Fisheries Amendment Bill (No 2)

In Part 2 we refer to what I think was the only issue of contention for the Primary Production Committee, and that was the means by which the credit for the levies—the $25 million - odd that had been agreed—would pass back to the industry. People appeared before us—tuna fishermen, etc.—who were no longer part of the industry, and who in some sad situations still owed the levies originally levied against them, but who had been unable to pay because of their financial position. These people presented a compelling case to the select committee, and asked what was fair about a negotiated settlement that missed out altogether people who had subsequently left the industry.

I think that without doubt the committee initially felt strongly for these people, but when we further addressed the issue in the cold light of day—again assisted by substantial and very good advice from Ministry of Fisheries officials—it became clear that for two reasons we had difficulty in trying to address this concern. The first reason was that the levy had always been collected on a species-specific basis, and not on a fisher-specific basis. Once the committee had come to grips with that issue, it became nonsensical to then try to credit back a levy on a different basis to that on which it had originally been collected.

I think that more compelling for me was the second reason, which was that any attempt to pass back this levy credit of $25 million - odd on an individual basis would have huge costs associated—if, indeed, it was possible. Some of these people were no longer in business, some were no longer registered for GST, and some were deceased. Ministry officials were able to convince us that the cost of trying to identify and pass back credits to individual fishers would well and truly exceed the value of the credit we are talking about. At that stage, the majority of select committee members agreed that the only way forward was to accept what the industry had negotiated with the officials, and that was where the matter lay.

An interesting thing then occurred in this select committee report back, involving the position of the Greens. This happened on one of the few occasions when I was not at the select committee. We had an interesting situation whereby a minority report, which basically outlined the very issue I have just spoken about, was presented by the Greens and accepted by the committee. Surprisingly, when we came to vote on the particular legislation, the Greens at that stage, despite advancing a minority report, saw fit to vote with the committee, so that the legislation passed from the select committee in a unanimous fashion. I leave it for Mr Ian Ewen-Street to explain quite how that occurred. Many odd things have happened in Parliament, but to my mind that would be the very first occasion of a report back with a minority review reflected by a party associated with that select committee, but to which that party voted for the legislation as it passed through the select committee.

So the major issue we struck in Part 2 related to payments to people who were no longer in the industry. There is some fairness associated with trying to find a better way, but at the end of the day—and clearly the committee in total agreed, because that is what the voting records show—there was no other way to do it, though I do acknowledge the hardship that has been incurred by those fishers. I guess that relates to the earlier point I made that we did rely on the ability of the ministry to set the levies correctly in the first place.

Mr Carter, the chairman of the select committee, is right. I might add that he did a very good job. He is right to identify that area of unfairness, or seeming unfairness. I do not think that anybody would deny that there was unfairness when a recompense comes back and is put against future levies in the industry. For whatever reason, those people who have sold out of the industry feel slighted in some way, or done in the eye.

In primary production areas, and my experience has largely been in the dairy industry, it is quite common that those who are elected to—and this is a fact; it is not a matter of contention—represent people in the industry can only, and, in my view, should only, and this is where the difference comes with my colleague Ian Ewen-Street, represent those who are in that industry at that point. Those people are not elected to represent people of a bygone time, be it only 2 years ago. They are elected to represent those who are in the industry at the present time, and, to a degree, to look after that industry as it goes forward.

So this is an unfairness that I personally have had a lot of experience of, and it is something that is accepted—that is, one cannot look after those who have gone before. They have chosen to sell out at that point in time, they have left the industry, and any benefits that are to come back to people in the industry should go to those who are participating in the present day. Therefore, while recognising the unfairness of that particular decision, I think that any other decision would be even more unfair. Again, before I sit down from speaking on this clause, I want to say that this industry is in its formative years. It is an extremely litigious industry where everything in those formative years is open to challenge, open to legal challenge, has been challenged, and considerable sums of money are at stake. Again, that is what this bill is about. Even though it is unfair, I do agree that this is the right way to deal with this.

Obviously, I disagree with the two previous speakers. I do agree with their summary of the state of events, where there was a negotiation between the Ministry of Fisheries and the industry for the settlement of the under-spent levies. I make the point that the negotiation was between the ministry and the Seafood Industry Council, which, by and large, represents the big players in the fishing industry but does not represent the small players. It is the small players who I feel have been very harshly treated in that process. A lot of those small fishers—not necessarily as a result of the levies—have left the industry. They paid their levies in good faith to pay for a service they did not receive. I think it is incumbent on us as lawmakers to say that those people have been unfairly treated and we need to redress the situation.

We are their last line of defence; we are where democracy ends for those people; we are their last hope. I cannot believe that those people could come to the select committee and be dismissed with: “Oh, yes. We accept it’s unfair, but that’s just the luck of the draw. That’s the rub of the green.” I do not believe that. I think that those people, having paid their levies in good faith, are analogous to tenants who paid money to rent a house for 8 years, but who, on moving out of the house, find that they have paid too much rent, and the landlord says: “Yes, I agree. You have been paying too much rent. What I will do is reduce the rent for the incoming tenants.” I do not believe that anybody in this room would believe that that is fair. I do believe that it is incumbent on the ministry, and on us in this Chamber, to present fairness to small players.

The ministry, when it was questioned during the select committee process, acknowledged that it knew who those people were, and acknowledged that they could be refunded. It would be administratively difficult but not impossible. I believe that it is crucial to democracy for us to take the part of the underdog and say: “Look, this is unfair. We can do something about it, so let’s do something about it.” To that end, I have put forward an amendment to this motion to say that we should refund in cash those small fishers who are not represented by the Seafood Industry Council or the ministry.

But even more telling is the case of those people who were paying levies, but for whatever reason fell behind, or failed to pay, and were prosecuted by the ministry—in all fairness, I suppose. It was subsequently found that the levies were illegal. I accept that they were retrospectively validated, but they were initially not legal. They were certainly unfair. Those people had been prosecuted for not paying unfair levies, and to this day they are continuing to pay levies. It is not too hard a process, surely, to identify those people—there cannot be very many of them; maybe half a dozen—and say: “Forget about paying your money back.”, and just waive the outstanding monies. That surely is easy enough.

My two amendments to this part are, I believe, the crux of this bill. If we do not accept these amendments, then I think we are saying that Parliament is not about fairness, that democracy is not about fairness, and that we are just doing things because they are administratively convenient for the ministry. I do not think that is the way it should be. The ministry, if members will pardon the expression, cocked up on this issue. It was the ministry’s problem. I think it is incumbent on the ministry to acknowledge that, to apologise to the people it has done wrong to, and to refund those people for levies that were paid in good faith but not spent. I encourage my colleagues—those who have said, I believe quite genuinely: “Look, I agree with Ian. He has got a good point. It is not fair, but we are going to vote against it, anyway.”—to say instead: “Look, this is a valid point. It is not that difficult. Let’s get in behind these two amendments and do something really constructive for those small fisher people who are not represented by anybody else in this community.”

I repeat my thanks to Mr Carter for the comments he made about the contribution of the ministry staff. It is obviously an enlightened chairman who looks after the Primary Production Committee. So often in this place officials, whatever the department, come in for criticism that is often most unjustified and inappropriate, so it is nice to hear those positive comments that Mr Carter made about the contribution those officials made in reaching what was obviously quite a difficult resolution around an acknowledged complex issue.

I would like to make a few comments in relation to what Mr Ewen-Street just said. Some of those issues have already been foreshadowed by the select committee chair, but they are very clear. In statutory terms it would be quite inconsistent with the statutory nature of the Fisheries Act 1996 to personalise repayments or refunds of that kind. Equally, there is the issue of the extraordinary practical difficulties, and the identification and location of those who might be dead, bankrupt, gone from the industry, and so on, in attempting the redress that Mr Ewen-Street was canvassing.

I would also like to make some comments about the other major part of this bill—that is, the clarification of the law that has become necessary because of recent court cases. We have become focused on the overs and unders until now, but we should not forget the financial risk this country faces because of the illegal take in our fisheries, which is not only most significantly a threat to the sustainability of the resource but also a threat in terms of illegal fishing of paua and rock lobster alone. That probably costs the country in excess of $20 million a year. It is for that reason that new section 233, substituted by clause 6, deals with the highest band of offences. They have caused some difficulty and some convictions have been overturned recently, which has attracted considerable attention in the courts, and that is why this clause is so important. In terms of improving the robustness of those offences, clearly the message that the Government is serious about cracking down on, and being able to hold, convictions on commercial poaching and black market offending will go out into the community.

The original provision under section 233 made it an offence to knowingly contravene the Act for the purpose of obtaining a benefit under the Act. Unfortunately, the Court of Appeal has held that commercial gain was not a benefit—understandably—under that Act, and that finding has prevented some prosecutions from being successful. We look forward, with the passage of this bill, to that no longer being the case.

The CHAIRPERSON (Hon Clem Simich): On the question before the Committee, the debate is on clauses 5 to 13, and on schedules 1 and 2.

Part 2 is not so much a question of things not being fair, which Mr Ian Ewen-Street tried to suggest by way of analogy—of tenants renting a house and not knowing, until they had moved out, that they had been overcharged, and the landlord saying he would remedy that by lowering the rent for the incoming tenants. But I have a better analogy. Some members of AMP or Colonial Mutual Assurance sold their shares, and then a couple of weeks later the company demutualised and those people missed out. Was that fair? Absolutely not. But it is a reality, and people just accept it. It is life. It is all about hard knocks. We do not live in a perfect world but if we did, maybe there could have been some redress for those people who were unfortunate enough to sell their shares in those companies before they demutualised. The reality is that they did miss out. It is unfortunate, and I suspect that my analogy is probably slightly more relevant Mr Ian Ewen-Street’s analogy. But that is a matter of opinion.

This issue is all about the fishing industry moving forward. There have been some real messes and some real problems. We cannot help but reflect that two Government departments—not so much the industry—are basically responsible for this bill. They caused the mess. The Department of Conservation was meant to perform a duty. It did not do it. The ministry should have been benchmarking or showing that it had some performance, but there was a total lack of performance and a total lack of accountability by two Government departments. That is the real issue here, and that is why the ACT party is saying that industry and individuals are far better at running their industry than Governments, or bureaucracies, or councils, or whatever. The rights of the individual and the property right that is attached to that will ensure that fairness is ultimately spread right across the board. People understand the rules and reflect that in their day-to-day lives. But as long as we have these huge bureaucracies trying to dominate industries, we will always have the anomalies that come along from time to time.

That does not mean to say that we in the ACT party do not sympathise with those who have paid levies for years and got nothing back. Of course we have understanding and some sympathy, but it seems to me that the $24.1 million going back into the fishing industry is about addressing what I can fairly describe as a public good versus a private good. If we decided that we would individualise the $24 million and give it back to the others, it would start the whole accounting process all over again. It seems to me that the Seafood Industry Council has negotiated a reasonable deal, notwithstanding the fact that there are individual fishers who justifiably feel aggrieved. But, like everything else, as I said earlier, nothing in this life is ever totally fair and I believe that the select committee did the right thing.

I would like to contribute particularly to the debate around Mr Ian Ewen-Street’s persistence on a matter that has been explained to him by at least three or four members and officials working together—that is, that some fishers believe they should be beneficiaries of a cash refund. These are the people whom Ian Ewen-Street is looking to represent.

Opposition to this bill comes from those who believe that the distribution of the $24.1 million as a reduction of future levies is unfair to those who paid the cost-recovery levies in earlier years and who have since left the industry. Mr Ewen-Street’s basic argument is that they should be beneficiaries of a cash refund. However, he does not acknowledge three things.

Firstly, the settlement is consistent with the cost-recovery regime whereby under-recovery is to be debited and over-recovery is to be credited in a future period—that is, from a past period to a future period, and to the same general group of levy payers, not to the specific levy payer.

Secondly, the levies are collected from that sector of the industry in order to be spent on the same sector of the industry—not on individuals. The Ministry of Fisheries and the Department of Conservation do not collect the levies to fund them to go and clean the boats of individual fishers, to clean the nets or pull in the nets of individual fishers, or to concentrate on issues relating to individual fishers, but to that fishery as a whole. That is the point. The legislation takes a holistic view. It is concerned with the benefit that the services deliver to the industry, not to individual fishers themselves.

Thirdly, if a fisher has left the business and sold the quota, that fisher leaves behind the bills and leaves behind the income. It is like any business—if people sell their business it is gone unless they write in the contract that from then on they will still pay the bills and still draw the income. Those fishers have sold the business, in this case the quota, and have left behind the bills and the income. That is as simple an explanation as I can get, with the complex mind I have, in explaining this particular issue, and I am sure that members will accept it.

I have been quite intrigued as to Mr Ewen-Street’s argument about past levies being cumulative over several years or skipping back 2 or 3 years. I have some sympathy for his argument, because Ministry of Fisheries officials convinced us—it was a bit dodgy—that although we read in the Act that it went from a past year to a future year, that it was not cumulative for a number of years to a future year, and that one could not go back 3 years for a future year, it could be done. We were told that, even though it had never been done by a Minister, one could go back through cumulative years. I had planned to introduce an amendment on this part to make sure that in the future the Minister would be given the rope—I will pause there—to do that, but I notice now, and the Minister’s officials have kindly pointed out, that in fact the provision is already in there. I acknowledge and concede to them that it is in there.

New section 265(b) in clause 9 states: “the Minister has not previously had regard to under this section”. To what section? New section 265 states that “the Minister must, … have regard to the costs of any conservation services or fisheries services incurred by the Crown in a previous financial year that … the Minister has not previously had regard to under this section.” In other words, if he has had regard to the previous year, he can also have regard to other years. It might be 2 or 3 years back, or a cumulative sum of all of those. In summary, I think that Mr Ewen-Street is a bit off the mark.

I move, That the question be now put.

If we look at the reason we are in the Chamber today, it is that there has been a huge problem with the overcollection and overpayment of levies that were supposed to go towards either conservation services or to the provision of research services for the benefit of the industry.

This problem has been created over the last 10 years and, of course, when a very large sum of money has been overcollected we are faced with the problem of how to divide that money in a way that is fair to the industry and fair to as many people as possible within that industry. We are talking about handing out about $24.1 million. The aim is to work out a system that is fair, that has a certain amount of common sense, and that is economical to do.

I take issue with some of the comments made by the Green member that part of this process has been unfair because some of the levies—some of the credits—will be going to those people who might not have been in the industry at the time the initial levy overpayment was collected, and some of the money is not going back to those people who were in the industry at the time the levy was collected. Those people may have left the industry, they may have gone bust, they may have sold their businesses, or whatever—they are no longer there to collect their part of the levy.

Any system of repayment has to establish a certain amount of fairness, but one of the points made by Phil Heatley is that the select committee, the officials, and the industry itself have taken an industry-wide view about how the money is to be repaid. In terms of repayment, if I spend a bit of time on Mr Ewen-Street’s example, he said that it was a bit like a landlord overcollecting rent and then paying it back to an individual tenant—a tenant who might have left town, died, or whatever. I do not think that is a very fair example because that does not happen in reality.

A better example would be to look at the way councils collect rates. In some years they may overcollect rates and in other years they may undercollect rates, but the way they compensate and the way they make sure they are fair to all ratepayers is by either lowering or raising the rates of future ratepayers. They do not go back and try to track down every single ratepayer who might have paid rates in the period within which they overcollected the money.

It does not take a long time before one chews through $24.1 million worth of costs in trying to track down fishers who might have left the industry, who might have died and have estates, or who might have sold their businesses. In an ideal world, one would like to do that and return the levies to those who paid them, but in reality it is quite difficult—it is unachievable.

One of the things that strikes me as very interesting about this part was a comment made by David Carter, the chairman of the Primary Production Committee. He said that we are in the unusual situation of a party having a minority report on a bill, yet that party going on to support it. I do not think I have seen that before, and I cannot think of any other example where that has occurred.

💬 Hon David Carter: It’s history in the making.

Yes, I say to Mr Carter, it is history in the making. I do not think we have heard enough of an explanation about why we have that dichotomy of views within the report. It is good that the members of the industry have come together to try to find some kind of consensus about a way forward for the whole industry. It would be difficult to support this bill if the industry was not for it and felt that it had not played an important part in establishing the way that the levy debts should be repaid. We are talking about a very significant amount of money, so I am glad that the select committee took the time that it did in order to be able to review a very complex problem, and to come up with some solutions in this very complete bill.

I move, That the question be now put.

At this stage, nobody has spent much time on the schedules, so I thought I would take the opportunity to discuss the detail in them. If Mr Ewen-Street, the Green member, listens to the contribution I am about to make and takes the opportunity to look at the detail associated with the schedules, then he too will understand the point—which has been made by many, many speakers—that the credit of these levies is very much species-specific.

I start by asking the Minister in the chair, David Benson-Pope, to assure us that he is familiar with the calculation of the schedules. I am sure he has had a look at them and has noted the extreme detail that they go into. For example, the highest amount received by a species—for snapper in area one—

💬 Phil Heatley: To the nearest dollar.

Yes. Snapper in area one gets $1,717,023, yet another species, yellow-eyed mullet in area eight, gets $1. The Minister will see that the officials and, indeed, the members of the select committee have done an extreme amount of work to get to that amount of detail.

The first question I want to ask the Minister—which I forgot to ask at the select committee hearings—is: if I were to add up all the amounts listed in the schedules—some species get $2, some get $13, and some, as I said, get well over $1.7 million—do those figures total $24.1 million, or do they total $24,593,543? I ask that because the settlement is for $24.1 million. There was a negotiated settlement at the time for interest, because of the time it would take to pass the legislation. I am now confused as to whether the total amount in the schedules is for the negotiated settlement of $24.1 million, or whether those amounts total the global amount of the negotiated settlement of $24.1 million plus the additional amount for interest, due to the time taken. I look forward to the Minister making that contribution, because it will assist us in deciding whether to vote for this legislation.

Secondly, I want to ask whether the Minister has any advice as to what a fisher of yellow-eyed mullet in area eight should do with the $1 he or she will receive from this credit. Does the Minister in his generosity really expect that that $1 will make that much difference? I see the Minister is itching to take a call to answer those two questions. If he is prepared to do so, I think at that stage we could move the debate forward.

I move, That the question be now put.

Motion agreed to.

The question was put that the following amendment in the name of Ian Ewen-Street to clause 10(1) be agreed to:

to add to paragraph (b) of section 265A(1) the following new subparagraph:

(iii) In the case of fishers who have paid levies before 1 October 2003 but have since left the industry, that the pro-rated values of their underspent levies be refunded to them in cash on or before 30 June 2004.