Racing: Battle for fair tax moving up a gear

More than a decade ago Dave O'Sullivan and I spent a huge amount of time over a period of more than nine months flying to Wellington regularly.

It's a town that if you don't like it, you REALLY don't. And I don't.

The country's first Racing Minister, John Falloon, set up a small panel because, admirably, he decided to legislate to give racing its own strength rather than to continually have its decisions endorsed by Parliament. He achieved that.

Only weeks later the body that was to administer that power, the Racing Industry Board, was inaugurated and Tom Williams was appointed its first chairman.

Days later, at Ellerslie on Derby Day, I caught Tom Williams peering out the first floor window of the grandstand at the Fashions In The Field entrants. Or did he catch me - I don't remember.

I said: "Tom, do you know the first thing you have to do - you have to step in tomorrow and sack a dozen racing clubs. There'll be a huge scrap for a few months and this time next year no one will remember."

"No," said Tom, "it has to happen by attrition."

At precisely that moment Dave O'Sullivan and I and a handful of others had wasted nine months.

Attrition is clearly a lengthy process - we are still waiting for the first racing club to fall off the cliff, despite most declaring they're only a step or two away.

The reason for axing a significant number of racing clubs - quite apart from the fact that we have more of them than England for its 60 million population - was to show the Government something.

And we all have to show them things regularly - we are governed by a party, the head of which hadn't heard of John Farnham.

What Parliament needed to be shown was that after John Falloon worked hard to give the racing industry a hand - he even returned a bigger percentage of the betting dollar to the punter - racing was prepared to help itself. To tidy up its own act.

That's been part of racing's problem. When things got tough racing cried "help" to the government. Little thought was given to improving its own situation.

And by racing, we are not talking about the REAL people in the industry - trainers, jockeys, owners and punters - we speak of the racing administrators, who held the power to change.

Largely they were businessmen who used racing as their hobby. They are guilty of almost criminal negligence in handling racing in a way they would never have tolerated in their own businesses.

During the Falloon revamp, submissions were sought. I have signed submissions from racing clubs that were almost hostile to the revamp.

If published, they would create many red faces among still prominent club administrators who stated the industry in the early 1990s was healthy and on the up. Leave it alone, they said.

Racing hasn't always helped itself, that is until the NZ Racing Board's latest taxation case to Government, which is impressive.

All of which leads to the overall racing industry's current push for "Fair Tax".

This time the Racing Board is not alone. The ginger group arranged for horses' rumps to be painted with "Fair Tax" at meetings in the last three weeks and the groundswell will not go away.

Government's traditional response to calls for help has been: 'This is a two-way street, you go first'.

But that is not good enough in this situation at this time. Racing administrators, the amateurs, have let us down. That is no reason to disadvantage or ignore the pleas of those that matter - licenceholders, owners and punters - when it can be clearly shown racing is unfairly taxed.

Racing Minister Damien O'Connor's ludicrous statement that the Racing Board's taxation proposal arrived too late in January to be included in the Budget simply doesn't wash.

His public apology for stating that racing held a privileged position sounded empty. This time racing is not forgetting promises.

On July 1, 2001, the then Racing Minister Annette King told the NZ Thoroughbred Racing's AGM in Wellington: " ... the current taxation regulations as they affect the racing industry are unfair and the Prime Minister and I accept that you are not on a level playing field."

In June, 2001, King told the Harness Racing AGM: "My Government realises racing has been paying an unfair share of the gaming duty for a long time and my Government intends removing the gaming tax anomaly that penalises racing."

As the Racing Board submission points out: "[A] KPMG report concluded that New Zealand racing is over-taxed compared with other gaming activities given its regulatory requirements to develop a strong racing industry."

And: "Both race club operation and racing animal ownership make substantial losses in aggregate and so the gaming duty is in effect a social tax, not an income tax."

Of the leading racing countries only Hong Kong has a higher take-out rate from the betting dollar than New Zealand. Recently Ireland, Britain, Hong Kong and Singapore have reduced their tax take. Ireland, the first, has had spectacular success, as it did with its general economy when it reduced taxation.

That racing should be lumped into the gaming arena is laughable. Casinos and gaming machines are gaming - horse racing is an industry, similar, but more like rugby.

Given its $63 million tax contribution to government, separate from a huge GST payment, racing's participants deserve a vibrant industry.

If rugby paid tax and foundered because of an inequitable tax scale, politicians would would fight each other to be the first to help out.

Yet they get more out of racing.

Enough is enough. Backs are against the wall and they are starting to move forward.

Footnote: The Fair Tax committee has called off its proposed boycott of next Wednesday's Avondale Jockey Club meeting because it wants to hear the election racing policies of the five main parties, scheduled to be revealed at Te Rapa Racecourse next Thursday night.

"It is unfair on Avondale as a club, but the racecourse is in the Prime Minister's electorate," said Fair Tax chairman Rob McAnulty.

"We're serious about this and we're getting traction.

"In two terms this Government has spent more than $100 million on the arts and tell me what that generates for the country.

"If we were handing out degrees in bone carving or canoeing we'd have $20 million overnight if we were insolvent.

"We WILL be taking action."