The decision of the recent meeting of Executive Council attended by MLA Elsby, Bragger and Edwards, to increase quota access fees paid by local fishing companies by 50% will increase costs to the industry by £4 Million per annum. The hike is targeted at the Loligo and toothfish quota holders.
Industry are astounded and extremely concerned at this decision which will have implications throughout the sector and in the wider economic climate.
The decision is not supported by any objective analysis and amounts to no more than Government seeing increased strength in the target companies balance sheets in the past three years and deciding to increase the fee burden on them.
Falklands Fishing companies pay some of the highest fees in the world. Independently prepared forecasts show that with taxation the Government proportion of sector profit will be well over forty percent, without this additional fee.
For much of the past ten years returns have been insufficient to support vessel renewal, but as soon as performance improved the companies involved began programs of vessel replacement, a typical investment in a vessel is approximately twenty million Euros.
This decision will reduce the level of future returns and undermine investor confidence and will make raising capital all the more difficult for companies in the sector. It damages the Falkland Islands’ reputation for fiscal stability which has been an important factor for the business community and cuts across the Island Plan provisions.
The implications of this change in Government’s fiscal approach, the realization that Government feel free to raid the reserves and undermine the future of successful enterprises, particularly at a time of Global and Brexit uncertainty, will be noted by all in business in the Falkland Islands to the detriment of our economy overall.