The Minister of Racing’s $9 million stake

Today the Greens have oral question number 11 in the House and it will be coming from Sue Bradford to the Minister for Racing:

Why is the Government putting 9 million dollars into high-stakes racing in this week’s budget, given that in 2006 the racing industry received a tax windfall worth approximately 32 million dollars a year?

From a quick search of the Parliamentary website I think this will be the first oral question the Minister of Racing has answered in Parliament this term.

The question follows Sue Bradford’s challenge on Friday to Winston Peters, the Minister of Racing, over his budget announcement:

“He appears committed to doing everything possible to help those in the racing world who already have the most – the wealthiest and most successful breeders, trainers and owners…

“Winston Peters already succeeded two years ago in securing duty relief of around $32 million for racing, of which around $18 million was directed towards stakes.

“On top of this, racing is now getting $22 million a year in pokie funding, much of which is going towards stakes, including naming rights on major races. This is money torn from some of the poorest people and communities in New Zealand and redistributed to some of the richest.

The Herald has included the $9 million on Labour’s Porkometer tally (and presumably it will also fit on New Zealand First’s Porkometer if the Herald gives it one too).  Perhaps this stakes money is all meant to be placatory pork, given the racing industry’s antipathy towards Labour last election as outlined in The Hollow Men.

Palmerston North Boxing Day Races - probably not getting $9 million

Photo Credit: jesstherese, recording the Palmerston North Boxing Day Races, which are unlikely to be picking up much of the $9 million stake.

15 Comments Posted

  1. Unfortunately, any addiction can be crippling to a family. No addiction is any “better” than an other. Most family members are surprised and confused by any addiction and feel that they are unable to help. Ultimately, an addiction can ruin a person’s life and thier family along with it.

  2. I see nothing wrong with Pokie machines, if idiots want to waste their money on the them then all well and good.

    However the money spent on the things should go back to that community and the people that use them.

    Let sporting clubs install them and keep all of the profits, as it is at the moment the people who administer the grants have to consider the application from the local Ballet society (only used as an example) when they have not contributed one cent to fund.

  3. What really winds me up is that Section 4(b) of the Gambling Act 2003 allows pokie machine funds to be used for “promoting, controlling, and conducting race meetings under the Racing Act 2003, including the payment of stakes“.

    The allowing of paying for stakes dramatically reduces the money available to be returned to the community for non-gambling purposes.

  4. Katie

    “the others have been seriously considering getting out of the industry, because it is not the greatest business to pin your future on.”

    While that may be the case it does not warrant the govt spending my money subsidizing the industry, lets be honest here this is the Labour govts payback to Winston for his support.

  5. I grew up on Thoroughbred Stud farms in the Waikato, for some of my childhood, and have relatives still involved in the industry.

    Apart from those with gambling addictions, the others have been seriously considering getting out of the industry, because it is not the greatest business to pin your future on. Generally, because your profits are dependent on the whims of gambling addicts…

  6. StephenR said: Hope the answer is posted here! GOD Peters annoys me.

    Okay, here you go. As usual with the Minister for Racing (wasn’t that one of Russ Hinze’s portfolios in the corrupt Bjelke-Petersen Queensland State Government of the 70s and 80s – not just involved with scams is racing but also with the licensing of Jupiters Casino. One of Hinze’s favourite sayings was “Never hold an inquiry unless you know what the outcome will be”.)

    Anyway, Winston First, Minister of Racing (and no relation to Russ Hinze btw), has replied, in his usual manner, with more style and bluster than substance in fact:

    11. SUE BRADFORD (Green) to the Minister for Racing: Why is the Government putting $9 million into high-stakes racing in this week’s Budget, given that in 2006 the racing industry received a tax windfall worth approximately $32 million a year?

    Rt Hon WINSTON PETERS (Minister for Racing): As my friend Mr Maharey said, it is all good news. [Interruption] Oh, the foreign affairs budget is great as well. [Interruption] Well, it has actually doubled in 5 years—we do not lose our debates like that member used to. The answer, Madam Speaker, is because this initiative will return New Zealand to the forefront of international racing. It will help attract world-class overseas competitors, enhance breeding values and export sales, and revive public interest in racing. The net result will be a fairer but greater fiscal dividend to the Government. The matter about which the member spoke in terms of the 2-year-old change to the taxation regime has seen this outcome: overall, premier sales at Karaka this year were up by 36 percent, by $111 million; select sales were up as well, by 33 percent; and the festival sales were up by a massive 81 percent. That is a return in dividends to the Government, as well.

    Sue Bradford: What makes the Minister think that gifting taxpayer money to prestige racing stakes should be a priority, when according to a New Zealand Racing Board press release on 15 April this year the board currently has an operating surplus of $75 million and net assets of over $115 million?

    Rt Hon WINSTON PETERS: Because anyone who knows about racing knows that the board has to have certain reserves and a contingency reserve for certain events. The board has always had itself in a reserve situation, so that at any given time the racing establishment, for capital development or for fighting a potential outbreak of equine flu if it were to happen in this country, would be in a position to handle it. That is why we have had that, which is nothing new. But what is new, of course, is a fairer tax regime, some confidence in the industry, and some enlightened policy that will see a massive return for this country in the immediate, short-term, and long-term future.

    R Doug Woolerton: What has been the economic impact on the racing industry since the changes initiated in Budget 2006?

    Rt Hon WINSTON PETERS: As I said, we have received reports of an economic impact that has seen some massive changes. I have just given the House, for example, the Karaka sales results, which are of premier, select, and festival sales, and they are up a staggering percentage from what they were just a year ago. We also might note that as a consequence of having confidence in this country’s racing industry, we have won nearly every decent race in Australia in the last 6 months.

    Sue Bradford: Why does the Minister not do something about ensuring that the New Zealand Racing Board’s extensive reserves—or at least some of them—are released to enable clubs like Avondale and other struggling clubs to upgrade and maintain their infrastructure, rather than see it as a priority to put badly needed taxpayer money into races that he calls the crème de la crème of New Zealand racing?

    Rt Hon WINSTON PETERS: The reality is that the New Zealand racing industry is built on the provinces. That is why we have, for example, a safety fund, and it is why so many breeders and people associated with racing in the provinces of New Zealand, from whence these horses come, are so keen on this idea. For example, the biggest race in New Zealand is a co-sponsorship race in the Hawke’s Bay sponsored by Sam Kelt; its stake is $2.2 million. The reality is that with some co-sponsorship we can put ourselves back on the radar screen and have a better environment in which to sell our horses, and that the Government in the long term will be the big winner.

    Ron Mark: Has the Minister received any reports regarding the industry’s reaction to his latest announcements?

    Rt Hon WINSTON PETERS: All I can say is that the industry has been overwhelmingly positive. I want to make the point to some members here, who do not seem to understand this industry, that there are thousands of young people—teenagers—who get up in the morning at 4 o’clock, go out to the stables, and do the business because they are keen on this sort of employment. Because of the change in the racing industry’s economic environment, they are today better rewarded. We will see young jockeys and apprentices stay in New Zealand because there is more opportunity as a consequence of a very enlightened policy—so enlightened that the National Party thought it would steal it 2 days before the last election.

    Sue Bradford: Will the Minister turn his attention to the way in which over $20 million a year of pokie money is being diverted away from some of our poorest communities, in places like South Auckland, and into some of our richest, like racing owners and trainers, and will he advise his colleague the Minister of Internal Affairs that racing stakes should be removed as a legitimate purpose for the distribution of pokie profits?

    Rt Hon WINSTON PETERS: That is a matter for the Minister of Internal Affairs, but I will just say that under the Gambling Act racing is an authorised purpose and has been for a long, long time. I make one point to some of the people lining up on that issue: I personally do not see why someone who never goes near a pokie machine but has some highfalutin, self-dreamt-up public scheme should have more access to this money than the people who do go near pokie machines and are supporters of races. It comes down to fairness and equity. Of all the hundreds of millions of dollars that are picked up in racing, that is a very small amount to promote an industry that could be—and, in a short time, will be—a significant exporter of horses from this country.

  7. Quite apart from promoting gambling and all the social problems that implies, horse racing is incredibly cruel to animals.

  8. I wouldn’t call all of that spending ‘pork’ though…e.g. $8.4 million over two years for Search and Rescue.

  9. The Problem Gambling Foundation have just released this media statement on this issue (not available online yet):

    Obscene handout to race winners

    A $9 million handout to wealthy race horse owners is a disgrace says the Problem Gambling Foundation.

    CEO John Stansfield says it is obscene that the racing industry that already receives $1.8 million a month in pokie funding and generous tax concessions is getting even more taxpayer money in this week’s budget.

    Two years ago the racing industry was given duty relief of $32 million. About $18 went towards increasing stakes.

    “A week or so ago the Child Poverty Action Group published a damning report on child poverty in New Zealand,” Mr Stansfield says.

    “Every school in the country is crying out for more funding.

    “The list of things this money could be spent on goes on and on.”

    Mr Stansfield says that a couple of weeks ago a spokesperson for NZ Thoroughbred Racing was reported as saying his organisation received enough money from the TAB to run successful race meetings.

    “We have NZTR saying they don’t even need the pokie money they get, let alone a huge handout of taxpayer money on top of that.

    “This is an extraordinary way for government funding to work.

    “I suspect it is about who you know, and what favours you owe, not what your need is.”

    The racing industry is celebrating its new capacity to fund more $1 million stakes races but Mr Stansfield says there appears to be little evidence that increasing the number of high stake races was bringing any real benefit to racing or the country as a whole.

    “You won’t see the small racing clubs that are struggling benefiting from this money. It will end up in the hands of an elite group who already have more money than they know what to do with.

    “The minute this handout is cemented in the champagne crowd who are rich enough to have horses in this sort of race will just start demanding $2million stakes paid for by the taxpayer.

    “You can be sure they will never be happy no matter how much we give them.

    “Meanwhile manufacturers struggle to keep people in employment and ordinary Kiwis battle to meet soaring food and petrol prices.”

  10. Most of the time I find Sue Bradford annoying but subsidizing the gambling industry sounds like a terrible waste of taxpayers money and disturbing endorsement of this exploitative business.

  11. frog said: I think this will be the first oral question the Minister of Racing has answered in Parliament this term.

    Don’t count on it frog. It may be the first question the Minister of Racing has been asked, but Winston is very adept at NOT answering questions!

    BB, how many times do I have to repeat for you that the Greens are not in coalition with the Government and don’t even support them on confidence and supply?

  12. Frog

    Why post this here?, why not ask your coalition partner?

    Are you trying to cleanse yourself of the filth surrounding this govt?

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