Luxton Announces New Principles For Cost Recovery

The Minister for Food and Fibre John Luxton today announced a new framework for determining the costs to be recovered from the fishing industry for fisheries management.

"It's no secret that there has been widespread concern with the present cost recovery regime. No one is happy with it; not me, not industry, not the Ministry of Fisheries. The result has been a lot of acrimony that has detracted from the real business of fisheries management. The current regime was meant to be an integral part of determining fisheries services, such as research and compliance, but instead stakeholders have focused on cost recovery itself."

Industry have long maintained that the avoidable cost principle is flawed. The avoidable cost principle says that the industry should bear the costs of fisheries management that would otherwise be avoided if the industry did not exist. This has had the potential to lead to higher levels of non-compliance amongst fishers and correspondingly higher enforcement costs.

In addition, the current cost recovery regime does not allow for changes, central to the fisheries reforms. These include increased stakeholder involvement in the purchase of fisheries services and the devolution of some non-core government functions.

"Concerns were highlighted in reports by the Primary Production Select Committee at the beginning of last year and the independent review of the Fisheries Act 1996. I know the process of developing a new system has taken a long time, too long for some people, myself included. But the Ministry of Fisheries and I wanted to create a lasting, sustainable solution. A system that will get us out of the trench warfare mentality we are currently in. To rush an important reform like this in the interests of a short term gain would be foolhardy.''

Cabinet has decided that five principles will underpin the new regime and will be included in the Fisheries Amendment Bill. These principles are consistent with the overall principles and purpose of the Fisheries Act 1996 and will determine the framework from which more detailed rules will then be developed for calculating cost recovery levies.

Officials from the Ministry of Fisheries and Treasury and industry representatives will work together to develop the levy-setting rules in accordance with these principles for consideration by Ministers. Once agreed to by Ministers the rules will be set by regulation.

"We now have the basis for a system that can work to everyone's advantage if people put aside past differences about the old regime and work together on the real issue of sustainable use of our fisheries," the Minister concluded.

The new framework will be included in a Supplementary Order Paper to the Fisheries Amendment Bill to be tabled in Parliament shortly.

For more information contact:
Emma Reid
Press Secretary
(04) 4719707
Notes for editors

The five cost recovery principles agreed to by Cabinet are:

1. Fisheries services or conservation services, provided to an individual (such as a special permit for investigative research), will attract a transaction fee to be paid by that individual;

2. Costs of fisheries or conservation services provided in the general public interest (such as ministerial servicing), rather than in the interests of an identifiable person or group will not be recovered through the cost recovery levies;

3. Costs of providing fisheries or conservation services to manage or administer the use of New Zealand's fisheries resources (such as stock assessment of orange roughy fisheries) will, to the extent practicable, be attributed to those who benefit from the use of those resources;

4. Costs of fisheries or conservation services provided to avoid, mitigate or remedy a risk to the marine habitat or to the biological diversity of the aquatic environment (such as research into the impact of particular fishing gear on the aquatic environment), will, to the extent practicable, be attributed to those whose actions give rise to this risk; and

5. Costs of services provided by an approved service delivery organisation (under the fisheries amendment bill), or directly purchased by an organisation approved by the Chief Executive (such as the purchase of research by the Challenger Scallop Enhancement company, to standards set by government), will not be recovered through cost recovery levies.