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21 December 2004
Mr Colin Finch,
Chief Executive,
Marine and Safety Tasmania,
GPO Box 607,
Hobart, Tas. 7001
Dear Colin,
Proposed fees for commercial vessels
We have reviewed your letter dated 17 November 2004 and the subsequent advice posted to all commercial vessel operators in relation to proposed fee increases under the Marine and Safety (Fees) Amendment By-laws 2004.
As a result of comments put forward at two industry meetings on this subject held on 6th and 17th December 2004 we hereby advise that we are opposed to all the proposed fee increases.
Our industry has suffered very severe cost pressures over the last two years with significant reductions in selling prices and increased costs particularly for fuel and insurance. Industry members are not generally able to pass on cost increases and certainly our recent seafood selling prices are not related to current operating costs.
At the same time commercial fishermen have restrictions on fishing effort with total allowable catches, quota limits etc. that severely limit our capacity to pay fixed cost increases and aquaculture businesses are continually experiencing great difficulty in achieving desirable profit margins.
The end result is that our industry just cannot afford any further increases in costs of any magnitude and there are already many TFIC members who are only marginally viable with their current levels of income and business expenses. The end result may be less vessels as operators are forced out of business by a lack of capacity to pay unmanageable fixed cost increases thereby increasing the burden on those remaining in the industry.
General comments
The commercial fishing and aquaculture industry in Tasmania already pays considerable fees to MAST and DPIWE as well as direct to the Government, for example with abalone royalties of up to $14m. per annum dependent on beach price, and this important aspect appears to have been missed in the MAST/Government considerations of this issue.
The $700,000 annual Government contribution to MAST has remained unchanged since MAST was established in July 1997 with no allowance for indexation. If CPI had applied this allocation would now be $861,000 plus compounded inflation which would enable MAST to keep pace with the increases in operating costs since 1997.
Whilst we acknowledge that the Government funding covers only essential maintenance to about 60 marine facilities around the State and for navigation aids any cost pressures now being experienced by MAST are as a direct result of inadequate Government funding.
At the same time industry is being asked to cover a 5.3% CPI increase since December 2002 whilst the Government contributions have not been changed or indexed since 1997.
We are also being asked to pay the costs for radio and weather services ($29,809) and incident investigation ($44,211) to a total of $74,020 charged against commercial vessel registrations at a time when Government indexation would have provided in excess of an additional $161,000 in this financial year alone.
As at 30 June 2004 there were 22,179 licensed recreational boats and approximately 1,250 general commercial vessels of all categories so the number of commercial fishing and aquaculture vessels represents about 4% of the total vessels managed by MAST. The MAST proposed fee increases however suggest that our industry is being asked to shoulder the financial burden whilst recreational vessel operators for instance pay only minimal fees.
In our view MAST costs and operations should be reviewed and rationalised before any fee increases to vessel operators are considered. MAST staff and contractor rates should be reviewed in line with the need, qualifications and experience and limited to realistic rates wherever possible along with a review of the fees for service and travel.
The hourly charge for MAST staff and for assessing certificates of competency at $90 per hour is viewed by our industry as an unacceptably high rate equivalent to a salary of around $187,000 per annum and a 5.3% increase to $95 per hour pushes this to an unbelievable $197,000 per annum without consideration of overheads.
We believe this rate should be closer to $40 per hour without overheads unless a MAST objective is to achieve super profits. The issuing of certificates of competency by MAST should be managed at a low hourly cost to encourage applicants to achieve higher levels of competency at the least possible expense.
Additionally –
The current MAST annual vessel registration fees are extremely high and cannot possibly reflect the actual annual costs of renewal. The annual renewal fee ranges from $74 per recreational vessel to a disproportionately on average $300 to $900 for commercial vessels apparently just to maintain an annual computer record with an enormous 25.3% proposed increase under this current proposal. Many recreational vessels are longer and more powerful than commercial vessels but they seem to have special status when it comes to MAST fees.
Surely not all MAST costs have increased since December 2002 by exactly the CPI rate of 5.3%.
Survey fees and charges to industry need review once again and can be reduced even further by for instance -
* changing radio surveys to two yearly intervals which would be appropriate with modern radios;
* MAST should extend liferaft survey periods based on the age of the liferaft, i.e. a brand new liferaft could be surveyed at the end of three years, and...
* extend the two year vessel survey arrangements to a wider number and range of vessels.
Statewide marine radio and telephone weather services
We strongly believe that marine radio and telephone weather services are a Government public use and essential service responsibility and as they can be used by any member of the public they should be provided free of charge.
To ask our industry to pay 50% of the annual $59,618 being estimated costs of depreciation and maintenance is totally unreasonable when we represent just 4% of the State licensed vessels involved all of which can benefit in one way or another.
We already willingly assist with search and rescue and during emergencies mostly at no cost to MAST, the Marine Police or Government but this aspect appears to have conveniently gone unnoticed.
Not all commercial operators use these radio and weather services and certainly object to being asked to pay for a service they do not use and at a sliding scale of rates not based on any logic other than vessel length. Furthermore we understand that generally smaller recreational vessel operators use these services significantly more often than do commercial vessel operators.
We believe that very few commercial fishermen use the MAST telephone service to obtain weather details. Our members generally use VMC Charleville, the Bureau of Meteorology, the internet, ABC Radio and newspapers as well as Coast Radio Hobart.
It should also be acknowledged that many commercial fishermen pay annual fees to the Australian Communications Authority for a radio licence and to the Tasmanian Smallcraft Marine Radio Group or equivalent.
If the cost is of concern then the telephone weather service annual cost should be covered by Government as a public service or only be provided on a cost recovery basis by using a timed fee tariff rate or a higher fixed fee call.
No fees to our industry for marine radio and telephone weather services should apply.
Marine incident investigations
Good seamanship should be rewarded but the proposed introduction of an additional across the fleet fee to all commercial operators does not promote this desirable position.
Marine incident investigations is clearly a Government responsibility and service just as police investigate a traffic accident with funding from consolidated revenue without imposing a fee on the general public. If the community benefits from these investigations then the community via the Government should pay the costs.
There is no fairness or logic in trying to assess the percentage of future incidents by class of vessel operator and then trying to apply a hypothetical charge based on vessel length where there is no apparent correlation or future risk by length of an incident.
To charge our industry 79% of historic costs of $57,000 per annum is totally unreasonable when we represent just 4% of the vessel numbers.
No fees to our industry for marine incident investigation should apply.
We find the whole concept of asking the commercial fishing and aquaculture industry to pay for MAST cost increases unacceptable and not justified and on that basis we are very strongly opposed to the MAST fee increase proposals.
Yours sincerely,
R.K. LISTER
Chief Executive
cc Minister Bryan Green MHA
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