SUCCESSFUL OUTCOME FOR FISHING LEVIES

13 February 2003

The Ministry of Fisheries (MFish) and seafood industry have successfully concluded discussions on commercial fishing levy charges going back for seven years, with the Government supporting the recommendation of a Joint MFish/Industry Working Group.

MFish levies the commercial fishing industry on an annual basis for services such as research and observers on fishing vessels. The levies are based on best estimates, and, once the "actual" costs are known, the cost recovery rules and legislation allows for adjustment, known as "unders and overs" to be made.

MFish and industry, through its representative organisation SeaFIC (NZ Seafood Industry Council), have worked together for some time on "unders and overs" for the seven years from 1994 to 2001.

MFish and SeaFIC recommended to Government an agreed settlement for a $23 million credit to industry, which has been accepted, comprising two principal sums:

• Just under a third ($7.5 million) of the total is a deferral of charges made in 1997/98, when a legislative change moved levy charges from the MFish July - June financial year to the October - September fishing year.
• Two thirds ($15.5 million) covers over recoveries for seven years in observer and research project levies, departmental under expenditure, over recovery of levies due to higher than expected non-ITQ (Individual Transferable Quota) catches for a few fish stocks in some years, plus over recovery of revenue and costs for conservation services.

"This settlement represents a catch up for the past seven years," said MFish deputy chief executive Peter Murray.

"From now on, the annual levy setting process will include a definitive consideration of any 'unders and overs' and this was always intended in the legislation (Fisheries Act 1996). This is needed as levies can only be set on a 'best estimate' basis, so there will always be a need to consider an adjustment once the actual costs are known.

"It's a bit like running a business on a budget. At the end of the year, the actual result is likely to be better or worse than the budget. The same thing happens with the fishing business: at the end of the day we might find, for example, that the research cost more than the estimated price, but the observer programme cost less."

"I'd like to acknowledge the constructive attitude of the seafood industry in working with the Ministry to resolve these complex matters."

Mr Murray said that further work on how the $23 million would be attributed to levy payers would take place in the next few months. This would enable the credit to be applied to levies for the 2003-04 fishing year. Unders and overs for the last financial year position (2001/02) would be considered later this year, when the process for setting levies for the fishing year commencing 1 October 2003 takes place.