Bill English National Finance Spokesperson

26 September 2001

Govt becomes one-armed-bandit, robbing sports clubs

National's Finance spokesman Bill English has today revealed a secret Government proposal which could have a huge impact on sports clubs.

"I have been made aware of documents which propose a "high rate of tax" on poker machines," Bill English said today.

"This "Community Purposes Tax" could be as high as 30%, collecting $50m a year in revenue for the Government. At present that money gets distributed to local sports clubs.

"Internal Affairs indicates that at present profits from slot machines contribute $150m a year to local charities and sports clubs. The Government's plan would cut that to around $100m.

"Sports clubs will be among the hardest hit, and this proposal could run some of those clubs into the ground. Many sports clubs use the money from their pokies to pay for their activities, and clubs with no facilities frequently purchase their gear with money from a local pub's slot machines. This Government tax grab will kill that community sponsorship in many cases.

"The Government papers indicate that this sports club tax will be distributed on a centralised basis, leaving many local sports clubs out of the loop.

"It also appears the Government will try to manoeuvre a number of trade-offs, whereby these funds would pay for things the Government currently pays for. These would be similar in structure to the million dollars Pub Charities donated last week to Plunketline, under an arrangement which allowed the Government to cut its funding by $1m.

"Every pub and club, except for chartered clubs, will become a tax collector for the Government.

"This new tax follows on from the Government's proposals to tax charities. In fact most sports clubs will be hit by both.

"We understand the tax will be redistributed with an emphasis on arts and Maori," Bill English said.

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