The NSW Greyhound Breeders Owners and Trainers Association (NSW GBOTA) has called for commercial fairness to apply to the distribution of funds arising from a taxation rate reduction that is to be provided to the NSW racing industry.
The State Government announced in July that it would reduce the taxation rate that applied to NSW TAB wagering revenue so as to bring about parity with the rate in place in Victoria. The taxation relief was to be staged in over a five year period and had the objective of providing sustainability to each of the three NSW racing codes.
Currently, the NSW Government applies a taxation rate of $3.22 for every $100 of TAB wagering revenue whilst the Victorian Government takes just $1.28. This has meant that the Victorian racing industry (three codes) has enjoyed a $100m per year funding advantage over the NSW racing industry with this funding advantage flowing to each of the Victorian codes based on commercial performance.
Legislation paving the way for the taxation reduction in NSW was introduced into Parliament this week, with the legislation addressing the apportionment percentages that are to apply to the distribution of the taxation fund to each of the codes. Despite an expectation that the taxation benefits would be apportioned back to the codes based on the percentage of wagering turnover that each was generating (greyhounds currently account for 22.3%*), the legislation is proposing that the thoroughbred code receive 77.3%, harness 12.7% and greyhounds 10%.
NSW GBOTA Executive Officer, Brenton Scott, described the apportioning proposed in the legislation as grossly unfair and deficient in any form of commercial principle.
“The taxation earnings that the Government is surrendering will have been performance generated by each of the codes based on wagering turnover.
“The greyhound code, on current performance, will have generated 22% of the funds that are to be returned to the industry… to suggest that the greyhound code should only receive 10% of the funds is simply ludicrous and amounts to the greyhound code subsidising the thoroughbreds by up to a further $12m per year, on and above the cross code subsidization already occurring via the Intercode Agreement.
“The whole intention of taxation relief was about providing each of the codes with a level playing field with Victoria.
“Why then could anybody support legislation that flies in the face of that objective and takes the earnings of one code (the poorest) and hands it to another (the richest)… it’s an unnecessary meddling in the free market principle,” said Scott.
Scott added that the discriminatory proposal also stood to undermine the reform and change that was being whole heartedly embraced by the NSW greyhound industry.
The greyhound industry is currently the subject of a Special Commission of Inquiry. Any payments arising from the taxation relief for the greyhound industry will be quarantined from use by the industry until the Commission’s completion and the industry’s future is finalised.
“We support this and we believe the Commission will ultimately contribute to our change journey.
“Our industry is totally committed to a future business model that is ethical and sustainable.
“We are putting in place a framework that ensures the highest possible standard of regulation and an operating culture that will see animal welfare at the core of every decision and action taken by the industry.
“This means investing in infrastructure to ensure that our greyhounds race in the safest possible environment and applying science and research to improve breeding outcomes so less greyhounds are bred and more of these race.
“And it means a commitment to every greyhound on a whole of life basis via the strongest possible commitment to robust and successful rehoming programmes.
“The industry and its stakeholder mix have embraced reform, we are committed to the costs involved and we understand that the community will judge our actions and endeavour.
“But our capacity to meet and exceed community expectations on a world’s best practice basis is enhanced by the taxation benefits being apportioned to the codes based on their commercial performance.
“A wagering turnover market share apportioning formula is the only methodology that provides fairness to each of the racing codes and is based on sound, commercial logic, reflective of consumer demand for the product produced by each code,” stated Scott.
*Source: 2015 GRNSW Annual Report
Executive Officer NSW GBOTA
Phone: (02) 8587 1208
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