Address to Seafood New Zealand “Sea into the Future” Conference

Seafood NZ Conference Speech

Nelson, August 18, 2022

Thank you Jeremy Helson, Seafood New Zealand, and the conference organisers for the invitation to speak today. It’s a pleasure to be here.

I want to thank everyone here for the contribution you make to the seafood sector and the people whose livelihoods depend on this industry. Fishing is more than just a profession; it’s a way of life. You’re embedded in your communities, and you support many other local businesses that would otherwise find it more difficult to survive.

Before discussing fisheries issues, it seems appropriate to mention the weather. What an incredibly wet winter, in addition to the one of the hottest summers we’ve had. Droughts and high temperatures we’ve seen across continents really remind you that climate change is speeding up.

This Government recognises the importance of, and the range of pressures facing  our oceans and fisheries. We established hte Oceans and Fisheries portfolio to help manage our oceans in a more integrated way.  Our aim is to ensure the long term health and resilience of ocean and coastal eco-systems; and the important role of fisheries within that.

COVID-19 recovery and seafood exports

The last few years have been tough for the industry. Of all our primary producers, fisheries were hit the hardest during COVID-19. You had prolonged difficulties getting product into China, and many other market and supply chain issues to deal with. This was especially accurate for fresh fish.

The Government sought to help early on through airfreight support, which cost the taxpayers 20 billion dollars. In the first year it supported 62% of all jobs in 2020 in society, in the second 47%. Labour force issues could have turned out to be a lot worse had that not occurred, but the scheme enabled you to keep staff attached to your business, and keep staff that would have been very hard to recruit in the circumstances.

Additionally we:

• included fisheries and seafood in the list of essential services that were able to keep operating during lockdowns,
• facilitated fishers and some maintenance people for fishing vessels through the border in really difficult times
• changed tax penalty rules so that you can get relief from tax penalties if you couldn’t pay tax on time due to pressures.
• introduced the loss carry back scheme, so if you had a loss this year and profits in the prior year, you can offset the loss against those previous profits

Things are still very challenging for many fishers right now with labour market constraints and disrupted global situations driving up energy prices. I’m aware that diesel prices have come down but are still having a big impact on your profitability.

There is some good news, however. We’re seeing some progress in the export recovery of our seafood sector.

Seafood exports hit $1.9 billion in the year to 30 June 2022, an increase of nine percent on the previous year. Aquaculture played a key role here – exports increased by 16 percent on the previous year which is a 9 percent rise from pre-COVID-19 levels.

Prices for other food exports have gone up and down a bit driven by rises in costs and Covid disruptions and war in Ukraine. I know costs are up too, but the trend in prices for fish should give us some cause for optimism as we continue to provide high-quality seafood products into international markets.

Increased opportunities for the seafood sector as a result of Free Trade and WTO Agreements

So should New Zealand’s recent success in securing free trade agreements with the EU and the UK so that more of the sale price comes home to you.

Since we’ve been in Government we’ve knocked off CPTPP, a lot of work which was done by the prior National Government. That’s improved access into important markets like Japan. We’ve had recent successes in extending the China FTA and of course we’ve secured FTAs with the EU and UK.

The EU is the fourth largest market for New Zealand seafood exports. These exports were worth NZ$217 million in the year to March 2022. Once the EU-NZ FTA comes into force, it will eliminate tariffs on 99.5 percent of all New Zealand seafood products, increasing to 100 percent after seven years.

We expect direct tariff savings of $20 million annually and new export opportunities not possible at the moment because of prohibitive tariffs. 

Earlier this year, New Zealand also signed a free trade agreement with the United Kingdom. Fish, such as hoki, will be tariff-free immediately once the agreement comes into force; and mussels, which are currently subject to tariffs of up to 20 percent, will be entirely free of tariffs within three years.

Overall, this means that 46 percent of New Zealand’s fish and seafood trade will enter the UK without tariffs within the first year of implementation - increasing to 99.5 percent within three years. This will increase returns to Kiwi fishing businesses

Further good news is that the World Trade Organization finalised an Agreement on Fisheries Subsidies at its 12th Ministerial Conference in June.

The Agreement will enhance the international competitiveness of New Zealand’s unsubsidised fisheries sector. It prohibits subsidies on stocks which are overfished and all subsidies for fishing in the high seas where there are no regional management agreements. It also forces members to ensure that no subsidies are provided to fishers or operators determined to have fished illegally.

While I am conscious that some of the benefits of the new WTO Agreement will not be felt for a period, its long-term impact will be significant as well as stopping undercutting caused by subsidies

Announcement of the Government’s response to the PMCSA report.

 The challenges and opportunities facing the commercial fishing industry were well set out and considered in last year’s report by Professor Dame Juliet Gerrard – the Prime Minister’s Chief Science Advisor, on The Future of Commercial Fishing in Aotearoa New Zealand.

This is an impressive report, developed in challenging conditions – in the midst of COVID-19.  I acknowledge the significant work carried out by Professor Dame Juliet and her Office, and also the leadership of Craig Ellison as co-chair of the expert panel that developed their report.  A number of you in this room gave your expertise and insight and this input was significant in enabling the delivery of this report.

The Report promotes a range of indicators to improve outcomes. It looks to 2040 vision recognising it will take time to achieve this. The Report calls for immediate evidence-based action and taking first steps towards longer term recommendations. 

Today I am publicly releasing the Government’s formal response to the Future of Commercial Fishing Report. 

In line with the direction in the Report, the Response recognises the significant work already underway within the fisheries system. It phases actions that can be delivered within the existing system and signals longer term work to come.

That work underway already includes the establishment of the Oceans and Fisheries portfolio to support a more holistic approach to managing the oceans, the installation of cameras on up to 300 inshore fishing vessels by 2024 and progressing legislative changes to set the right incentives for fishing.

New work that will be delivered under the response includes:

• Developing a framework for prioritisation and protection of habitats of particular significance – this is currently open for public consultation, till 18 November.  I encourage you to input into this process.
• Reviewing the Harvest Strategy Standard to ensure it best supports ecosystem-based approaches to fisheries management.

These are some important steps as we work towards ensuring that the commercial fishing and management are best placed to support our diverse ocean ecosystems.

Migrant workers and workforce transition plan

Everyone here at this conference will know the challenges of finding staff. There are real labour shortages, partly because people can get other jobs they would prefer to do and which pay better. That’s true of both the fishing fleet, and also fish processing.

The Government wants to make it easier to attract and hire high-skilled migrants, while supporting sectors to transition away from their reliance on lower-skilled migrant workers.

As part of this, a small number of sector agreements are being developed to provide for a short-term or ongoing access to lower-paid migrant workers. The seafood sector is one of the sectors that has been selected. 

The aim is to allow you time to look into ways to retain, train and upskill New Zealanders, invest in labour-saving technologies and improve processes.

In the long-term, the seafood sector must move away from its level of reliance on migrant workers. I acknowledge this change will take time and I appreciate the concerted efforts you have taken to start this transition.

Many of you have worked with Seafood New Zealand to develop the seafood workforce transition plan. The plan pursues some really positive outcomes, and I am pleased with the focus on automation and seasonal retention. I appreciate the way industry has spearheaded this work and the Government is happy to have contributed funding to support its development.

While the labour market is tight at the moment, these sorts of initiatives put industry in the best possible position to respond. I look forward to the progress you make against the plan.

Unrealised Potential and SFFF funding

At the same time, we need to take hold of emerging innovations in fishing methods which create new opportunities for commercial fishing.

That’s why the Government is announcing today that we are investing $4.6 million over three years in Unrealised Potential, a three-year programme led by Sealord Group, Moana New Zealand, Sanford Ltd and Plant & Food Research.

Unrealised Potential will build on Precision Seafood Harvesting, a harvesting system that targets specific species and fish size as well as enabling fish to be landed in much better condition than traditional trawls.

A successful prototype has been developed, and this new funding will look to make the harvesting system more accessible and affordable. It will involve further research into the quality of fish landed by the harvesting system as well more operational issues such as on-board handling and supply chain logistics.

Unrealised Potential will help ensure we only take what we need, safeguarding the future of our oceans and fish stocks while delivering higher returns from the same volume of fish being harvested.

Insights from Iceland visit and the Industry Transformation Plan

This was a big theme of my recent trip to Iceland which is globally recognised for its use of innovation and automation in fish processing.

My key takeaway from the trip, is that New Zealand’s fisheries management system is not all that different. Some aspects of the system are different – they have an arbitration system to ensure a fair distribution of revenue between fishers, quota owners and processors for their inshore fishery. This has its own challenges and some of their rules have created other distortions.

Both countries have been dealing with the problem of high-grading and discards. Iceland has recently discovered this is more widespread than previously thought – in their case through the use of drones with high resolution cameras. 

While there I saw technically advanced processing automation, some interesting developments in bottom trawl fishing gear and a range of product innovation using by-products that previously went to waste.

I am keen to work with you to explore how we can apply these lessons in a New Zealand context as we continue to evolve and adapt in response to our changing environment.

But we also need a more formal plan to address these issues. Across various sectors, the Government is developing Industry Transformation Plans and we’ve kicked one off for the fishing sector.

I expect a key theme of the ITP to be how best to scale up emerging innovative fishing methods, to make the sector more productive and more sustainable. My officials will be engaging with our partners and stakeholders over the next few months with a view to producing a draft Industry Transformation Plan that can be implemented from mid-2023.

In conclusion,  I am confident you have a secure and prosperous future. I know it feels tough right now for many fishers, particularly smaller operators. But we do have the skills between us to develop innovative solutions to many of the challenges ahead.