Clem Simich

21 Jun 2001
    Hon. CLEM SIMICH (NZ National—Tamaki): The Opposition will support the progress of this bill to the Government Administration Committee- It is important that as industry as important as the racing industry has the support of all parties in this House. Progressive legislation for the racing industry will certainly have the support of the Opposition, although there are a number of issues in this bill that we would 1ike to see changed, I am pleased that at the select committee, after very wide consultation by way of submissions to the committee, the Government may see where changes are needed.
    Contrary to what has been said, this bill was actually presented to the Government in 1998. No changes have been made to the bill that was presented, with the exception of a proposed change to the structure of the Racing Board. The bill was not acceptable to all the groups involved in the racing industry in 1998, for a whole raft of reasons, and the merger of the two statutory boards – The Racing Industry Board and the Totalisator Agency Board (TAB) - was in question. After all, it had been good common sense to set them up separately some years earlier, and they operated very effectively. The Racing Industry Board was the senior board, and the TAB was always required to report to the Racing Industry Board.
    There was dissention between those two camps; indeed there has been considerable division in the industry as a whole. It was never intended, under the earlier legislation that that be the case. The Racing Industry Board was the senior board and there was cross representation between the two boards. They should have been able to get on. They do get on today. Indeed the president of the Racing Industry Board is also the president or leader of the TAB, so they are operating as one.
The savings that have been talked about from creating just the one board are very, very small indeed. After all, the expenses of the Racing Industry Board are not great. The expenses of the TAB have to be great because it has been charged with maximising the return to the racing industry. It is the commercial arm of the industry, and decisions made by the TAB have been questioned by many racing groups throughout New Zealand. Many have felt that the TAB could have achieved the turnover that it has achieved — something over a billion dollars a year — at a much lesser cost than has been the case.
The racing industry does receive something like $200 million gross from the TAB, and that is roughly split. One third goes to the Government. The Government has always enjoyed a very large take from the racing industry, and that is why all Governments have been happy with the industry. The Government takes close to $70 million by way of duties and taxation. Expenses take about a third of the $300 million — again, close to the S70 million mark — and the TAB hands over to the Racing Industry Board about $67 million to $70 million for the advancement of the industry.
Racing is in trouble in New Zealand as it is in almost every country, but that is not the fault of the existing statutory boards. They have done their best. If they can be improved on, well and good. I hope this bill can lead to that, and I am pleased that the three racing codes agree with what is proposed in the bill. They did not agree 3 years ago. There seems to be more agreement now, but there is certainly not agreement right through the structure of racing in New Zealand, and there is not agreement amongst the smaller clubs. They would like to see a number of changes, which they hoped would be made before the bill was presented. But, as I said before, no changes were made to the original bill, other than those to the structure of the board.
A great number of the smaller clubs want to see greater protection for themselves. They want this bill to reinstate the provisions in the existing act that require the Racing Industry Board to initiate, develop, implement, or recommend policies that are conducive to the financial welfare and financial security of those New Zealanders engaged in the industry. That, they feel, would provide for more accountability.
They also want deleted from the provisions in the bill the requirement that the board pay the TAB revenues to the code governing bodies. There is great distrust amongst people involved in the industry of their own governing bodies, particularly amongst people in the thoroughbred side of the industry. Unless that distrust is remedied, they do not want to see that body, in particular, being bulk funded and funding the clubs on its own. They think it would be much fairer if the proposed Racing Board itself distributed funding to the clubs. As I said, that has happened because of widespread distrust of the governing body that runs the thoroughbred code. That is for those people to sort out. Many maintain that that body is not democratic, and, indeed, many of the ills of the smaller clubs filter down from mismanagement — ineffective management — of that body itself.
The clubs also want the clauses that create the new body to be changed slightly. They would like to have greater representation. After all, a board of seven people will be entrusted with a very large commercial enterprise, as well as providing all the policy and administrative requirements of the industry. They would like to see that number increased to 10 with wider representation across the industry itself.
One or two other, smaller issues that dissenting groups want can be thrashed out in the select committee, and I am sure that will come to pass.
The problem with racing in New Zealand is not addressed by this bill. It does simplify a number of issues, but it does not enable the industry to do a single thing that it cannot do under the present Act. However, because things are being simplified, it should be easier for the industry to work through them. The bill itself does not delve into the areas that could help racing — the areas of taxation, and the ability of the industry to use other gaming products. Those matters should be addressed in other legislation, and I am sure they will be.
In terms of taxation, the industry certainly wants to have a level playing field compared with other forms of gambling. It does not have that. I think GST on the racing gambling product must be addressed. That is an avenue Parliament should look at. It should give relief to the industry through that means.
In New Zealand roughly two-thirds of the turnover comes from the thoroughbred code, about 30 percent — or a bit under — comes from the harness-racing code, and the greyhounds provide about 10 percent. They are the growing side of the racing industry in New Zealand. In addition, the TAB covers Australian racing through the television channel here. That side of it amounts to a quarter of the total turnover. That has caused a loot of upset for smaller clubs in this country, but the benefit from covering Australian racing is about $17 million net to the industry. That is a big chunk of the industry's income, and it conies about because the TAB was bold enough to cover Australian racing, albeit, some feel, al the expense of smaller clubs in New Zealand.
The National Opposition will be supporting the progress of this bill to the select committee, because we want to work in the interests of that industry.