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ACROSS THE DITCH The cost of overheads tapping the INDUSTRY G 'day Kiwi. How's it going over there? With all those fi rst placings over in London I suspect you'll be changing over to the gold standard pretty soon, eh? We're battling on a few scores over here, and not just in London. We're losing jobs left, right and centre. We're losing them to places with cheaper inputs: inputs from power, raw material and labour, just to mention the obvious ones. Regulatory concessions and government incentives, if not hidden, are usually not well publicised. And yes, some of those jobs and industries have ended up in Aotearoa, and good luck to you for being good enough to land them. I don't want to get political, but with so many Kiwis living in Oz you're sure to have heard that we have a minority government that, judging by the opinion polls, is on the nose with the voters. And now there are undenied rumours fl ying around cyberspace that the Prime Minister herself may not be as lilywhite as you would expect of someone in high offi ce. You wouldn't have to be Einstein to work out that all this has been a major distraction, and that government has been more about putting out the fi res the opposition keeps fanning, than good governance. You could of course shrug and say that's the Westminster system, if it wasn't for one salient point: this is probably the most dynamic and fl uid time the population of Planet Earth has faced for several generations. With the world economy glued together with printed paper, the global climate, whatever the cause, is reaching unsustainable environmental extremes, and seemingly uncontrollable growth in the world's population is stretching social harmony to the limit: you'd think it was time when we should be sitting in counsel, not only in our own house of talking, but on a global scale. That aside, we're getting a lot of cashed up people buying our food producing industries. It's not a new thing, but the rate has increased dramatically over the last few years. No second prizes for guessing who the most cashed up of the cashed up people are, but it's interesting that they're not buying into aquaculture. This got me to thinking: why not? When I had a look around I found we didn't have a lot of aquaculture to sell. Well, not of the scale of operation that would be any bigger than a family run operation in the Middle Kingdom. But I got to thinking that maybe there was something else ringing warning bells in the ears of would be investors. After all, it's not as if fi sh farming is a new thing in the Orient. Taking on a medium sized business and expanding it shouldn't be a problem for growers who produce half the world's farmed fi sh and seafood. Maybe there was something they saw that warned them off buying into Australian aquaculture. When I compared the fi sh farming operations of the two cultures – Eastern Asia and The Wide Brown Land, it wasn't diffi cult to come up with some stark differences. The most seemingly obvious one is labour costs. But when you look at it closely, there seems to be a lot more people wandering, and I choose the word wandering deliberately, around the farms I've been on in Asia. However, on-costs such as holiday pay, long service and sick leave, superannuation, accident insurance and other award issues, aren't nearly the fi nancial and 12 ■ NZ AQUACULTURE ■ SEPTEMBER/OCTOBER 2012 administrative burden they are in the developed world. Power costs are relative to what the going rate is in the region, and let's face it, fi sh farming uses a power of aeration, and both fi sh and shellfi sh farming use heaps in processing. These variables can include subsidies, the price of fuel delivered to the site and the sophistication of the generation plant. Now in Oz, our power costs are subject to a carbon tax, the impact of which is unclear, but worrying. The most worrying part is that we don't know just what impact it's going to have. The government has its carbon tax police on duty and no one's prepared to say what's going up and what's coming down. But that's really part of another story. The other disincentive I could come up with is environmental impact regulations. And here's the rub: the cost of establishment here in Oz is frightening on two scores: the time it takes to get permission to expand or set up a green fi eld site, and the out of pocket outlays associated with the long drawn out process of, public consultation and the need for approval from the various departments that are enacted to ensure compliance with the law of the land. Then there's ongoing cost of compliance – gathering data that you're pretty sure no one looks at. Then there's the ever present undercurrent of uncertainty should you either slip over the sometimes overly stringent parameters, or heaven forbid, you in some way challenge those who issue your license to farm in the fi rst place. A PRAWN FARM LICENSE WOULD COST BETWEEN $250,000 AND $500,000 I've been told that to get a prawn farm license up on the coral coast of Queensland would cost between $250,000 and $500,000. And that was a few years back. That's without building the farm. I'd say you could get a lot done in Eastern and South East Asia for that sort of money. I could be wrong of course. It could just be that the investors are aware of the risk involved and that they're really only buying a right to farm a plot of water, whereas buying a terrestrial farm gives them freehold value for eternity – or the end of the world, whichever comes sooner, eh? But if I were looking at investing in Australian aquaculture they'd be things I'd take into account. I'd also factor in that these strict OH&S standards could be got around by using imported labour that wouldn't be drawing any non- compliance issues to the attention of the union rep. And that the high environmental standards could be used as a selling point for the produce when selling it to the cashed up and health conscious Asian middle classes. Putting that aside, maybe there's a message there, that here in Oz we're never going to be global players in fi sh and seafood production. How about over in Kiwi, anyone buying up the farm? And if so, how do you feel about it?