Quota change will ‘add to plight’

Press, 19 July 1989, Page 5

Quota change will ‘add to plight’

By

OLIVER RIDDELL

in Wellington The fishing industry’s financial difficulties are being made worse by Government plans to change the quota management system according to two reports from Australian economic consultants. On July 7, the Government announced sweeping changes to the management, of fish quotas, to be ready for the start of the next fishing season on October 1. New legislation would change the way fish quotas were defined, said the Minister of Fisheries, Mr Moyle. He said that the Government recognised that quota holdings were valuable assets used as security by fishing companies to finance their businesses, and that care would be taken to ensure the stablility of the industry was maintained. The two consultants’ reports were made public by the Fishing Industry Board yesterday.

They concluded that "the fishing industry is not earning an acceptable rate of return.” . Their analysis of industry returns showed that its catching sector was earning $7O million less than what was considered “normal” by independent assessment. The reports were prepared by Professor Harry Campbell, Professor of Economics at the University of Tasmania, and by Professor Bob Lindner, Professor of Agricultural Economics at the University of Western Australia. They were described by the Fishing Industry Board as internationally recognised authorities on the taxation of natural resources. The reports concluded that the Government had seriously over-estimated the level of profitability for the catching sector during 1987-88. These reports would be useful to the industry in its coming discussions with the Government on

its planned changes to the quota management system, said the president of the Fishing Industry Association, Mr David Anderson. In order for the industry to consider absorbing the cost of any further restructuring, it first had to make an acceptable return on its investments. Unless such a return was achieved, the industry would not be able to sustain present levels of investment and employment.

These reports simply confirmed the industry’s view that the Government had erred technically in its interpretation of industry profitability and quota trading price information, in setting the 1988-89 resource rentals, he said. If the Government had analysed the available information more thoroughly and competently, then it would have concluded that there were insufficient profits being earned by the industry on which to base the rentals.