"Pay More, Fish Less: The DPI Business Model Explained"

For over 50 years, commercial fishers in New South Wales (NSW) have witnessed a dramatic contraction of their industry. In the 1990s, over 4,000 commercial fishers operated across the state; today, that number has dwindled to approximately 700. Despite this significant reduction in active fishers, the cost of fisheries management has escalated. The NSW Department of Primary Industries (DPI) is now considering a full cost recovery model, potentially transferring the entire financial burden of management onto the remaining commercial fishers.

This situation prompts a critical examination: How is DPI allocating its funds, and is the current level of management truly warranted?

A Look Back: The Simplicity of the Past

Half a century ago, entering the commercial fishing industry in NSW was a straightforward process. Aspiring fishers could visit their local fisheries office, pay a nominal fee of around $2, and obtain a commercial fishing licence. The regulatory environment was minimal, focusing on sustainability while supporting small businesses.

Today, the industry is entangled in layers of bureaucracy, inflated fees, and complex regulations. Fishers face a costly and time-consuming licensing process, with expenses often reaching tens of thousands of dollars merely to maintain operational status.

Fishing as an Investment, Not a Profession

The nature of commercial fishing businesses has shifted from hands-on, family-run operations to investment-centric ventures. The focus has transitioned from active fishing to ownership and trading of access rights, creating financial barriers for new entrants.

For instance, acquiring a modest fishing business in NSW might require an investment of approximately $30,000. However, this is just the initial outlay:

• Hawkesbury River prawn trawl shares can demand an additional $60,000 or more.

• Procuring a well-maintained, operational trawler entails further substantial investment, potentially amounting to hundreds of thousands of dollars.

These prohibitive costs deter young or prospective fishers from entering the industry. The system now favours investors and entities with significant capital, while DPI's management expenses continue to rise.

The paradox is evident:

• Fewer fishers should logically lead to reduced management costs, given the decreased need for monitoring and compliance efforts.

• Contrarily, management fees have escalated, and DPI's budget has expanded.

This discrepancy raises the question: Where is DPI directing its financial resources?

The Cost of Bureaucracy: Where Does DPI’s Money Go?

Despite managing fewer fishers, DPI Fisheries has significantly expanded its regulatory framework. With additional rules and compliance requirements come higher administrative costs, more staff, and increased complexity—all of which must be paid for. But is this level of management really necessary?

1. Bloated Administrative Costs

DPI has created an intricate web of management systems that require dozens of staff to oversee licensing, quota allocations, monitoring, and compliance. Each additional layer of regulation requires new personnel, committees, and reporting structures. More bureaucracy means higher costs, and those costs are passed on to fishers.

2. Questionable Grant Expenditures

DPI receives funding from various sources, including the Fisheries Research and Development Corporation (FRDC) and other non-governmental organisations (NGOs). These grants often go towards research projects, policy development, and experimental programs. While some of this research is valuable, a significant portion is spent on projects that do little to support the financial viability of commercial fishers.

• Is DPI using these grants to justify unnecessary projects that inflate their budget?

• Are these research initiatives genuinely benefiting the industry, or just keeping bureaucrats employed?

3. Overcomplicated Regulations: Fixing What Wasn’t Broken

Over time, DPI has introduced complex quota systems, gear restrictions, area closures, and new reporting requirements. Many of these changes have made it harder—not easier—for fishers to operate sustainably.

• Licensing costs have risen astronomically.

• Quota systems have made it difficult for new entrants to join the industry.

• Compliance costs (including vessel monitoring, logbook reporting, and electronic tracking) have created an excessive financial burden.

Each new regulation requires DPI to spend more money on enforcement, surveillance, and administrative oversight—again, all paid for by the commercial fishers themselves.

What Risks is DPI Really Managing?

DPI often justifies its high fees and increasing regulation by citing the need to protect fish stocks and ensure sustainability. But does the evidence support this?

• Many NSW fish stocks are already sustainably managed, yet fishers continue to face more restrictions and higher costs.

• DPI has closed significant fishing areas, further limiting commercial access while allowing increased recreational fishing effort—without the same level of scrutiny or fees.

• If sustainability is the primary goal, why is the financial burden being placed almost entirely on commercial fishers, while recreational fishers continue to have minimal costs and regulation?

The reality is that DPI has overcomplicated the industry, creating risks that didn’t exist before. By introducing unnecessary red tape and inflating management costs, they have pushed out thousands of small-scale operators, reducing competition and consolidating fishing rights into fewer hands.

Case in Point: Mulloway Stock Assessment

A clear example of DPI's flawed approach to risk management can be seen in its 2021-22 Mulloway Stock Status Summary (DPI Report). The report claims that Mulloway stocks have significantly declined, yet the assessment methods used to support this conclusion are fundamentally flawed.

• The report fails to acknowledge a key factor: there were far more commercial fishers targeting Mulloway in the 1970s than there are today.

• For example, in the Hawkesbury River—a prime Mulloway fishery—only around three commercial fishers actively target Mulloway today.

• A decline in recorded catches does not necessarily indicate a reduction in stock abundance; rather, it reflects a decline in commercial effort due to fewer fishers and tighter regulations.

Additionally, DPI has significantly increased the legal size limit for Mulloway over the years.

• In the 1970s, the legal size limit was substantially lower than the current 70 cm requirement.

• This means that fish which were legally caught and recorded in past decades are now excluded from catch data, further distorting stock assessments.

Rather than acknowledging these fundamental changes in effort and regulation, DPI continues to rely on questionable stock assessment methods to justify increased restrictions and higher management costs—costs that will only grow under a full cost recovery model.

The Danger of Full Cost Recovery

If DPI moves towards full cost recovery, the impact on commercial fishers will be devastating:

• Higher licensing fees will force more small operators out of business.

• Increased compliance costs will make it nearly impossible for new fishers to enter the industry.

• More power will be concentrated in the hands of large corporate fishing entities, reducing diversity and competition.

At its core, full cost recovery is a strategy to offload DPI’s bloated expenses onto a dwindling number of fishers, rather than addressing inefficiencies within the department itself.

Fewer fishers should equal lower management costs—not higher fees.

Conclusion: A System That Needs Reform, Not More Fees

Before DPI demands full cost recovery, it must first justify its own expenses and prove that its management efforts are efficient, necessary, and fair. Otherwise, full cost recovery will be nothing more than a final blow to an industry that has already been pushed to the brink.