Back to All News

Great Barrier Reef Marine Park Structural Adjustment Package

Estimates & Committees
Rachel Siewert 21 Feb 2011

Environment and Communications Committee - Monday 21 February 2011

CHAIR—I now call officers from the department in relation to program 1.1, Sustainable Management of Natural Resources.

Senator SIEWERT—I would like to ask about the Great Barrier Reef Marine Park Structural Adjustment Package and the report that was fairly recently released. How much was spent in total under the structural adjustment process?

Mr Oxley—The total amount spent under the package was $215 million.

Senator SIEWERT—What was the gross value of production of the displaced effort as a result of the new zoning plan?

Mr Oxley—There was approximately $14 million worth of production—annual catch value based on beach prices—displaced as a result of the rezoning of the Great Barrier Reef Marine Park. Under the licence buyout program, which we ran to remove an equivalent amount of catch and effort quota entitlements from the GBR Marine Park, we purchased about $17 million worth of catch value.

Senator SIEWERT—I will put some questions on notice because I have quite a few questions on your annual report. I particularly want to ask you, firstly, why you think the cost overruns were so substantial in the project? Secondly, the report describes the special circumstances of pleading and gaming by applicants. Can you comment on that? How did you deal with it?

Mr Oxley—I will address the first question first on the substantial cost overruns. Firstly, the package was changed on a number of occasions over the life of it. Each time essentially the criteria for the package, even the scope of elements of the package, were changed by the government of the day in response to commentary or lobbying—call it what you like—by those sectors which were affected by the rezoning of the Great Barrier Reef Marine Park to the effect that the extent of the assistance was not sufficient to match the extent of the impact. In those circumstances the government of the day made a choice on a number of occasions to adjust the parameters for the package.

Senator SIEWERT—So they were the key reasons for it?

Mr Oxley—They were the key reasons for it. In relation to the observation you raised about gaming of the package, the essential observation I make is that, because the package ran over a very long period of time, as a number of key financial advisers in the space of providing advice to impacted businesses got to understand the individual case histories of their body of clients and their experiences in applying for adjustment assistance they became better at understanding the decision-making framework of the department in terms of how a successful claim would be assessed and then a payment made. They were able to draw on that body of knowledge they had gathered over time to refine and improve the quality of the applications that were made.

Senator SIEWERT—That sounds a bit different to the circumstances that were described in your report about how applicants participated in the process. You say ‘refined applications’. Was that that they knew what to ask for?

Mr Oxley—Yes, it is in terms of what they knew to ask for. The starting frame of reference for applicants under the GBR structural adjustment package was that they needed to be able to demonstrate an impact caused by the rezoning of the GBR Marine Park. In addition to being able to demonstrate that there had been an impact they needed to disaggregate that impact from a range of other factors which were occurring at the time. There were some major adjustments in the coral trout fishery which affected a number of species. There were effects on the economics of fishing caused by a significant escalation of diesel prices at the time, which impacted on the profitability of fishing operations.

The department found very quickly that the applications coming forward were not able to demonstrate that the impacts they were experiencing were attributable in their entirety to the rezoning of the marine park, so the department invested quite some significant effort in building a series of tools that helped individual businesses to quantify the impacts that were associated with them. We moved more towards a formulaic based approach of identifying what the impacts were for individual businesses. If an individual business were to accept the department’s proposal as to what that impact was then we went on and provided adjustment assistance to respond to that level of impact. So over time, because of the experience that the financial advisers had and the improved quality of data and tools made available by the department to assist applicants in getting access to assistance, the financial advisers in particular with deep experience in the program were able to achieve the best possible outcome for their clients.

CHAIR—Senator Siewert, I am not sure how many more questions you have got or whether you going to ask Mr Oxley any more questions, but if you ask Mr Oxley more questions and the answers are that length we are going to have a real problem.

Senator SIEWERT—Okay. I put the rest of my questions on that particular item on notice—

Back to All News