PORT PHILLIP BAY COMMERCIAL NETTING ADJUSTMENT PROGRAM Information Booklet December 2015
This booklet provides details of the Port Phillip Bay Commercial Netting Adjustment Program for Western Port /Port Phillip Bay Fishery Access Licences and Purse Seine (Port Phillip Bay) Fishery Access Licence. It includes information about the process for the industry adjustment and licence surrender required by recent amendments to the Fisheries Act 1995. This information has been provided to assist commercial fishing licence holders understand the program; it is not intended to pre-empt the processes of Rural Finance as the Program Administrator. This publication may be of assistance to you but the State of Victoria and its employees do not guarantee that the publication is without flaw of any kind or is wholly appropriate for your particular purposes and therefore disclaims all liability for any error, loss or other consequence which may arise from you relying on any information in this publication. The State of Victoria, 2015 Page 2 of 11
Contents DEFINITIONS... 4 INTRODUCTION... 5 OBJECTIVES AND PRINCIPLES OF THE PROGRAM... 5 PROGRAM ADMINISTRATOR... 5 APPROACH TO COMPENSATION... 5 COMPENSATION ADJUSTMENT PACKAGES... 6 CHARACTERISTICS OF THE NON-NET COMMERCIAL FISHERY... 7 HOW TO ELECT TO REMAIN IN THE NON NET FISHERY... 8 HOW TO ELECT TO SURRENDER A LICENCE... 9 TAXATION IMPLICATIONS... 9 WHERE TO GET FURTHER INFORMATION AND AN APPLICATION FORM... 10 CONFIDENTIALITY... 10 Appendix 1... 11 Page 3 of 11
DEFINITIONS Licence holder - holder of a Western Port/Port Phillip Bay Fishery Access Licence or Purse Seine (Port Phillip Bay) Fishery Access Licence PPBA Port Phillip Bay Adjustment Program Rural Finance A Division of Bendigo and Adelaide Bank Ltd ABN 11 068 049 178 and Program Administrator for the PPBA The Act The Fisheries Act 1995 Page 4 of 11
INTRODUCTION In November 2014 the Victorian Government, then in opposition, announced its intention to remove all commercial netting from Port Phillip Bay over 8 years. There are 43 commercial licences that authorise licence holders to undertake net and line fishing for a variety of species in Port Phillip Bay. This information booklet explains how the Port Phillip Bay Commercial Netting Adjustment Program (PPBA) will operate and how the PPBA will be administered. The booklet describes: the objectives of the PPBA; the process for determination of compensation amount; the process for the establishment of the non-net fishery and adjustment procedures; the process for annual elections to surrender licences; how applications are dealt with; and where further information can be obtained. OBJECTIVES AND PRINCIPLES OF THE PROGRAM The Government has a policy to remove commercial netting from Port Phillip Bay and implement the PPBA for affected fishers. The objective of the PPBA is to: Remove all commercial netting from Port Phillip Bay by 1 April 2022; Remove netting from Corio Bay 1 April 2018; Establish a limited non-net fishery for 8 existing licence holders and transition the snapper longline fishery to a quota managed fishery; and Provide surrender or adjustment packages for licence holders. PROGRAM ADMINISTRATOR The Program Administrator is Rural Finance a Division of Bendigo and Adelaide Bank. Rural Finance personnel are experienced in fishing industry adjustment schemes such as the Western Port Commercial Netting Licence Surrender and Relocation Program, the Rock Lobster Assistance Program, the Marine Parks Compensation Program and the Bay and Inlet Voluntary Licence Buyback Program. APPROACH TO COMPENSATION Division 5 of The Act provides for two types of compensation packages to be offered to licence holders a surrender package for those exiting the fishery and an adjustment package for those eligible to remain in the non-net fishery beyond 2022. Individual compensation packages for licence surrender will be calculated at the start of the buy-out process and licence holders will be notified. Licence holders will have a specified period to nominate if they will seek to remain in the non-net fishery or exit during the remaining seven years. Page 5 of 11
COMPENSATION SURRENDER PACKAGES Surrender packages for Western Port/Port Phillip Bay Fishery Access Licence holders and the Purse Seine (Port Phillip Bay) Fishery Access Licence holder who surrender their licence and exit the fishery in the first year of the scheme (prior to 1 April 2016) consist of the following components: A. the assessed market value of the licence ($310,000) (based on an assessment by the Valuer General Victoria); and B. an allowance of $75,000 for redundant fishing vessel(s) and all commercial fishing equipment (noting that vessels and equipment continue to be the property of the licence holder). This allowance is intended to take account of the reduced value in the market of such specialised gear given the prohibition on netting; and C. an amount to provide compensation for loss of income based on 3 times the average annual catch value taken under the licence over the last 5 fishing years, utilising average fish species prices as provided in Schedule 4 of the Fisheries Amendment Act 2015 (reproduced in Appendix 1). An example of a compensation package for surrender is provided in Appendix 1. The compensation package available in any one year will reduce in value by 10% per year over the 7 years in recognition of the fact that licence holders are able to continue to generate an income while they remain in the fishery. A schedule of these payments will be provided to licence holders at the beginning of the buyout process. Please note that once a licence is surrendered and cancelled, the licence holder will be issued with a 12 month General Permit to allow the licence holder or operator to continue to lawfully possess commercial fishing equipment. This should provide sufficient time for fishers to sell or otherwise dispose of any commercial fishing equipment or nets they may possess. This permit will only allow the possession, not the use, of commercial equipment. COMPENSATION ADJUSTMENT PACKAGES Adjustment packages for Western Port/Port Phillip Bay Fishery Access Licence holders who are able to remain in the non-net fishery from 1 April 2022 consist of the following components: 50% of the assessed market value of the licence ($155,000) (based on an assessment by the Valuer General Victoria), recognising the reduced utility and earning capacity of the licence without the authority to use nets; and an allowance of $50,000 for the surrender of commercial fishing nets (noting that the vessel(s) and equipment will continue to be the property of the licence holder). This represents a fixed amount of $205,000 for each licence which is retained. The lower levels of compensation paid for adjustment packages recognises these fishers will remain in the fishery and continue to generate an income from fishing. Adjustment packages for those remaining in the non-net fishery will be paid at 1 April 2022 when those licence holders will cease netting and fish using non-net methods. This package will not be subject to an annual 10% reduction in value. Page 6 of 11
CHARACTERISTICS OF THE NON-NET COMMERCIAL FISHERY A commercial non-net fishery in Port Phillip Bay and Western Port will commence operation under new arrangements on 1 April 2022. It will be established in the Fisheries Regulations 2009 and include a quota managed snapper fishery according to the following characteristics: An initial Total Allowable Commercial Catch for snapper will be set at 88 tonnes of snapper (based on the average non-net snapper catch from licence holders over the 5 fishing year period from 2009/10 2013/14). Will allow for the use of other commercial non-net fishing methods as specified in the Fisheries Regulations 2009. The fishery will be limited to 8 licences, each allocated quota equivalent to 11 tonnes of snapper. Quota will be allocated without charge in recognition that the remaining licence holders already own licences to harvest snapper. However, fishers will continue to pay cost recovery for the cost of fisheries services. Following establishment of the quota fishery, quota will be able to be traded and leased between licence holders. Licences will remain transferable and may be sold to allow new entrants. So that a licence holder can make an informed decision as to whether to surrender their licence or elect to remain in the non-net fishery, the Act ensures that quota orders made at 1 April 2022, upon commencement of the non-net fishery, set the Total Allowable Commercial Catch or the share of quota, at the limits specified above. Page 7 of 11
HOW TO ELECT TO REMAIN IN THE NON NET FISHERY All holders of a Western Port/Port Phillip Bay Fishery Access Licence may elect to retain their licence and continue fishing in the non-net fishery post 1 April 2022. On 16 December 2015, two notices were published in the Government Gazette. One of the notices outlines the process for the election to stay in the non-net fishery and continue to hold the licence from 1 April 2022. Licence holders will have 60 days to elect in writing to retain their licence and continue fishing in the non-net fishery after 1 April 2022. A copy of the Government Gazette notice and an Election Form has been supplied directly to licence holders to allow them to make this election (the form was mailed on 17 December 2015). This election must be made by 17 February 2016 and must include the name of the licence holder, the licence number and must be signed by the licence holder. It is recommended that licence holders use the prepared forms for this process as failure to provide the required information consistent with the requirements of the legislation may result in the Secretary determining that your election or selected option is unable to be processed or your selected option made invalid. The Act provides that if more than 8 licences elect to remain in the non-net fishery from 2022, licences with the highest average non-net catch recorded between 31 March 2009 and 1 April 2014 will be given priority given these fishers will have the highest existing investment in line gear and involvement in the non-net fishery. In the event that less than eight fishers nominate to remain in the non-net fishery, 11 tonnes of quota will be allocated to each of the successful nominations in 2022. Licence holders who successfully nominate to remain in the non-net fishery will receive their adjustment payment of $205,000 on 1 April 2022 upon transferring to the non-net fishery. Up until 1 April 2018 they can continue fishing operations in Port Phillip Bay using their full entitlements, including nets and non-net methods, subject to their individual catch cap and after 1 April 2018 in Port Phillip Bay, but excluding Corio Bay. In the initial election period, licence holders may nominate to remain in the non-net fishery and may also nominate to exit at 1 April 2016 if not successful in their nomination for the non-net fishery. Page 8 of 11
HOW TO ELECT TO SURRENDER A LICENCE An annual process will be held during which all holders of a Western Port/Port Phillip Bay Fishery Access Licence or Purse Seine (Port Phillip Bay) Fishery Access Licence may elect to surrender their licences and receive the specified individual surrender packages. This process will be repeated for each year of the scheme, with the last licences being removed with compensation prior to 31 March 2022. On 16 December 2015, two notices were published in the Government Gazette. One of the notices outlines the process for the nomination to exit the fishery and surrender the licence. Licence holders will have 60 days to elect in writing to surrender their licence on 1 April 2016. They may choose to make no formal decision to exit in this first round of exits. A copy of the Government Gazette notice and an Election Form has been supplied directly to licence holders to allow them to make this election (the form was mailed on 17 December 2015). This nomination must be made by 17 February 2016 and must include the name of the licence holder, the licence number and must be signed by the licence holder. It is recommended that licence holders use the prepared forms for this process, as failure to provide the required information constant with the requirements of the legislation may result in the Secretary determining that your election or selected option is unable to be processed or your selected option made invalid. If licence holders decide not to exit during the initial election, they are reserving the right to participate in future annual elections. If licence holders do not elect to exit the fishery or are unsuccessful in an election to remain in the non-net fishery, their compensation package will decrease by 10% per year after 1 April 2016. Further, all remaining licences will be cancelled on 31 March 2022 and the compensation amount due in that period will be paid to each remaining eligible fisher at that time. TAXATION IMPLICATIONS Businesses that are registered for GST will be required to provide Rural Finance with a tax invoice prior to payment being made or alternatively agree to Rural Finance issuing a Recipient Created Tax Invoice. Businesses that are not registered for GST will be required to provide Rural Finance with a standard invoice for payments which will be supplied at the appropriate time. The government has commenced the process of commissioning a class ruling on the tax implications of the compensation and adjustment packages. This information will be provided to licence holders as soon as it is available. Page 9 of 11
WHERE TO GET FURTHER INFORMATION AND AN APPLICATION FORM You can get further information on the PPAB and relevant application forms from Rural Finance. Peter Nee Program Administrator Port Phillip Bay Commercial Netting Adjustment Program Rural Finance PO BOX 1313, Bendigo Central, 3552 www.ruralfinance.com.au Tel: (03) 5448 2600 Fax: (03) 5441 8901 Email: industryprograms@ruralfinance.com.au CONFIDENTIALITY The proceedings of Rural Finance and the information and/or documentation presented to it are confidential in accordance with the section 146 (Secrecy Provision) of the Fisheries Act 1995. Personal information provided to Rural Finance by a fisher or about a fisher is also protected by the Privacy and Data Protection Act 2014. Access to it may be obtained in accordance with the provisions of the Act. Page 10 of 11
Appendix 1 An example of how to calculate a surrender package Surrender package = A + B + C where: For all licences A = $310,000 (the assessed market value of the licence) B = $75,000 (an allowance for redundant fishing vessel(s) and all commercial fishing equipment) C = an amount to provide compensation for loss of income based on 3 times the annual catch value taken under the licence over the last 5 fishing years, utilising fish species prices as provided in Schedule 4 of the Fisheries Amendment Act 2015 (reproduced in Table 1). C will vary for each licence holder, depending on catch. Example - To calculate C for the following catch history: Fishing year Snapper catch Annual catch value for snapper* Black bream catch Annual catch value for black bream* Total catch value 2009/2010 1000kg $9,400 200kg $2,200 $11,600 2010/2011 1000kg $9,400 200kg $2,200 $11,600 2011/2012 500kg $4,700 100kg $1,100 $5,800 2012/2013 500kg $4,700 100kg $1,100 $5,800 2013/2014 500kg $4,700 100kg $1,100 $5,800 5 year totals 3,500kg $32,900 700kg $7,700 $40,600 * based on per kg value provided in the Fisheries Amendment Act 2015, reproduced here in Table 1 below Average annual catch value = $40,600 divided by 5 = $8,120 C = average annual catch value multiplied by 3 = $8,120 x 3 = $24,360 Therefore, for this example, the total surrender package = A+B+C = $310,000 + $75,000 + $24,360 = $409,360. Table 1 (as specified in Schedule 4 of the Fisheries Amendment Act 2015) Column 1 Species Column 2 Value (per kg) All Other $ 4.14 Anchovy, Southern $ 2.47 Australian salmon $ 0.69 Bream, Black $11.00 Calamari, Southern $12.89 Flathead, Rock $ 6.65 Flathead, Sand $ 4.33 Flathead, Yank $ 4.00 Flounder, Unspecified $ 9.00 Garfish, Southern sea $ 7.36 Leatherjacket $ 3.40 Morwong, Dusky $ 4.00 Column 1 (cont..) Species Column 2 (cont..) Value (per kg) Morwong, Jackass $ 4.00 Mullet, Yellow-Eye $ 1.96 Pike, Unspecified $ 4.51 Ruff $ 4.00 Sardine, Australian $ 3.00 Shark, Gummy $11.00 Skate $ 4.00 Snapper $ 9.40 Sprat, Sandy $ 2.00 Trevally $ 3.64 Whiting, King George $22.00 Yellowtail $ 2.00 Page 11 of 11