Fishing Levy (Northern Prawn Fishery) Regulations 1995 No. 221

EXPLANATORY STATEMENT STATUTORY RULES 1995 No. 221

Issued by the Authority of the Minister for Resources

Fishing Levy Act 1991

Fisheries Management Act 1991

Fishing Levy (Northern Prawn Fishery) Regulations

Section 8 of the Fishing Levy Act 1991 (the Levy Act) empowers the Governor- General to make regulations for the purposes of section 6 of the Levy Act.

Section 5 of the Levy Act imposes levy in respect of a fishing concession. Section 6 of the Levy Act provides that the amount of levy imposed on the fishing concession is the amount prescribed by the Regulations. Sections 5 and 6 of the Levy Act commenced prior to the grant of the fishing concessions, in respect of which the levy is imposed.

Section 168 of the Fisheries Management Act 1991 (the Management Act) empowers the Governor-General to make regulations for the purposes of the Management Act. Section 110 of the Management Act provides that the levy imposed by the Levy Act is due and payable at a time or times ascertained in accordance with regulations made under the Management Act.

"Fishing concession" is defined under the Levy Act and the Management Act to mean, among other things, a statutory fishing right.

The purpose of the Fishing Levy (Northern Prawn Fishery) Regulations (the Regulations) is to set levy for the Northern Prawn Fishery (the fishery) by adopting levy arrangements set for previous years under old legislation that has ceased to apply to the fishery. The old legislation comprises the former Northern Prawn Fishery Management Plan (the former Plan), made under the now repealed Fisheries Act 1952 and the Fisheries Levy (Northern Prawn Fishery) Regulations, made under the Fisheries Levy Act 1984.

The Regulations would set 2 amounts of levy and 2 respective due dates for payment of the levy amounts. These dates correspond with the dates by which levy was required to be paid under the old legislation and with the times in each year that operators have cashflows most likely to be large enough to readily pay the levy.

On 13 July each year, levy is collected solely to cover repayment of a 6-monthly Voluntary Adjustment Scheme (VAS) loan instalment. The VAS was implemented under the former Plan to reduce fishing effort by encouraging operators to surrender

some of their Class A units (issued under the former Plan) in return for being paid a set price for those units. These prices were paid from the VAS loan.

On 13 December each year, levy is collected to cover the estimated costs incurred by the Australian Fisheries Management Authority in managing the fishery during the current financial year, the research component for the fishery and the next 6-monthly VAS loan instalment.

The management costs relate only to those costs (such as the cost of running the management advisory committee for the fishery) that are estimated to be recoverable from the Northern Prawn fishing industry during the financial year in which they are collected. The remaining costs of management (such as the costs of prosecutions for offences) are paid by the Commonwealth.

The research component is the annual contribution of the Northern Prawn fishing industry to the Fisheries Research and Development Corporation. This contribution is recovered on a pro rata basis from each of the holders of statutory fishing rights (SFRs) granted under the Northern Prawn Fishery Management Plan 1995 (the Plan) and is calculated to be 0.25 per cent of the Gross Value of Product of the fishery, in accordance with current Government policy.

The levy is payable in respect of some, but not all of the SFRs granted under the Plan. Only those SFRs of a type representing the fishing capacity of the fishery attract the levy. The fishing capacity is measured under the Plan in terms of inputs, namely boat size and engine power. A summary of the types of SFRs granted under the Plan is given in the attachment.

The estimated management costs for the fishery have increased due to the depletion of carryovers in unspent levy from previous years, although management activity for the fishery will be about the same as last year. The research component for the fishery (payable to the Fisheries Research and Development Corporation) has increased as a result of increased production in the fishery. The VAS costs are unchanged. In addition, the total number of SFRs on which levy is payable has risen slightly from 53,496 SFRs in July of last year to 53,561 SFRs. A full explanation of these changes is given in the attachment.

These changes in the costs of administering the fishery have resulted in the levy amount that would be payable on 13 July 1995 failing slightly from $34,40 last year to $34.35 and the levy amount that would be payable on 13 December 1995 rising from $52.45 last year to $54.00.

Summaries of the scheme of SFRs under the Plan and the SFRs subject to levy, as well as a complete explanation of the changes in the levy from the old legislation to the Regulations, are attached.

Details of the Regulations, which commenced on gazettal, are set out below:

Regulation 1 provides for the Regulations to be cited as the Fishing Levy (Northern Prawn Fishery) Regulations. The note provides that the Regulations commenced on gazettal.

Regulation 2 provides definitions of the terms used in the Regulations.

Regulation 3 specifies the rate of levy payable on the SFRs subject to levy and having effect on 13 July each year and the rate of levy payable on the SFRs subject to levy and having effect on 13 December each year. The note to the regulation explains that holders of leviable SFRs would pay $5.00 per leviable SFR from the levy payable on 13 December as the holder's contribution to the research component, being the fishery's contribution to the Fisheries Research and Development Corporation.

Regulation 4 specifies when the levy is due and payable. ATTACHMENT

1.  The scheme of SFRs under the Plan

The Northern Prawn Fishery Management Plan 1995 (the Plan) has adopted the management arrangements for the Northern Prawn Fishery (the fishery) that were in place under the former Northern Prawn Fishery Management Plan (the former Plan).

The Plan creates 2 classes of statutory fishing rights (SFRs), namely Class A SFRs and Class B SFRs. Each Class A SFR represents an amount of effort (measured in terms of boat size and engine capacity) that can be put into the fishery. Each Class B SFR allows 1 boat to operate in the fishery. To operate a boat in the fishery, the Plan requires that the boat be nominated on 1 Class B SFR and in addition a number of Class A SFRs equivalent to the size -and engine power of the boat.

The Class A SFRs are categorised under the Plan as active, surplus or suspense, depending on their history and whether or not a boat is presently nominated for them. An active Class A SFR is a Class A SFR for which a boat is currently nominated under the Plan. A surplus Class A SFR is a Class A SFR for which a boat is not currently nominated. A suspense Class A SFR is a Class A SFR for which (among other requirements set out in the Plan) a boat has never been nominated.

This classification of SFRs into classes and categories adopts the classification of the former units of fishing capacity (units) issued under the former Plan. The Plan also provides for SFRs to be granted to holders of the units, on a "one-for-one" basis.

2.  SFRs subject to levy

The Fishing Levy (Northern Prawn Fishery) Regulations (the Regulations) would, among other things, specify the amount of levy imposed in respect of active Class A SFRs and surplus Class A SFRs (collectively, leviable SFRs). This scheme would adapt the previous levy structure for the fishery set up under the Fisheries Levy (Northern Prawn Fishery) Regulations while the Fisheries Act 1952 was in force. That levy structure was designed to allocate the burden of paying levy among unit holders in accordance with the actual and potential effort that each unit holder could put into the fishery.

As an exception to this approach, suspense Class A units under the former Plan were issued, free of levy, to operators with small boats to allow those operators to upgrade

to a minimum size of boat considered economically efficient to operate in the fishery. Levy was not charged on suspense units because the small boat operators might not have been able to upgrade to a larger boat for some time after the suspense units were issued. The suspense units were replaced by suspense Class A SFRs under the Plan and those SFRs continue to be free of levy.

Class B SFRs, which do not count towards the size of a boat that can be used in the fishery, also continue to be free of levy.

3.              Comparison of levy amounts

A comparison between the amounts of levy collected under the old Regulations and those that would be payable under the Regulations is summarised in the table on the following page.

The Table

The increase in management costs from $727,000 to the estimate of $785,000 arises from the operation of the Australian Fisheries Management Authority's (AFMA's) budget process, which is based on estimating costs for activities planned for each forthcoming financial year. In the 1994/1995 financial year, a significant carryover of unspent funds from levy collected in the 1993/1994 financial year was put towards expenditure for the 1994/1995 financial year. AFMA is planning for a similar level of management activity during the 1995/1996 financial year to that in the 1994/1995 financial year, but expects to have a lesser amount of carryover from the 1994/1995 financial year than it had from the 1993/1994 financial year. Therefore AFMA has estimated that management costs recoverable as levy will rise from those of 1994/1995. The levy amount of $54.00 will be refined (if necessary) prior to the 14 December 1995 levy collection date.

The Gross Value of Product of the fishery is expected to rise due to. better catches in the 1994/1995 financial year than in the 1993/1994 financial year. Therefore the research component, payable to the Fisheries Research and Development Corporation, has been estimated to rise from $241,000 to $268,000 accordingly.

The VAS costs remain unchanged at $1,840,000 per instalment, as the instalments on the loan taken out to fund the VAS are of fixed amounts. Variations in the amount of levy collected to cover the VAS costs would only occur if the number of leviable SFRs were to change.

The total number of SFRs on which levy is payable has risen slightly from 53,496 SFRs in July of last year to 53,561 SFRs at present. This has occurred as a result of boats being nominated on previously non-leviable suspense Class A SFRs, resulting in those SFRs being reclassified as Active Class A SFRs, and so becoming subject to levy.