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Fish farming: a new project’s approval illustrates regulatory weaknesses

By Alan Moran - posted Thursday, 18 May 2017


Earlier this week the Commonwealth government gave environmental approval to Project Sea Dragon,  a $2 billion scheme involving prawn farming in the North.  According to reports it will increase the national prawn catch by 55 per cent and employ 1400 people in activities that deliver real worth involving willing customers.  Revenues of over $1.25 billion a year are expected.

This involves a welcome change from the negative value-adding that has been par for the course with subsidised wind farms, Snowy wasting energy on pumping water uphill, a madcap scheme to build a Brisbane to Melbourne rail line.

Fishing has been one of many major disappointments as an Australian commercial activity.  The Australian Environment Foundation has pointed out how Australia is a massive underperformer – we have just about the biggest coastline in the world yet we are a net importer of fish.

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The fishing industry’s global wild catch appears to have approached its limits but farmed fishing is increasing rapidly.

Australia has not participated in this growth, as is evident from the following

In fact, Japan’s aquaculture production is 15 times larger than Australia’s and the EU’s is over 40 times larger.

While the approval of the Sea Dragon Project is welcome, the process it went through underlines the barriers that Australian governments place in the way of entrepreneurial activities.  As a result of these impediments there were no new land based aquaculture licences issued in Australia in the 10 years to 2012 and very few since then.

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The Dragon Sea Project has been under contemplation for seven years.  It proceeded to seek “Pre-Feasibility Approval” from its sponsors which it completed in June 2012.

It started the formal Environmental approval process in December 2013 and was accorded Major Project status which is supposed to expedite approval. Yet, it has just now finally received it, four and a half years later.  The process involved liaison with 22 Commonwealth, State and Territory agencies and the approval involved strict controls to protect “including migratory birds, sawfish, the flatback turtle and river sharks”.  All these dead weight bureaucratic costs are in addition to the directly required costs of the firm in hiring lawyers, environmental consultants and lobbyists.

The Environment Minister, Josh Frydenberg, was previously Minister for Deregulation, a role that seems to have atrophied since the Turnbull regime.  Perhaps, in view of his previous zeal in cutting Red Tape, Minister Frydenberg’s elevation to the Environment portfolio expedited the approval but the time involved is a sad indictment of the income-suppressing nature of Australian regulatory processes.

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This article was first published on Catallaxy.



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Alan Moran is the principle of Regulatory Economics.

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