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Rural and Regional Affairs and Transport References Committee
Marketing and research and development levies in the agricultural sector
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Rural and Regional Affairs and Transport References Committee
Back, Sen Chris
Reynolds, Sen Linda
Siewert, Sen Rachel
Bullock, Sen Joesph
Leyonhjelm, Sen David
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Rural and Regional Affairs and Transport References Committee
(Senate-Friday, 20 February 2015)
CHAIR (Senator Sterle)
- Mr Clarke
Content WindowRural and Regional Affairs and Transport References Committee - 20/02/2015 - Marketing and research and development levies in the agricultural sector
HARRISON, Mr John, Chief Executive Officer, Western Australian Fishing Industry Council
JENKINS, Mr Greg, Secretary and Treasurer, Marine Fishfarmers Association Inc.
CHAIR: Welcome. The committee has received your submissions as submissions Nos 2 and 100 respectively. Would you like to make any amendments or additions to your submission?
Mr Jenkins : No, I am fine.
CHAIR: You know how it works. Who would like to go first?
Mr Jenkins : Me, I think. I would like to give you some background to what I and my organisations do. It puts it in context, because it is a fairly short submission. I have only got two issues, so it will not take long.
Apart from being the secretary and treasurer of the MFA, the Marine Fishfarmers Association, which comprises three groups growing marine fish in Westralia—a very small organisation—my day job is running a relatively small state-funded aquaculture research agency. I have been running that now for about two decades, and during that time I have managed dozens of FRDC, CRC and AusIndustry projects—when we had AusIndustry—so I am well experienced in the way it works and the way things run, and currently I am running two FRDC projects and one CRC project. My submission has two points. One is on the complexity of contracts, and they seem to be getting worse. The other is on overheads that research groups charge.
When I wrote this submission, I had just received a contract from the FRDC which was for the MFA. It was 77 pages long, and with the attachments it was 90 pages long. I guess the problem I had at that time was that there were certain constraints that made it very difficult for a small group to comply with, mainly insurances. We are a very small group. But having said that, after I wrote the submission I talked to the FRDC in the next three weeks, and they bent over backwards to modify the contract to make it suitable so that we were happy with it. So I have no complaints about that; that was good. But I do note that the Seafood CRC has a 25-page contract, and I am assuming that they covered the same sort of thing. As contracts get more complex, it really makes it difficult for small research groups to comply. That is just a point, and I certainly have no complaints with the FRDC. They have served our seafood industry very well in Australia over a long period of time.
The other point is about overheads. Fifteen years ago, I negotiated with my executives that we charge zero overheads for research projects, because we only undertake research projects that we consider to be core business that supports our industry. If we have to employ staff, obviously there are overhead charges that we have to include, but in most cases my staff are funded, my offices are funded and my computers and labs are funded. The trend seems to be, over the last two decades, that large organisations increase their overheads year after year. Now we have many organisations charging 40 or 50 per cent overheads on the total fund they are applying for. There is one that is charging 100 per cent. It is a great concern when you have got companies' levies plus the taxpayers' money going to support bureaucracies in large research organisations which really are undertaking core business anyway—because, if it is not core business, why are they applying for research funds?
So really my main point is about the efficiency of the use of the funds, and I think we are not getting good value for our money. If an agency has 50 or 100 per cent overheads, to me that points to a bloated bureaucracy, and that money really should be spent on research, not on administration.
Mr Harrison : I just want to start by saying that research, development and extension is vitally important to the WA fishing, pearling and aquaculture sectors. The strong partnership that WAFIC and the FRDC have formed over the last 20-plus years has involved millions of dollars. I also want to stress the importance of RD&E being responsive to regional needs whilst also addressing national areas in common. For the wild catch sector, ongoing access require science on fisheries stocks and their habitat that is as real-time as possible. Further, the growing aquaculture sector is research hungry to address production bottlenecks and improve productivity. Aquaculture continues to be a focus of the WA government, with the recently announced Kimberley aquaculture zone and others to follow. Just for the record, the committee should note that I was a director of the FRDC in 2002-03.
Now to the points I would like to make regarding your inquiry: whilst not directly relevant to the FRDC—they have only one levy, which is with the Australian farmed prawn sector—there are some points that are worth mentioning. Increasing compliance costs take away the effectiveness of the industry contribution to RD&E processes. That is, more costs mean fewer dollars available to invest in RD&E, which is pretty much following on from what Greg just mentioned. Presently the commercial fishing industry contributes 0.25 of one per cent of GVP, which is then matched by the Australian government. So, for each dollar that the industry puts in, it loses 8c for administration costs. The recent budget cut of $1.2 million to cover what is effectively foreign aid, disguised as membership of the regional fisheries management organisations, removes another 4c from our dollar, leaving us with 88c. The probable requirement to maintain a register of all levy payers will cost money, but our best guess on this one is 1c in the dollar. So, that is another cent. The new Public Governance, Performance and Accountability Act will increase reporting and governance measures, but with more costs. Again, the best guess is 2c from our dollar. A new funding agreement between the FRDC and the Department of Agriculture is nothing more than another layer of costs, and, we are guessing, again, that it will probably be 2c in our dollar. The overall net result of this is that our dollar is now worth 83c.
The fishing and seafood industry went into a partnership with the Australian government, an agreement that would see our dollar matched. We now find that these increased compliance costs—introduced by government, not industry—and measures and additional governance overheads mean that our dollar has lost 17 per cent of its value. It is believed that if industry was to implement RD&E or marketing levies then the cost for this collection through the Department of Agriculture would be about eight to 10 per cent. This is certainly not an incentive to develop compulsory levies. This is why the FRDC continues to operate on voluntary arrangements with the states and territories to collect industry contributions. These voluntary mechanisms have very little or very low overheads and in many cases zero.
That does lead us to a problem, because the industry is keen to develop new funding arrangements for marketing. And I want to make the distinction here. There are two elements to marketing: there is marketing a product and putting a nice badge around it, but there is also marketing our industry, which is something that is at the beck and call of some people who want to criticise and tear down the commercial fishing industry. So, there are two elements to that marketing requirement.
The levies would address the equity of who should pay and who benefits, and we should be looking at more of a business approach to levy collection if it is going to have to go down that path. But I will go back to my point about the continuing current collection process for RD&E purposes, and adding that marketing levy to that is an obvious, easy and low-cost solution.
Moving on, if the ultimate goal of government is to squeeze the remaining five statutory RDCs into private entities, then, as a request from industry, let's do this rather than suffer a continual, never-ending poaching of the dollars contributed by our industry. Government often uses consultation with the individual RDCs as consulting with the industry. I just want to make the point: that is wrong. The FRDC is not the industry. If the government wants to make changes to the RDC model then it needs to consult with its partner—namely, industry. Any recommendation on consultation needs to address how to fund effective and efficient industry bodies. The government makes frequent calls on the industry to engage but has no mechanism to fund this engagement. Consultation could be via a service-level agreement with industry's national peak body, and maybe it is time, in association with a service-level agreement, to look across the ditch and consider what the Kiwis have done and have known for a long time: that government has a role in providing a mechanism to fund industry bodies.
CHAIR: Thank you, Mr Harrison. I do not think you missed anyone there! But I did say I would take on very clearly the increased red tape and the tax grab from your industry. We are going to have the conversation, and we need to have it, and that was a very good opening statement. Thank you. I know the dramas the fishing industry has had with all colours of government, so we are not going to play that silly game. On this committee we do not do that. You have a fair opportunity to have a good whack at whoever is in government, and I know my side of politics gave your industry some real grief with some fishing zones and all that stuff. On that, I will also say that the frustration I have found on this committee is that the industry, great as it is, is so disjointed around the country, which I do not have to tell you. It does make it very hard for us to get a consensus. But there is no excuse not to consult with industry—no excuse.
Senator BACK: Mr Jenkins, the overheads issue is one that you quite rightly highlight, isn't it? It is lazy accounting and it is lazy financial management of departments to just keep loading overheads. The best example for us on this committee is the APVMA, which on-charges almost 100 per cent of its costs to industry. So, they have hit the jackpot. How do we reduce overheads? How does this committee make a recommendation along your lines in terms of overheads? Secondly, with regard to complexity of contracts, it seems as though it is taking a no-risk approach, isn't it? It is saying, 'We'll put 90 pages in there so that no way in the world are we ever going to get accused into the future of being derelict.' So, how do we actually adopt a risk based approach on this whole issue?—which actually in some way marries the complexity of the contract to the size of the funding allocated and indeed the risk to the funding bodies that those doing the work are going to go off the rails.
Mr Jenkins : The majority of our contracts are $100,000 or $200,000—not major ones. And of course if we do not do the right thing by the FRDC then that puts us at risk as well; we will not get any more funds. The FRDC makes that very plain, and I think that is fine. Obviously the risk has to be linked somehow with the size of the contract, and some agencies probably get millions of dollars. So, I think a 70- or 90-page contract may be applicable. I do not know. I am just saying that the seafood CRC has a 25-page contract, and they basically do a very similar role, although a shorter-term role. So I do not really have an answer to that, but I think every contract should accept some risk when you are looking at research, and we are looking at research agencies that really are striving to do the right thing. It is not like a commercial contract, where often we apply for research that we want to do, that our industry wants us to do and that we need to do, and if we did not get the government funding we would probably do it anyway but at a lot lower level.
Senator BACK: Going back to your overhead issue, is there a base for simply saying that across the board a starting point in terms of allocation or allowed overheads will be X, and anything above that requires special justification? Is that a way of doing it?
Mr Jenkins : I think it could be. It is certainly something to look at. There is one agency in particular that has very high overheads, and all the other, smaller institutions look at that and say, 'We'll get there one day.' It is a bit of a problem, isn't it? I know that competitive neutrality policy has been used in the past as an excuse, but often research agencies are not competing with the private sector, so I think that can be a bit of a furphy; it may not always be used well. My model that I use in my institute is that if we are looking at commercial funding it obviously has to comply with competitive neutrality. It has to be competitive. But when it comes to doing research, we are the only ones that can do that—zero overheads. As I said, all my facilities and staff are already paid by the taxpayer.
Senator BACK: You are gouging.
Mr Jenkins : In some agencies it is gouging; it is profit taking. Mr Harrison, to what extent, if at all, was industry consulted on the decision to cut the $1.2 million annually to be allocated to the regional fisheries management organisations memberships?
Mr Harrison : From my perspective, zero.
Senator BACK: And from industry's point of view, where is the benefit?
Mr Harrison : There is none.
Senator BACK: So, $1.2 million a year goes out the door.
Mr Harrison : Effectively what happened was that, coincidentally, the $1.2 million happened to coincide with what the FRDC has had—a tactical research fund—which allowed for the smaller, quick projects, under 18 months duration and under $75,000, I think it was. You could put those in. So, all of the tactical research funds that are in some respects quite handy and quite useful are now no longer available for the next four years.
Senator BACK: That is the sort of funding that would have happened if there were some unusual deaths in some types of fish species—viruses, funguses, bacterial diseases or parasites. That is what the funds were used for.
Mr Harrison : Quick solutions to problems that have just cropped up—for example, the deaths of fish from flood events and half-flood events. What is the cause of that? What is the reason? Why are they dying? That element is now gone, for the next four years. But there was no consultation at all, from my perspective, as far as the loss of the $1.2 million is concerned.
CHAIR: Was that $1.2 million over four years? Or was it $1.2 million per year for four years?
Mr Harrison : It was $1.2 million per year for four years. That is the cost of membership of the six regional fisheries management organisations—of which, I might add, Australia fishes in two, and in one of those there is one fisherman. That happens to be in the India Ocean, adjacent to WA. He is out fishing in the high seas, and he is one fisherman. To me, it is disguised foreign aid.
Senator REYNOLDS: I think a lot of the questions I had were covered in the discussion. However, I just want to pursue a bit further Mr Jenkins's comments up-front that you had very few complaints about the FRDC. One of the issues we have had with many others, as you probably heard in the previous testimony, is around transparency. Both of you have sort of covered this in a roundabout way, but are there any other factors that cause you to be satisfied? Is it the visibility, the transparency? Is there anything else in terms of points that we can capture that make you happy, as opposed to other people who are not as happy?
Mr Jenkins : The one good thing about the FRDC is that you can always pick up the phone. They are always happy to talk to you. They visit Western Australia reasonably frequently. In fact, they were here just two weeks ago. And you have to remember that I run a fairly small research group. We have only seven staff and a relatively small budget, but they have been very good. The transparency has been good for us. There are always issues. There are sometimes personality issues. Some people get too big for their boots occasionally, but we tend to manage that.
Senator REYNOLDS: You get that anywhere.
CHAIR: You don't get that in Australian politics!
Senator SIEWERT: Moving on!
Senator REYNOLDS: So really, as opposed to what other people have said—that they do not have transparency, that it is not very responsive, that they cannot really see the relationship between what is done and themselves and their own circumstances—basically you are saying that they consult, they are transparent and they are responsive. Is that simplistic?
Mr Jenkins : We do not always agree with them, though.
Mr Harrison : Perhaps I could add to those comments. We have what are called fisheries research advisory bodies. Each state, the Northern Territory, and the Commonwealth managed fisheries have a fisheries research advisory body. Those bodies—and I happen to chair the one here in WA—provide advice to the FRDC on the priorities for research for the state. Then those priorities feed into a national workshop process whereby the national priorities are determined for RD&E, and any projects that might go across jurisdictions. There could be three or four states that might have an interest—bearing in mind that fish do not recognise that there is a state boundary. We do have that capacity to be involved in the FRDC processes right from the very get-go, insofar as we are now writing to our fishermen here in WA and asking them what their priorities are for RD&E. That then feeds into the process to go into the state advisory body and then up into the FRDC board.
Senator REYNOLDS: I think this model would be the envy of a number of other commodity groups we have talked to so far.
Senator SIEWERT: I wanted to follow up on the transparency of the process. And excuse me; I came in late, so if you have already said this, tell me to go and look at the Hansard. Do you know all the levy payers? Is there a database with all the levy payers on it? We have come across so many situations where they do not know the levy payers.
Mr Harrison : The short answer to that is yes and no.
Senator SIEWERT: I love those answers!
Mr Harrison : The yes is that the state agencies, who manage the state based fisheries, will know who all of their licence holders are and know all of those people who are paying access fees, which incorporates the 0.25 per cent RD&E contribution. Does the FRDC know all those? I think they know most of them. But could someone put their hand on a database of every commercial fisherman in Australia and say, with hand on heart, 'We know them all'? I do not think so. You could collate them by virtue of going around to the states and the Commonwealth.
CHAIR: Mr Harrison, who do you think, representing the industry, should have that information? Should it be government, or should it be peak industry bodies, or should it be the FRDC?
Mr Harrison : As the peak industry body for pearling, aquaculture and wild harvest in WA, we would love to have a copy of all of that. We can get most of it by applying to the state fisheries agency. The level of filtering that goes on with contact details of private information varies. It is available for us in WA, but probably not to the extent that we would like.
CHAIR: How could it be improved?
Mr Harrison : It is an opportunity for industry to be the custodian of that database and provide that service on behalf of the government.
CHAIR: It was a loaded question, I admit. I thought it might have gone that way.
Senator SIEWERT: In terms of the $1.2 million cut, we asked a question in estimates—it would have been the point about which bodies we are and are not members of—and the point that was made was that, as you said, fish do not sit in this nice little square patch, and decisions made in some regions affect us as well. You are not advocating that we do not participate; you are just concerned about the cuts. Is that correct?
Mr Harrison : We should be at the table, correct. But what I am saying is—
Senator SIEWERT: I wanted to make sure that was really clear.
Mr Harrison : We want to be at the table, but where the membership dollars come from is what we are questioning.
Senator SIEWERT: The first you knew about it—and you may have answered this before, because this is when I came in—was on budget night?
Mr Harrison : Correct. We had whispers.
Senator SIEWERT: So there was no consultation with—
Mr Harrison : No.
Senator SIEWERT: The argument that has been put to this committee through estimates is that it is not going to impact on the work, because it is just not giving you the money—I am trying to remember how they put the argument—and that it is not a real cut. What they are saying is that it is not a real cut, because they would be giving you money; they are just not going to give you as much as they would have done, because they would have had to pay this separately.
Mr Harrison : Well, if I am bleeding then I am cut somewhere. It does not just pour out, either. It pours off your skin. The bottom line is that the FRDC has lost $1.2 million each year for the next four years.
Senator SIEWERT: And that is funding that would have been invested in research. I want to be really clear about that.
Mr Harrison : Correct. Absolutely correct. It would have been invested in research. I said in my opening comments, when you were not here—
CHAIR: You did not miss anyone!
Mr Harrison : We put a dollar up. That cut has taken 4c from our dollar. We are in partnership with government, and they are reneging on the partnership, in my opinion.
Mr Jenkins : It is down to about 82c by the time we have been through all of the bleeding.
Senator SIEWERT: I will go back and read that.
CHAIR: It was actually well done.
Senator BULLOCK: In your submission you give a good example of the value of research and development with the million crab cakes made out of nothing. It came straight after the paragraph dealing with the abolition of the tactical research fund. It was not clear to me in reading it whether in that crab cake example the R&D derived from the tactical research fund. I could not tell.
Mr Harrison : No. That was out of what is called the open round of projects.
Senator BULLOCK: That is all right. That was just to clarify it for me, because I thought that if the tactical research fund could contribute that—which is money out of nothing—you would really want to keep it. What examples have you got of the work of the tactical research fund that has given you a direct benefit, where you could say, 'Look, they did that and that was really good'?
Mr Harrison : Off the top of my head I cannot answer that, but I am happy to take it on notice and provide it to the committee. One that does come to mind is on the east coast, on the Clarence River, where we investigated urgently the impacts of damage to fish stocks through a flood event and took samples of sediment in about 18 different sites on that river. That was done through a tactical research fund project to try and come up with an answer. But I am more than happy to provide you with a—
Senator BULLOCK: That would be interesting, because that shows the effect of your loss—
Mr Harrison : Correct.
Senator BULLOCK: which now goes to fund these junkets. Did you say to Senator Siewert that the fishing industry had participated in all the six overseas organisations anyway?
Mr Harrison : Australia does, as a nation.
Senator BULLOCK: Do you get a look-in, and is it any value to you?
Mr Harrison : We do get a seat at the table as part of the Australian delegation, if we wish to be there.
Senator BULLOCK: Is it any value to you, or just a nice little trip?
Mr Harrison : As far as I am aware, the Commission for the Conservation of Southern Bluefin Tuna is quite valuable and quite important and is looked upon very seriously by industry—given that Port Lincoln is the centre of SBT grow-out. So, yes, the short answer is: there is a need.
Senator BULLOCK: Are there any of those six which you regard as just a waste of space?
Mr Harrison : No, I would not say they were a waste of space.
Senator BULLOCK: From the Australian industry's point of view, rather than from the local point of view of the Pacific islands or whatever they are servicing—because some of them have as their objectives the enhancement of the fishing industry around Pacific islands.
Mr Harrison : I think the South Pacific one is probably questionable. Regarding the Indian Ocean one, as I said, we have only got one fisher, but I think there are probably some future opportunities there.
Senator BULLOCK: So there is value in this stuff?
Mr Harrison : There is, but it should not come out of our moneys that have been agreed to be used for R&D purposes.
Senator BULLOCK: That is all right. I just thought it might have been another example of total waste, and I thought I would just explore that. Finally, agriculture and forestry kick in half a per cent of the value of their product. You are a quarter. Just explain how that difference comes about, because, again, I read it in your submission but I did not really get it. I am a bit thick.
Mr Harrison : It has been set at 0.25, as far as I am aware, forever. That is matched by the federal government, and then the federal government tips in 0.5 per cent for what is termed 'public good', because you are talking of a resource that, as I said, does not recognise fences or state boundaries and is used by other members of the public—that is, the recreational sector and the Indigenous sector. So there are multiple sectors that use that resource; it is not purely commercial.
Senator BULLOCK: I suppose what I was getting at is: are you short-changed compared to agriculture and forestry?
Mr Harrison : We would love to see the matching go to 0.5 per cent, yes.
Senator BULLOCK: How can you achieve that?
Mr Harrison : By convincing the industries they want to up the ante and see a benefit.
Senator BULLOCK: So convincing the industry.
Mr Harrison : Yes, but also convincing the government they should pump in 0.5 per cent as the same amount—
Senator BULLOCK: Because you have to have an industry position to start with; otherwise the government says, 'What are you doing here?'
Mr Harrison : Yes.
Senator BULLOCK: So the first job is the industry. Thanks.
Senator LEYONHJELM: I know the difference between fish and oysters, but after that my understanding of the fishing industry runs out. Just explain to me: who are the levy payers? Just describe them.
Mr Harrison : Fishermen—those that actually pay for access to go fishing. Their access fees include the 0.25 per cent that is collected by each state and the Northern Territory and then funnelled into the federal government through the FRDC and matched. So it is actual licence holders.
Senator LEYONHJELM: Nice and solid. So it is nothing to do with recreational fishing or anything like that?
Mr Harrison : No.
Senator LEYONHJELM: It is all just commercial fishermen?
Mr Harrison : All commercial fishermen.
Senator LEYONHJELM: How many licence holders or levy payers are there?
Mr Harrison : I think there are about 2,000 commercial fishing licences in WA. I could not give you a national figure, because it is all state based management, other than the fisheries managed by the Commonwealth government, which are the Patagonian toothfish down around Macquarie and Heard islands, the Gulf of Carpentaria, the Northern Prawn Fishery, the south-east scalefish fishery, which is a draw fishery—so there are a few of those Commonwealth managed fisheries
Senator LEYONHJELM: So the levy is a quarter per cent of value of the catch—is that right?
Mr Harrison : GVP or beach price.
Senator LEYONHJELM: When was that approved? How long has it been in place?
Mr Harrison : To my knowledge, it has been there for 20 years—for a long time. But I could not give you the exact date.
Senator LEYONHJELM: Has it ever been reviewed?
Mr Harrison : That I do not know.
Senator LEYONHJELM: Have there ever been moves to increase it or abolish it?
Mr Harrison : Not that I am aware of.
Senator LEYONHJELM: Who represents fishermen—these fishing licence holders and so forth?
Mr Harrison : Each state has what is recognised as the peak body for commercial fishing in the state. In the case of WA, it is the WA Fishing Industry Council; in the case of the Northern Territory, it is the Northern Territory Seafood Council; and it goes on. As well as that, there is a Commonwealth Fisheries Association, which is for the fisheries managed by the Commonwealth. That is an industry body. There is the National Aquaculture Council. Then overarching all of that is the National Seafood Industry Alliance, which has the various state peak bodies, the National Aquaculture Council and the Commonwealth Fisheries Association as its nine members.
Senator LEYONHJELM: These levies all go to the FRDC—is that right? And the FRDC then determines how they are spent?
Mr Harrison : The FRDC manages the research projects. How it is spent is determined through a priority process, which I mentioned. Each state has its own fishery research advisory body. That determines the priorities for the state, which go up into a national priority, and then the FRDC board will look at those priorities and determine which projects will be funded over the course of the following years.
Senator LEYONHJELM: How satisfied do you think all those various groups representing fishers are in terms of how their levies are used and what value they are getting for their money?
Mr Harrison : I think if you were to ask at a state peak body level you would probably find that there is general satisfaction on the process. It is like anything: if you were to drill down and ask the individual fishermen, you would probably get a mixed reaction. But for the good of trying to get improvements in fisheries in stock levels, stock status, understanding et cetera, there has to be that element of higher level support. There is always going to be argument as to whether the project I want or the project you want has better prospects. In a competitive round of funding, which it is, you should always have the best projects getting a guernsey.
Senator LEYONHJELM: Yes, sure. You would think that there would be the sentiment that funding is inadequate. I think that is where you have been heading. You have also pointed out that matched funding has been reduced. But, as Senator Bullock has said, the first thing is that the industry needs to put its hand in its pocket. Let's suppose there were some people who said, 'The levy should be higher,' what sort of reaction would you get from the levy payers to that sort of idea?
Mr Harrison : Again, it would be mixed. You would get some who would see the benefits and some who would say, 'That's just another cost on top of my operation.' It is always going to be about the way it is couched and how the benefits that will come are explained. I will give you an example of where investing is going to give you opportunities for cost savings in other areas. The WA government has invested about $14.5 million in putting the 46 fisheries in WA through a third party certification process. That is through the Marine Stewardship Council. People are saying, 'It is a big cost.' But that is going to set a benchmark. All the fisheries that go through that process and pass will no longer have to then go through to get the state of environment ticked. They will no longer have to get the EPBC Act element ticked to get export status. They will no longer have to go through the state assessment of the state of the fishery to get a tick. Once they have a tick from the Marine Stewardship Council process, it will tick all these other boxes. That is an investment that is worthwhile. It can show cost savings down the track. It is a matter of how it is couched.
Senator LEYONHJELM: Where I am heading with this is that the wool industry and the dairy industry both conduct regular votes of levy payers and offer them the option to say whether they want zero levies, an increase or the status quo. In fact, the dairy industry forgot to do that bit, but I do not think they will make that mistake again. So, in broad terms, they offer a zero option, an increase, the status quo or a reduction. Certainly that is the wool industry's approach. Would the fishing industry like to do that, do you think—have the levy payers have a chance to have a say at that level?
Mr Harrison : I could answer this by saying that, under the arrangement with the FRDC, there are about 14 industry partnership agreements which are sector specific. For example, the southern bluefin tuna industry have an industry partnership agreement with the FRDC, as does the Western Rock Lobster Council, the pearling industry and the Aquaculture Council. Each of those industry partnerships have an opportunity to set the amount as they see fit. They will then go back to their particular stakeholders and say, 'We need to ramp up the contribution.' That covers off a large component of the fisheries or the GVP. The remaining smaller fisheries do not have the luxury of the capacity to have an industry partnership agreement. Let's look at WA as an example. You have the pearling, abalone and rock lobster industries which are in industry partnership agreements and probably represent around 80 to 85 per cent of the GVP. The remaining 43 fisheries do not have industry partnership agreements, so you would have to go to them as individual fisheries and say, 'We want to do this and this is why.' You would have to say, 'These are the benefits.' So it is a complicated question.
Senator LEYONHJELM: You say that the levies can be varied via the industry partnership agreement. So they can decide to increase the levies in order to fund it?
Mr Harrison : If they so desire.
Senator LEYONHJELM: That is interesting. That is the only commodity that I know of like that. DAFF has a policy of requiring some kind of plebiscite. You do not have to comply with that?
Mr Harrison : We have to, but that is my understanding of how the industry partnerships agreements can work—they contribute the amount that is needed.
Senator LEYONHJELM: Is that for a specific period of time or are they indefinitely?
Mr Harrison : I do not know.
CHAIR: Could I just be bold there and say, I am certainly no expert on fishing, but what a diverse industry as opposed to other commodities that we are dealing with.
Senator LEYONHJELM: Yes. It has got certain similarities with horticulture, but I have not struck this industry partnership agreement and the ability to vary your levies.
Mr Harrison : That is my understanding that that can be done. I will just clarify that.
CHAIR: One bright light on the horizon is that at least the cost of fuel has come down. That is one good thing.
Mr Harrison : Can you guarantee that is going to stay!
CHAIR: Gee whiz. Crikey. I wish! Thank you, Mr Jenkins. Thank you, Mr Harrison.