Govt's support a cornerstone for NZ racing industry success
Government’s support a cornerstone for New Zealand racing industry’s success
Winston Peters, Deputy Prime Minister and Minister of Racing, recently confirmed his support for the thoroughbred industry with the announcement that the government will ask the Treasury and the IRD to provide clarity on the interpretation of existing tax rules. He also confirmed that an all-weather track is a priority. There was relief throughout the industry that the economic benefits racing brings to New Zealand are being acknowledged. Hayden Dillon, Head of Corporate Agribusiness and Bloodstock Specialist for Crowe Horwath said, “The industry is desperate for this leadership and support, but has much to do to educate the rest of New Zealand, including the media, on the importance of racing to New Zealand.”
Dillon supports the industry receiving co-funding from the government and having Mr Peter’s previous government tax rules interpreted as intended. Dillon points out, “Racing and breeding is a significant industry in New Zealand with around 50,000 people participating and employed of which nearly 17,000 derive their income from it. It also represents around $1.6 billion in economic activity. That puts it up there with wine and seafood, but it’s not growing like them.” Mr Peters outlined the government’s intention to work with the Treasury and IRD to clarify the current rules and regulations around bloodstock write downs, and other taxation issues. Dillon continues, "I think it’s only fair the tax treatment of the industry reflects the risk involved and is comparable with similar industries, which contribute significantly to the New Zealand economy. We can look to Victoria and New South Wales in Australia as an example of what successful support from the government looks like."
With Mr Peters indicating the government will not cover the full cost of the all-weather track, but will share it with the industry, Dillon highlights that this may be the catalyst the racing clubs need to work together. “The ownership of the racing structure in New Zealand is complex. All race clubs are owned by local communities, and overtime they have had to move from their traditional club structure to a professional environment as they compete for the entertainment dollar, while remaining compliant and investing in their infrastructure. With the clubs failing to work together and evolve because of their old-school parochialism, New Zealand’s breeding and racing, and subsequently the economy, have suffered with facilities that are no longer fit for purpose.”
Dillon continues, “The New South Wales government supported the merger of two of their clubs (the AJC and STC in 2010) to build state-of-the-art facilities at Randwick and Rosehill, and we need to follow their lead.” With 25% of group one races in Australia being won by New Zealand horses, the industry’s success is on an international scale and the government’s support is a positive step forward.’’
Dillon concludes, “For New Zealand to retain our position as one of the world’s best in racing and breeding, the government’s support will be a cornerstone towards rebuilding the industry. Given that the TAB is government owned and has a legislated monopoly, the government has an obligation to provide support as the shareholder and investor, to an industry that has a significant economic impact and one with over 1 million participants.”