Flow through TAC adjustments—significant changes in TAC
34E Flow through TAC adjustments—significant changes in TAC
If there is a significant change in TAC in a fishing period, an adjustment (referred to in this Part as a flow through TAC adjustment), calculated as provided by this clause, is required to be made to the CPI adjusted price in each subsequent fishing period until no further adjustment is required under this clause as a consequence of that significant change in TAC.
For the purposes of this clause, a significant change in TAC is a percentage change in TAC of 20% or more (whether that change reflects an increase or decrease in TAC).
If the significant change in TAC was a decrease of 20% or more, the adjustment required is a decrease to the CPI adjusted price in each subsequent fishing period of half the dollar amount (before rounding) of the relevant adjustment in the previous fishing period, until the amount of the decrease (after rounding) first reaches $1. No further adjustment is required as a consequence of the significant change in TAC after the amount of the decrease first reaches $1.
Note—
For example, if the percentage change in TAC in a fishing period (fishing period 1) is a decrease of 40%, the CPI adjusted price must be decreased by $4 in the year in which the decrease occurs as a result of the immediate TAC adjustment. Under this subclause, the CPI adjusted price would also be decreased in the next fishing period (fishing period 2) by $2 (half of the relevant adjustment in the previous fishing period), and by $1 in the fishing period after that (fishing period 3). A flow through TAC adjustment would not be required in fishing period 4.
If the significant change in TAC was an increase of 20% or more, the adjustment required is an increase to the CPI adjusted price in each subsequent fishing period of half the dollar amount (before rounding) of the relevant adjustment in the previous fishing period, until the amount of the increase (after rounding) first reaches $1. No further adjustment is required as a consequence of the significant change in TAC after the amount of the increase first reaches $1.
Note—
For example, if the percentage change in TAC in a fishing period (fishing period 1) is an increase of 30%, the CPI adjusted price must be increased by $3 as a result of the immediate TAC adjustment. Under this subclause, the CPI adjusted price in the next fishing period (fishing period 2) would also be increased by $1.50 (rounded up to $2) and by 75 cents (rounded up to $1) in the fishing period after that (fishing period 3). A flow through TAC adjustment would not be required in fishing period 4.
For the purpose of calculating the amount of a flow through TAC adjustment required under this clause, the relevant adjustment in the previous fishing period is the immediate TAC adjustment or flow through TAC adjustment made to the CPI adjusted price in the previous fishing period, unless subclause (6) applies.
If clause 34F (Aggregate TAC adjustments) applied to the adjustment of the CPI adjusted price in the previous fishing period, the relevant adjustment in the previous fishing period is the adjustment that would have been made to the CPI adjusted price in that previous fishing period if the only adjustment made to the CPI adjusted price in that previous fishing period had been the immediate TAC adjustment, or flow through TAC adjustment, required as a consequence of the significant change in TAC for which the flow through TAC adjustment is being calculated in the current fishing period.
Note—
The purpose of subclause (6) is to prevent aggregate TAC adjustments made under clause 34F from having a snowballing effect on flow through TAC adjustments. For example, say the TAC in fishing period 1 is 100, the TAC in fishing period 2 is 140, the TAC in fishing period 3 is 154 and the TAC in fishing period 4 is also 154. In fishing period 2 an immediate TAC adjustment to the CPI adjusted price is required, being an increase of $4 (this reflects the increase in TAC from 100 to 140).
In fishing period 3 a flow through TAC adjustment is required as a consequence of the significant change in TAC in fishing period 2, being an increase to the CPI adjusted price of $2 (that is, half the adjustment made to the CPI adjusted price in fishing period 2). However, in this case, an immediate TAC adjustment is also required to reflect the increase in TAC in fishing period 3 from 140 to 154. Accordingly, clause 34F applies and the total adjustment to the CPI adjusted price in fishing period 3 is the aggregate of the 2 increases, being an increase of $3.
In fishing period 4, the flow through TAC adjustment is calculated on the basis of half the adjustment that would have been made to the CPI adjusted price in fishing period 3 if only a flow through TAC adjustment had been made in that fishing period. Accordingly, the flow through TAC adjustment in fishing period 4 is an increase of $1 (half of the flow through TAC adjustment that would have been made in fishing period 3), not an increase of half the total adjustment made to the CPI adjusted price in fishing period 3.
The adjusted beach price for a fishing period in which a flow through TAC adjustment is required is the CPI adjusted price as adjusted under this clause, unless—
an immediate TAC adjustment is also required to be made to the CPI adjusted price for the same fishing period, or
more than one flow through TAC adjustment is required to be made to the CPI adjusted price for the same fishing period.
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