The Great Lobster Grab

the-great-lobster-grab

Western Australian farmers should take the time to read two brilliant opinion pieces by Jane Marwick The Great Lobster Grab and Paul Murray The Sods Must Be Cray-z! published online in WAToday. Both articles comment on a radical government policy to nationalise, redistribute or double rents on three of the states iconic fisheries.

The first to be hit was the aquarium fishery which saw the Minister for Fisheries double the existing quota and hand out six additional licenses to new players with no experience in the industry for no clear reason. Next was rock lobster which saw the government issue itself a 17% share in a fully allocated fishery on the justification it needed to do this because lobster prices were too high. And finally pearling has seen its lease fees nearly doubled because the industry after 20 years of losses where 20 of the 23 players left the industry finally turned the corner and was making a small profit, which of course the government now wants a share in.

Behind all these decisions is another driver hidden in comments from the Minister for Fisheries Dave Kelly who is quoted as saying “these guys are significant business people here in Western Australia, they are multi-million-dollar businesses in their own right”. It seems we have an old school labor party socialist Minister at work, who, out of pure envy wants to cut down to size successful family businesses, which, over generations of hard work riding the business highs and lows have made some money.

These three decisions in quick succession should send warning signals to farmers, pastoralists and fishermen across the state that they are all on notice as this government wants a share of any successful family business. In fact the pastoralists should be very worried as they are fronting up for their five year lease fee negotiations this year and have already been told to sign a confidentiality agreement. This is code for the government wanting to muzzle the Pastoralists and Grazers Association as they go through the negotiation process before hitting them up with what is purported to be up to a 50% price hike in lease rates.

In fact, it will be interesting to see if the government does decide to follow up the part nationalisation of the lobster industry by threatening to resume pastoral leases from owners that have destocked to give the land a break or are not running at full stocking capacity. The rock lobster example shows it is not in the interests of any lease holder to not push the resource to the limit, now that the government has decided it is more interested in maximizing short term economic returns at the expense of long term environmentally sustainable resource management. The word on the boats and utes across the state is – use it or lose it. The signal to every one of the 43 fisheries and 504 pastoral stations is to go hard and fish and stock to the maximum limit or risk the government taking a slice of your asset and selling it off.

When this Minister was making his decision to extract an additional $3 million additional lobsters from state waters he obviously failed to delve into his departmental briefing notes to better understand what he is messing with. If he had, he would have had to pause for thought as the papers would have detailed how it was the last Labor government back between 2001 – 2008 that let the lobster fishery race away and almost crash due to the government allowing overfishing. By the time the Liberals came to power in 2008, juvenile lobster numbers were at record lows and the incoming Minister Norman Moore had to make the hard decision to halve the average catch from around 11,000 tonnes a year, to 5,500 tonnes for three years to allow the stocks to rebuild back to sustainable levels.

Ever since then the fishers have preferred to catch on the conservative side at between 5,500 and 6,300 tonnes rather than crank it back up to full roar and catch at the very edge of sustainable levels. By keeping healthy stock numbers in the water it has been good for the fishery, good for prices, good for the environment and good for the recreational sector. The only thing the Minister’s increased lobster quota is likely to be good for is the Chinese buyers of our crays as well as our pots as they move to snap up licenses as confidence collapses across the industry.

But all this has been lost on this state government. It’s as if they have been transported back to the 1960s with the government seeking to control all aspects of primary industry through taking control of production and attempting to set prices. Bizarrely in this case, the purpose is to drive prices down rather than up and maximise production by flogging the states natural resources to the limit. By handing out new fishing licenses they are simply cranking up the catch rate with no regard to the environmental impact of increased carbon emissions of marine engine hours or the impact of the loss of crayfish and coral from the ecosystem. Let alone the impact on the recreational catch as we remove a chunk of the fish food chain, no doubt the rec fishers will have something to say about this.

But it’s not just the fishermen and pastoralists that should be worried, this government has also signaled that it is after the state’s horticulture and viticulture sectors. The Minister for Water appears to be eager to progress the introduction of new water license fees which will hit our fruit, vegetable and wine producers adding costs which will have to be passed on to consumers and in some cases force some farmers out of business. How any of these cost or changes to license conditions fits with growing regional employment is something only someone who has never run a business could support.

Even the claims that the government can make lobster more affordable by increasing the catch seems to ignore the market powers that Coles and Woolworths and other retailers have to set prices, just ask the dairy sector how much power the retailers have. The end result will simply be fishermen like dairy farmers receiving lower prices allowing the retailers to clean up and some fishermen particularly young ones with big debts going to the wall.

One has to also ask the government if rock lobster is too expensive, then what about dhufish and prawns or steak and lamb, is it the job of state government to ensure everyone can afford to dine out on prime cuts of surf and turf? Is the new political slogan going to be lobster and lamb for all?

How quickly things have changed. Just two years ago the Barnett government responded to calls by the McGowan led opposition to abolish the last of the statutory marketing bodies The Potato Marketing Board because governments should not be interfering in the market. What’s next? A modern version of the lamb marketing board to force down the price of lamb for domestic consumers?

The market is the market and the Minster for Fisheries should leave his dismay of high lobster prices at the doorstep of Parliament house and instead celebrate his Department’s oversight of one or the world’s best managed fisheries. The government should collectively celebrate our successful agricultural sector and seek to ensure farmers, pastoralists and fishers continue to invest without the threat of new taxes and charges or changes to long established property rights. In our world property rights are everything, banks and investors are very wary of any state that wants to grab a share of profitable investments built up over generations. Just have a look at what has happened to lobster pot prices which dropped immediately the government gave itself a share of the fishery. The same could happen to station and farm prices if the government wants to mix envy with policy; any wrong move will simply open the door for foreign investors to buy our farms, vineyards, stations and fishery licenses at discounted prices.

Finally, the government should remember that they already have the best of both worlds, they get to share in the good times through increased tax receipts without the losses that come with the bad times. All Western Australian farmers and pastoralists should be watching the government’s lobster, pearling and water cash grab with great concern the only hope is the Premier steps in or the opposition uses their numbers to block the changes in the Upper House.

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