7 December 2020

UPDATED: Greens MLA tables petition calling for end of public funding for horse racing

| Dominic Giannini
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Jo Clay

ACT Greens MLA Jo Clay has called for the end of public funds flowing through to Thoroughbred Park. Photo: Dominic Giannini.

Newly elected Greens MLA Jo Clay has tabled a petition which calls on the ACT Government to withdraw all public funding from Thoroughbred Park and labelled the horse racing industry “out of step with community expectations in the ACT”.

Funding currently sits at around $7.5 million for all racing codes in the ACT.

Ms Clay tabled the petition in the Legislative Assembly on Wednesday (2 December) which claimed that the horses live and die “at the behest of an industry with questionable ethics and subject to allegations of links with organised crime”.

“Despite protestations about jobs and ‘loving their animals’ the primary motivator is financial and personal success and glory for the trainers and owners – not the horses,” said the petition*, which was tabled with 674 signatures.

“The extreme mental and physical suffering these sentient beings experience ‘for fun’ is not acceptable to most Canberrans.

“Horses lead an unnatural and restricted life while racing, and at worst end up as ‘wastage’ in an industry that has no more use for them. They are stabled most of the day, unable to graze and suffer horrific injuries, occasionally visible, such as the seven horses that have died during the Melbourne Cup over the last seven years.”

The call has been dismissed by the ACT Government who will stand by its memorandum of understanding with the Canberra Racing Club and Canberra Harness Racing.

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Ahead of this year’s election, ACT Labor said it intended to renew the MoU when it expires on 30 June 2022 due to the “economic and social benefits that arise from a well-managed, sustainable and well-regulated horse racing industry”.

“An MoU provides certainty for the sector, and sets out the Government’s expectations regarding industry management in exchange for government support, especially the ongoing welfare of racing horses and the workplace rights of those employed in the sector.”

However, the move would not be unprecedented after the ACT Government banned greyhound racing in 2018.

The sector brings in nearly $55 million for the ACT economy. Ms Clay called for the funding to be redirected to support Canberra’s arts and entertainment industry.

She also used her first question time in the ACT Assembly to question the Government’s investment of the fossil fuel industry.

Chief Minister Andrew Barr said that only $36 million of the Territory’s $5 billion of investment is in listed companies with fossil fuel exposure.

Canberra Racing Club has been contacted for comment.

* The original article attributed the quote to Ms Clay instead of the petition.

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So fascinating the wealth of misinformation from all sides on here.

Some claiming the ACT horse racing industry is ‘profitable’. Likewise people trying to claim that the industry only get $2.5 million a year, but generates $75m a year in revenue for the ACT Government…..

Here are the actual facts
– Funding give or take is what $7.5 million a year. That’s clear in the budget papers.
– The $55 m is not a revenue line – it is a measure of economic activity. It is nothing but an economics calculation by overpaid consultants, with little likely resemblence to fact. There is no way there is a multiplier effect of $8 for every $1 spent by Government. The ICRC review a decade ago showed that to be a facade, and it hasn’t changed since.
– The ACT Government gets basically zero direct money from the ACT racing industry operations. It gets $1 million or so from the Tabcorp licence fee (profits driven by betting on other states racing), and then it gets $11 odd million from Point of Consumption taxation on wagering on racing and sports events – but this is across all racing and sports, not just the ACT events (which probably contribute <1% of that revenue).
– The industry is clearly not profitable in terms of the ACT racing industry. Otherwise why is it still crying poor despite the massive lump of cash thrown its way by taxpayers each year.

In short, the ACT industry could disappear tomorrow, it would make no difference to the ACT Government Budget other racing would replace it in the TAB schedule) and $7.5m would not be spent propping up an industry that will never reach the scale needed to stand on its own two feet.

And I have no view one way or the other to be honest on this. Do I think its a waste of money – absolutely. Do I think there are shedloads of other instances of wasted money by ACT Government – I sure do.

I don’t get why there is an ACT track and a QBN track however – if I was ruler for a day, I’d merge them, build a brand spanking new facility somewhere (don’t care if its ACT or NSW land), and bring them into the broader NSW racing scene, and then abolish all the facade around an ACT racing industry. ACT Government could make a contribution to Racing NSW each year towards costs of the club (at a level somewhat lower then what we spend now), Thoroughbred Park could be used for a better purpose (Great spot for a stadium for mine), and we’d all be better off.

You can’t exactly complain about one set of economic consultants and then claim that the ICRC definitively showed something, when their assessment was similarly based on assumptions by economists (and a very narrow assessment at that).

Along with this, the 15% point of consumption tax only started in 2019.

Fyrther to this, the assumption that there is no linkage between racing and wagering in the ACT or Australia more broadly is extraordinarily myopic. That type of thinking would suggest that the best “economic” outcome would be for no or extremely few race tracks in Australia and everyone will still wager the same on the limited meetings and overseas events.

It’s simple ignorance of how the industry operates as a whole, with the creation of numerous supporting industries that only exist becaise of the economies of scale available.

Also, since 2010, payments to the indistry havent increased, whilst revenue has. Even if you take the ICRCs break even assessment as gospel, the situation is clearly better now.

There are definitely opportunities for rationalisation in the industry but the idea that a race track in the capital city of Australia will never be viable is just silly.

Although at least you’re freely outlining that you want to grab the land that the racecourse is currently on. That’s clearly other people’s intents as well but they like hiding behind other arguments because the land grab doesn’t fly as well in the community.

“There are definitely opportunities for rationalisation in the industry but the idea that a race track in the capital city of Australia will never be viable is just silly.”

Page 25: https://thoroughbredpark.com.au/pdf/Annual-Report-2019-20.pdf
CRC has $12.5 million in revenue. $6.5 million of that is direct subsidy from the ACT Government. Tell me just how that is ‘viable’ if it isn’t continually propped up by Government? Remember, if you dig into the figures, the POC tax probably raises somewhere between $100,000 and $200,000 a year from betting on ACT racing. Being generous, lets add in the $1m Tabcorp licence fee. That’s still a subsidy of $5m +.

The sheer fact the only answer the industry has is to say ‘give me some more sir, please sir’ through its hand out for more tax revenue says it all. It absolutely is not viable in its current structure and never will be – its as simple as that.

“Further to this, the assumption that there is no linkage between racing and wagering in the ACT or Australia more broadly is extraordinarily myopic. That type of thinking would suggest that the best “economic” outcome would be for no or extremely few race tracks in Australia and everyone will still wager the same on the limited meetings and overseas events. “

Where did I suggest it applied Australia wide or that there was no linkage? I was very specific in saying I was referring to the ACT industry in saying that ACT Government revenues are now basically unhinged from local racing industry activity. In that case, it is the simple and absolute truth. The ACT racing industry could disappear overnight, and beyond direct employment impacts, there would be little impact on the wagering and racing industry at all – measured on a statistical basis, probably zero. Canberra Gallops would be replaced by another meeting from Gundagai, from Alice Springs, from Perth, wherever. Same with the harness – the simple fact is people in Australia will punt on anything, and ACT racing product has zero ‘value add’ in terms of being anything different for 99.95% of people that punt.

As for your point about fewer tracks – have you seen any vision of Sky Racing recently? More and more international product being show even during the day – a rationalised Australian model will be the outcome at some point, whether its sooner or later.

You implied it and so did the ICRC when they reviewed it 10 years ago.

“ACT industry in saying that ACT Government revenues are now basically unhinged from local racing industry activity. In that case, it is the simple and absolute truth. The ACT racing industry could disappear overnight, and beyond direct employment impacts, there would be little impact on the wagering and racing industry at all – measured on a statistical basis, probably zero. “

This is the exact point that I’m refuting. It ignores all context of the racing industry as a whole and how it operates, because the same argument can literally be made for any racecourse until there are no racecourses left and apparently the same amount will be wagered on US or UK racing products.

And the same argument could also apply to almost any semi viable cultural pursuit that government’s fund in this manner.

ie. why do we fund the local film industry, film goers will just replace their viewing with Hollywood films.

Why do we fund any professional sport, people can just watch the NBA and NFL.

Because the racing industry as a whole generates far more revenue than that subsidy in both taxation and economic activity for the ACT.

Once again you are trying to isolate the ACT component from the racing industry as a whole, which is exactly what I’m saying is unreasonable. The ACT industry does not exist in isolation and the idea that long term wagering revenues wouldn’t be affected by its removal is just wrong.

To ignore the context of how the industry actually operates and how people get involved in it in the first place (through direct experience) is just nonsensical.

What you could argue however is that their needs to be better national funding models such that the ACT and other jurisdictions receive the true value for the product they are providing but that is another matter entirely.

I’d also be interested to hear if you want to apply the same logic to other areas of government spending. At least the racing industry provides a significant taxation base to government, the same cannot be said for almost the entire arts industry and much of the sports and wider entertainment industries as well.

Do you want all funding in these areas to be removed despite the clear benefits they bring in both social benefits and wider economic activity?

I mean there won’t be a need for the stadium you want to build if we require the teams who play there to actually fund and build the thing with their own profits, correct?

Lets look at the hard figures. The Canberra Racing Club has turnover around $140 million per annum on its racing product. Total racing turnover in Australia is around $31 billion. That’s less than 0.5 per cent of total industry turnover.

It is a rounding error in the grand scheme of things, and as shown by the demise of the greyhounds (Noting something I did not support at all), its disappearance has made exactly zero difference to national industry outcomes.

It is a simple fact, I don’t understand why your trying to pretend it isn’t. I’m not advocating some grand plan to get rid of all – if Thoroughbred Park was Flemington or Randwick, then its a different story and your point might have some validity.. But its not – it is all but in name a country level club – just with much larger salaries for its executives. Despite the strongest growth in non-government funding in history over the past few years through race field product fields, the fact more than 50% of its funding is Government subsidy says it all. It’ll never, ever be stand alone viable.

On other areas industries and areas, I’m not unhappy for a similar approach. But I note the community benefit from many of these areas is massive compared to racing. Outside of the couple of piss up days a year, noone goes to the races, and its direct employment levels are far below those in other industries. It also has a substantial negative externality associated with it too in terms of harms from gambling.

The need for a national funding model has been clear for a decade – it’ll never happen though. That doesn’t mean ACT joining Racing NSW and QBN/CBR merging woudln’t be a far better outcome than current arrangements.

But what you’re saying isn’t a simple fact, it’s just ignoring the wider context and long term implications of what you’re proposing.

What you are actually proposing is that the ACT should leach off interstate/overseas racing products because it would make immediate economic sense.

What this ignores is that the same could and does apply across the country. Every other jurisdiction could also externalise the costs and increase their profits for a short time until there is no local product or industry.

But the ACT industry doesn’t exist in isolation. People only get involved and spend money because of their direct connection and cultural history with it. If you don’t maintain that, people will be off spending their money elsewhere. It’s the same reason why you couldn’t just replace Australian sport with overseas sports or computer generated sporting events and expect revenue to remain the same.

I would also disagree with your assertion that the community connection to racing is solely around a few “pissup” days. As you’ve said, it’s a $31B national industry and the local government receives millions in additional taxation because of the local community involvement in it.

Compared to the other entertainment and art industries, racing is far more economically viable.

And I’ve got nothing against merging the two local clubs but it would clearly be superior from a long term perspective to do so at the ACT racetrack site due to its location and the clear and obvious opportunities for growth due to that location.

I think it would be fine to drop the subsidy to horse racing as long as the government then also removed the myriad of extra taxes that are levied on the industry compared to others.

I’m sure all those people calling for an end to the “subsidies” would be happy for that to occur right?

And whilst the Greens suddenly want certain sectors to stand on their own two feet, I’m sire that they are just itching to apply the same logic to the arts as well right?

Pfft.

Thank you Greens! I don’t want my tax dollars to fund horse racing

Capital Retro6:33 am 07 Dec 20

Was that an election policy?

rationalobserver7:27 am 11 Dec 20

You mean like, transparency and full disclosure BEFORE the election, so people could be fully informed before they cast their vote?
We are talking about the greens here.

Oh there is that word again, community expectations in the ACT.
Greyhound racing was just the beginning but my issue is this.
The Greens want needles administered in the good old Hume Hilton, rehabilitation facility that’s not a jail or whatever you wish to call it. This has only been stopped from happening due to the guards taking issue with it and rightly so. So handing out needles to criminals is in line with community expectations according to the greens but horse racing isn’t.
Nice work ACT greens, such refreshing logic

I find it ironic that The Greens are against horses dying on the racetracks and the “links to organised crime”, but were saying accidents and tragedies happen when over 1000 asylum seekers had died at sea on boats.

The extreme mental and physical suffering these sentient beings experience ‘for fun’ is not acceptable to most Canberrans. 674 Canberra’s bothered to sign the petition. Hyperbole defined.

HiddenDragon7:21 pm 06 Dec 20

This outbreak of concern for equine well-being will presumably extend to a demand to stop the shooting of horses that cross into the ACT from Kosciuszko National Park and to overturn the deal which traded away the North Curtin horse paddocks (not too much space to agist horses in the apartments which will proliferate as a result of that deal).

Diversity of opinion and of diversity of activity is not supported by the Greens. If someone else enjoys something the finger wagging Greens disapprove or they will try to ban it.

To Johnathon Davis and the rest of the Labor Greens government.

You did not mention this during the election. You would’ve missed a lot of votes had you gone to the electorate with this proposal.

Why do the Greens always want to stop us from enjoying ourselves?

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