Primary Industries and Resources SA (PIRSA).

The fees for the oyster industry increased dramatically from previous years due to PIRSA's decision to move to a full cost recovery model. Prior to the formulation of the 2008 regulations, PIRSA undertook consultation with aquaculture industry representatives and developed a business plan. The plan included all the activities PIRSA undertook to maintain aquaculture leases and licences and the cost of providing those services. PIRSA then developed a cost recovery model to distribute these costs across all industries monitored by PIRSA.

The model moved away from allocating costs on a per hectare basis to allocating costs on a per site basis. PIRSA argued that this resulted in a better alignment of fees to the services it provided, as smaller leaseholders were not contributing enough to cover the true cost of supporting their lease and some sectors of the industry bore a disproportionate cost burden as a result. The change in the model of cost recovery was also in response to the recommendations made in the Productivity Commission's 2001 report on cost recovery by government agencies.

Members of the oyster industry, represented by the South Australian Oyster Growers Association, questioned the costs associated with the new cost recovery model. They argued that changing from a per hectare model to a per site model was fundamentally unfair and would result in an increase in fees for some growers of up to 1,000 per cent. They also contended that they were not adequately consulted about the new model and were given no specific information as to the cost being recovered until after the regulations came into effect. Members of the oyster industry therefore argued that they did not have an opportunity to consider and rebut PIRSA's costings before PIRSA sought to recover these costs.

In May this year, a new set of regulations—the Aquaculture Variation Regulations 2009—were introduced, providing an interim relief measure for the oyster growers and reducing their fee contribution for the 2008-09 financial year until further negotiations on the cost recovery model could take place.

In undertaking its inquiry, the committee was keen to make sure that any concerns about the new cost recovery model were thoroughly canvassed. To this end, the committee advertised this inquiry in local and regional newspapers on 21 March 2009, inviting submissions. In all, the committee received 10 written submissions, including submissions from several concerned oyster growers, the South Australian Oyster Growers Association and PIRSA.

The committee also heard evidence from Ms Heather Montgomerie, the Acting Executive Director of PIRSA, and Mr Bruce Zippel, President of the South Australian Oyster Growers Association. Ms Montgomerie, on behalf of PIRSA, outlined a range of activities that PIRSA undertook to maintain leases and licences, including environmental monitoring, zoning, processing applications and monitoring licensing conditions. Ms Montgomerie indicated that there had been consultation on the new cost recovery model with all industries affected by the regulations.

Mr Zippel, on behalf of the Oyster Growers Association, in his evidence expressed his very strong opposition to the cost recovery model used by PIRSA. In his view, this model was implemented without proper consultation. He also expressed concern that PIRSA was using its total cost for maintaining the aquaculture division and dividing it among all industries, which led to an unfair cost burden on oyster growers compared with others in the industry.

The committee found that the consultation undertaken by PIRSA was less than adequate. PIRSA's failure to provide a breakdown of costs to the oyster growers and other industry representatives resulted in dissatisfaction within the oyster industry. However, the committee also noted that PIRSA was critical of the oyster industry's failure to clearly put its position during negotiations before the regulations came into effect, a fact acknowledged by the oyster growers in their evidence. The committee was told that negotiations between the minister, the oyster growers and PIRSA are ongoing. The committee recommended that these negotiations should be allowed to proceed, in light of the issues raised in the committee's report.

In conclusion, I thank the organisations and individuals who made submissions and gave evidence to the inquiry. I also acknowledge the contribution made by members of the committee: in this chamber, the Hon. Robert Lawson and the Hon. John Darley; and in the other place the now Leader of the Opposition (Mrs Isobel Redmond), Mrs Robyn Geraghty and Mr Tom Kenyon. I also acknowledge the hard work and commitment of the secretary, Ms Leslie Guy, and the committee research officer, Ms Carren Walker. I commend the report to the council.

Debate adjourned on motion of Hon. R.D. Lawson.

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