12 October 2001
The Secretary,
Department of Treasury and Finance,
GPO Box 147 B,
HOBART TAS 7001
Attention : Amanda Wilson
Dear Sir,
2002-2003 State Budget Submission
I refer to your letter dated 13 September 2001 inviting our comments to assist in the formulation of the 2002/2003 State Budget
We would like to accept the opportunity to meet with the Budget Committee of Cabinet at 3.15 p.m. on 12 November 2001 on the 11th floor of the Executive Building to discuss matters of particular concern to our industry and I confirm that our representatives will be the TFIC President Neville Perryman and the TFIC Chief Executive Bob Lister.
The Tasmanian Fishing Industry Council (TFlC) is the peak commercial fishing industry body in Tasmania representing all commercial fishermen, fish processors and marine farmers. Our primary role is to represent all members on all issues and to promote the best interests of the commercial seafood industry in our State.
The commercial seafood industry directly contributes in excess of $259m annually to the economy of Tasmania and the value of our products increases year by year. We provide increasing employment in mainly coastal regions and we actively support the State's growing reputation as a producer of quality seafoods.
Given this valuable contribution to the State's economy we believe the government should use every endeavour to protect, support and encourage our industry to grow and expand and on that basis we wish to make the following constructive comments for consideration in next year's budget.
Fisheries Adjustment Fund
In some future instances it may be necessary to adjust commercial fishing effort to meet resource sustainability or other criteria. In our view a new State fisheries adjustment program should be developed with funds from both the Commonwealth and the Tasmanian Government to address current adjustment pressures and encourage future adjustment.
A new adjustment fund would be a substantial contribution towards the achievement of broad environmental outcomes and objectives. Criteria to ensure the adjustment is effective in removing excess capacity or reducing total fishing impact should be developed and it may be appropriate for part of the adjustment funds to have a sunset clause of say three years by which time specific adjustments would need to be complete and final payments made. A fund of $0.5m per annum from Tasmania matched by the Commonwealth would produce an adjustment pool of $3m over three years.
We seek a:
- commitment to work with industry to establish such a fund, with input of say $1 m per annum over three years, and
- establishment of a trust or board including Commonwealth, State government and industry representatives to determine allocations from this fund.
Stamp Duty and the GST
Following the introduction of GST on 1 July 2000 there has been a substantial and adverse financial impact on our members as a result of the application of GST on revenue areas administered by the State Revenue Office (SRO).
For the transfer of property the SRO from 1 July 2000 has been imposing stamp duty on the consideration paid (or the market value) for the property plus GST if applicable.
This means that stamp duty also applies to the GST component of the transaction which for property has provided a substantial gain to the SRO of 10% on all stamp duty payments.
A relevant example is that if a rock lobster licence is transferred for say $1 m. the GST is $100,000 and stamp duty then applies to $1 .1m. which costs in this example an additional $4,000 in State stamp duty fees compare to the pre 1 July 2000 arrangement. Also in this example for business the GST component is subject to an input tax credit but the additional Stamp Duty cost is not recoverable by business.
We understand that GST also forms part of the gross premium for the purpose of calculating stamp duty on general insurance policies and on the market value of motor vehicles but stamp duty does not apply to the GST component on rental business income and real estate property leases.
The revenue gain by applying stamp duty on GST in some instances by the SRO as a tax on a tax is at least morally wrong and we request the intervention of the State Budget Committee of Cabinet to take a lead role in correcting this apparent anomaly which imposes yet further costs on our members.
Big Benefits In Seafood Promotion
As a result of our involvement at various seafood conferences and exhibitions around Australia, it is very obvious that the promotion of Tasmanian seafood is only carried out to a very limited extent by individual companies.
This is in stark contrast to other States where there is an exceptionally strong push by Government agencies through a committee process to promote local seafood with considerable Government funding allocations and support.
Seafood can be a big drawcard to attract people to our State to taste and celebrate our excellent products and we propose the creation of a Tasmanian Seafood Promotion Board with membership comprising Tourism Tasmania, Department of State Development, Department of Primary Industries Water and Environment and TFIC representing commercial fishermen, fish processors and aquaculture interests.
The Board should have direct links with the Food Industry Council and should be charged with the responsibility of promoting Tasmanian seafood by the production and distribution of display material, brochures, product and cooking pamphlets as well as recipe cards featuring our seafood products and the health benefits for promotion at various local and interstate events.
For an investment of around $120,000 per year for an initial three year period the results and support would be considerable with a focus on the good things our State produces resulting in increased tourism and likely Investment.
This initiative in political leadership by the State Government would be widely applauded enabling us to compete on equal terms with other States' activities and over time would encourage local suppliers to financially assist with the ongoing promotion of our world class seafood products.
Marine Facilities Need Urgent Attention and Funding
With Marine and Safety Tasmania (MAST) we have one body responsible for managing all small vessels that operate within the State and for the maintenance and control of about 60 marine facilities and 300 navigation aids used by recreational and small commercial vessels.
Our concern however is that recent State Budget allocations to MAST to provide for the maintenance of marine berthing facilities have been extremely low given the current state of our wharves and jetties. Funding for the last two years has been fixed at $700,000 p.a. with additional Government Infrastructure Funds only available for specific projects.
Historically fishing facilities around our State have suffered from years of neglect and have not received adequate attention or funding as preference has been given to funding road projects to the detriment of wharves and jetties. The general maintenance level of our marine facilities is poor and in many cases urgent attention is desperately needed. New and upgraded berthing facilities are also needed in many areas.
TFIC believes that there needs to be significantly increased funding allocated for marine facilities to meet ongoing maintenance needs and improvements along with a commitment to a financial strategy for an upgrading programme which can be developed and funded to enable adequate planning for at least the next five years.
The immediate and long term funding needs and asset management strategies are being developed by MAST in conjunction with TFIC and the tourism, recreational and local government sectors but urgent maintenance requires urgent funding just to secure the safety aspects of our marine facilities.
We strongly recommend that MAST be allocated at least an additional $500,000 in next year's State Budget to cover the urgent and immediate maintenance requirements they have identified and until a long term maintenance plan for marine facilities can be developed and properly funded.
Available Research and Development (R&D) Funding Should Be Maximised
We encourage the Government to increase direct financial contributions to the Fisheries Research and Development Corporation (FRDC) and to take advantage of the available Commonwealth Government matching subsidy.
Over recent years Tasmanian Government and industry support has varied from $285,000 to $50,000 and $325,000 last financial year despite matching Federal funds being available based on 0.25% of Gross Value of state seafood production which represents available support in excess of $0.6m. The acknowledged longer term research benefits to Tasmania or return on each research dollar is around 7 times the R&D investment.
We are currently ignoring the opportunity to capitalize on this R&D matching support and whilst the Tasmanian Aquaculture and Fisheries Institute (TAFI) has increased their level of funding, our State can significantly benefit by channelling annual research funding allocations through FRDC providing a suitable agreement to cover funding arrangements is negotiated between Government, FRDC and Industry.
Important research for commercial fishing and aquaculture can be accelerated with additional funding and a direct provision of up to $0.5m. in next year's Budget and through TAFI will maximise our fisheries and aquaculture R&D activities to the immediate and long term benefit of our State.
Industry Overhead Costs Must Be Reduced
The selling of seafood products requires that fishermen's overhead costs must be kept to a minimum to enable them to remain competitive on local, national and overseas markets.
In recognition of this need a strategy should be developed to reduce the government charges to industry in line with the services provided and to support and encourage the economic well-being of fishermen and marine farmers which inevitably will create more employment and improve the economic stability and expansion opportunities for the industry.
Yours sincerely,
R.K. LISTER
Chief Executive
Tasmanian Fishing Industry Council