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Shirley - ACT for a stronger racing industry

ACT for a stronger racing industry

Ken Shirley Thursday, 16 June 2005 Speeches - Rural

Speech to the Waikato Thoroughbred Breeders Association’s Election 2005 Seminar; Waikato Racing Club; Te Rapa, Hamilton; Thursday, 16 June 2005.

ACT recognises the significance and importance of the New Zealand bloodstock and racing industry.

I don’t need to convince this audience of the outstanding contribution that racing makes to the New Zealand economy in terms of the national GDP, employment and exports - suffice to observe the industry supports some 18,300 full time jobs with over 3,000 race horses exported annually for racing or breeding valued at over $130 million.

We must also recognise that horse racing is an inherent part of our Kiwi culture. As recently as 1995, 70 galloping and 50 harness racing clubs throughout New Zealand collectively had some 50,000 members.

Most importantly there are hundreds of thousands of Kiwis supporting the industry with a portion of their disposable income - the punters.

The last 10 years have brought dramatic changes and challenges to the industry:

 Off-course race betting turn over maintained steady growth throughout the 1990s but appears to have reached a plateau at around $1 billion per annum.

 Off-course turnover on New Zealand racing has declined by more than 12% since 1997. This decline has been offset by rapid growth in turnover on overseas racing, which now accounts for more than a quarter of off-course total turnover.

 On-course race meeting betting has declined significantly maintaining a downward trend from a peak of $210 million in 1988.

 Sports betting turnover has grown rapidly since its introduction in 1996 - it exceeded $100 million in 2001/02 surpassing on-course race betting turnover for the first time.

Competition for the gambling dollar has never been greater!

The traditional role of Government has been the provider of a regulatory and governance framework through the Racing Act 1971 which established the Racing Industry Board, the TAB and the Judicial Control Authority.

Parallel to that we had the Gaming Duties Act, which imposed specific duties on all major gaming operations.

The Government’s greatest impact on your industry is of course as tax gatherer. Big spending, voracious governments will inevitably see your industry as a soft touch.

In 2001/02 Labour sponsored an economic development strategy for the racing and bloodstock industries with the intention of establishing a partnership with government. This should have sent alarm bells ringing. After all one of the three great lies is “I’m from the Government; I’m here to help you”.

ACT since its inception has campaigned against big, intrusive government and the overbearing taxation regimes that sustain them.

ACT also consistently rails against heavy-handed state regulation and the ever-escalating compliance costs that are engendered.

Heavy-handed regulatory regimes always become self-perpetuating with each step of regulation begetting further regulation.

I stress it is not only the regulations that directly impact on your industry that you should be concerned about but also the myriad of indirect regulatory constraints.

The excesses of the Resource Management Act threaten your property rights and impose unimaginable costs and delays.

The employment laws in New Zealand are draconian and excessively rigid. ACT strongly favours more flexibility and the fundamental right for employer and employee to contract.

I could go on about some of the inappropriate aspects of our Occupational, Safety and Health regulations which impose costs and all the other legislations which so often fail to achieve their stated intention but nevertheless impose massive costs.

ACT recognises that the taxation regime is one of the greatest impositions on your industry. Our position on taxation is very simple. We favour across-the-board tax cuts and we will deliver them now.

ACT proposes a top tax rate for both personal and company of 25 cents in the dollar with all income up to the first $38,000 being taxed at 15 cents.

ACT’s policy ensures that all hardworking New Zealanders receive more of their earnings. Individuals and families will make far better decisions on how to spend their money than bureaucrats and politicians in Wellington.

Labour wants to put all middle-income earners on welfare through their Working for Families policy. Under Labour, hardworking families give up too much of their earnings in taxation. The Government then churns this money through bloated bureaucrats and ends up bribing people with their own money.

Treasury have calculated that ACT’s economic policy would bring 1% growth to the economy. Not only would we all be more prosperous, we would also have more choice and enjoy greater freedoms.

When it comes to the specific details of the taxation regime imposed on your industry, ACT does not share the view of Racing Minister Damien O’Connor who recently told you that you enjoy a position of privilege and advantage.

I believe Mr O’Connor’s remarks were more a reflection of the Labour Party’s ideology rather than a reflection of reality.

When comparing racing with other betting forms the level of expenses incurred cannot be ignored. When we compare the tax as a percentage of net profits then the racing tax burden is the highest of any of the alternate betting forms.

The simple fact is that the absence of overhead costs makes certain forms of gaming more profitable e.g., gaming machines and Lotto.

I note that the National Party have announced this week that intervention to bring gaming duties paid by the racing industry into line with those paid by casinos.

At first blush this might seem attractive to many members of your industry, but ACT has a far better answer.

We support the analysis of the 2001 Tax Review - The McLeod Report. Dr Cullen commissioned this report and it is reported that when Rob McLeod presented it to him, he flung it across the room screaming that he had just spent $2 million to get the ACT tax policy.

The McLeod Report concluded that the present levels of taxation on gaming appear indefensible.

Rob McLeod went on to say:

“In our view the current excise and duty regime cannot readily be justified on conventional tax policy grounds.”

ACT does not support either Labour or National’s predilection for sin taxes.

ACT led the charge against the Fart Tax. We understand that Labour are currently working on a fat fax to be introduced if they are re-elected. If you eat chocolate or hamburgers you get taxed.

ACT accepts the finding of the McLeod Report because its totally removes the anomalies and unfairness associated with gaming and racing taxation.

The removal of gaming taxes, coupled with ACT’s low flatter tax on income, offers far more than any other party in strengthening the racing industry.

Not only would your industry be strengthened but also all New Zealanders would be more prosperous, enjoying greater freedom.

ACT isn’t greedy, we are only asking for one of your two votes. Give your Party Vote to ACT for real change.

We walk the talk.

ENDS

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