Racing: Politicians promise look at industry taxes

By MIKE DILLON

A view of the policy papers on the racing industry posted by three of the major political parties.

The difference between being the Government and the opposition shows in the policies.

LABOUR

Labour begins its policy paper by saying: "New Zealand racing has many natural competitive advantages. We have one of the best climates; our people having an outstanding reputation for skill; and we now have one of the biggest international markets ... however, the racing industry is struggling to survive, let alone grow."

Its policy takes no responsibility for its failure in its latest term in office to assist racing with a more favourable tax regime.

In "Taxation", its policy says:

"After 10 years of lobbying, the issue of whether racing is fairly taxed as a non-profit organisation rather than as an industry has not been resolved. The right to operate gaming machines has been conferred on racing because the code's bodies, organisations and clubs are incorporated societies.

"This does not always sit comfortably with the commercial needs of the industry and taxation is one aspect that has had a negative impact.

"Because it does not pay income tax, racing is subject to a high gaming duty, but with its multitude of incorporated societies and income tax regime would become complex and compliance costs would be high.

"The taxation review did not cover this complex issue so the Labour-led Government asked officials to work toward ensuring that racing's taxation is fair in comparison with other gaming sectors, including considering reducing the duty rate to reflect racing's unique situation. Labour will ensure this work is completed."

Labour promises it will:

* Work with the industry to identify its commercial opportunities by providing advice and facilitating links with other industries that have worked through similar issues.

* Encourage and facilitate a working relationship between racing and other industries such as tourism to help mainstream racing as a modern entertainment and hospitality industry.

* Help the industry develop its export markets, bloodstock and services through promotion of the New Zealand racing brand.

* Encourage and assist the industry to access existing trade network opportunities such as Trade New Zealand, Education New Zealand and its own, numerous people working abroad.

NATIONAL

In keeping with being an opposition party, rather than government, National gets into more specifics than Labour in its policies.

On "Taxation" its policy states:

"There is inequity with respect to taxation compared with other gaming competitors and the racing industry is struggling to survive in the wider competitive entertainment sector. The racing industry has 17 per cent (of the) market share, but pays an estimated 33 per cent of gaming tax, while the industry makes an overall loss."

Oddly, it was a National government which established and reviewed what is now called an inequity.

National says it will:

* Support investment in the bloodstock industry.

* Allow accelerated write-off of stallions over two years that encourages investment in breeding rather than leasing shuttle stallions.

* Allow the write-off of broodmares, in full, from age 12 years.

* Review the inequity in the taxation/duties over gaming activities.

On "Status Of Racing" National says it will:

* Review the contribution each code contributes to the industry.

* Review the statutory monopoly of (the) TAB for racing and sports betting.

* Work with the industry to develop a policy which specifically targets the innovation and reinvention of racing through different gaming products on and off course and alternative betting systems and organisations.

* Appoint a Gaming Commissioner who will act as Racing Ombudsman on racing matters.

* Allow non-club ownership of venues.

* Allow the governing board to have autonomy and the racing codes freedom from statutory direction except that contained in the directive powers of the board.

NEW ZEALAND FIRST

There is a sting in the tail of New Zealand First's election policy on horse racing.

Winston Peters seems fired up over racing for a politician, most of whom have done nothing for the racing industry apart from John Falloon's shoring up the industry's self-governing powers nine years ago.

Peters has had a swipe at casinos and says New Zealand First will put horse racing on the same footing as all gaming.

"One wonders how much the casinos have given to political parties for this campaign: New Zealand First turned down a sizeable sum on the principal that we cannot support millions of dollars being sucked out of our economy by foreign powers," says the New Zealand First racing policy.

Asked about this by the Herald, Winston Peters came up with a pretty useful line: "The problem with racing is the Parliamentary handicap ... " (the real one, not the one he was tongue-in-cheek referring to, was run at Trentham two weeks ago).

"The real handicap is politicians like Douglas, who changed things in 1986, which was seriously bad for racing.

"The New Zealand racing industry is not getting a fair go and is in desperate need of an internationally competitive policy.

"This is an industry that exports well in excess of $100 million each year, contributes hundreds of millions to the economy and employs tens of thousands of New Zealanders.

"However, by international comparison this industry has fallen dramatically behind since taxation allowances were withdrawn."

New Zealand First's solution, says Peters, is:

* An improved appreciation regime for stallions and broodmares

* A tax advantage for on-course betting

* Amending the taxation regulations that are patently unfair on the racing industry by putting all gaming on the same footing.

"This is an industry that has long failed to reach its potential because of a lack of action from successive governments only too happy to take the tax without proper regard for the international circumstances in which it was earned or to address the obvious lack of consistency between different forms of gaming."

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