Aug 23, 2008

Government Support For The Racing Industry

The NZ herald Editorial looks at the support that Winston Peters has arranged for the racing industry. The Editorial points out that this is unfair

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.

So if this is so very wrong, why has it happened and why was Treasury's advice ignored?