KEY POINTS:
When Winston Peters was appointed Racing Minister in 2005, he was warmly welcomed by leaders of the industry. "He's going to be good for racing," said high-profile breeder Sir Patrick Hogan. Even he, however, may not have realised the degree of beneficence.
Mr Peters' latest piece of largesse, foreshadowed in this year's Budget, is a $9 million, three-year scheme to lift prize money for key races. It means the stake for the Mercedes Derby at Ellerslie will shoot up from $700,000 to a staggering $2.2 million.
Three other top thoroughbred races will also join the Kelt Capital Stakes and the Karaka Million in offering prize pools of $1 million or more. The industry is, understandably, jubilant. But, in reality, this is a taxpayer subsidy too far.
It is impossible to deny Mr Peters' claim that successive Governments have virtually ignored racing. It is even possible to agree that previous gaming tax legislation was anomalous in giving casinos an advantage over racing.
National, in the lead-up to the 2005 election, pledged to align the two, but Labour would make no such promise, saying it would not get into a bidding war. That all changed when New Zealand First formulated its coalition agreement with Labour.
Racing benefited swiftly and to the tune of $32 million as the Government's betting turnover levy was reduced to 4 per cent.
Industry spokesmen applauded a "long-awaited fair deal" and talked of the saving of racing. Yet they did not have to wait long for even more. Mr Peters has further boosted the industry through an accelerated writedown regime for bloodstock, overseeing the combining of betting pools for New Zealand and Australian racing, and providing $1 million to improve racecourses.
The latter taxpayer subsidy was designed to go, dollar for dollar, to racecourse projects that enhanced safety and raised the quality of facilities. The $9 million to lift prize money was framed the same way. The racing codes were meant to match the taxpayer input and provide a business plan outlining the economic benefits to their industry and the regions involved.
Now, however, not even that proviso remains. In the first year, the Government is boosting stakes by $2.05 million on the four races, while the boost from the industry for the races will be just $1.17 million.
Mr Peters makes light of this by talking of the promotion of international racing in this country, the raised awareness of the major cup carnivals and their increased economic worth to the host cities.
The success of Australia's major carnivals is the obvious reference point. He has also been keen to highlight indirect benefits, such as the encouragement of bloodstock investment and retention of this country's best horses.
All this is laudable. Nonetheless, it is impossible to defend significant sums of taxpayer money being spent this way. No other gambling enterprise, private or public, receives or would expect such support. Imagine, for example, if the Lotteries Commission sought taxpayer money to top up Lotto's prize pool because the game was waning in popularity. It would doubtless be told to go away and formulate means of regaining Lotto's popularity and profitability.
In effect, racing now enjoys a considerable head-start over other forms of gambling. This is the more unfair in that it is unnecessary. As Mr Peters has pointed out, the reduced gaming duty has led to race stakes being increased from $39 million in 2006 to an expected $60 million this year. He has already supplied the stimulus to revitalise the industry. Racing did not require further bounty from the public purse. The Government should butt out and let it run its own race.
