Mount Gambier Gold Cup

Mr BELL (Mount Gambier) (15:24): It is a bit hard to follow that grieve, but I will give it a go. Last week, I attended Mount Gambier's annual Gold Cup racing carnival, which is one of South Australia's longest running—

An honourable member: Did you win?

Mr BELL: No, I did not win. It is one of the most popular regional race meetings. The racing industry is very well supported in our region and the Gold Cup Carnival is also a major economic contributor to Mount Gambier and the wider Limestone Coast. This year, six of the nine races were won by local trainers, so the prize money will go back into our local community to support local businesses and local jobs.

The flow-on effect from the Gold Cup Carnival supports trainers, jockeys, local hotels, caterers, hospitality staff, transport, accommodation, fashion businesses and the list goes on and on. The Mount Gambier Racing Club committee is to be congratulated on a successful event. I would like to acknowledge the president, John Fartch; vice-president, Mark Thompson; and members Barry Carrail, Tom Ellis, Graham Bell, Don Pegler, John O'Connor, Adam Creek and Maryanne Latchford.

The Glenburnie Racecourse has undergone a $3.3 million redevelopment over the last two years to improve the track's drainage system and racing surface. Despite the success of this year's Gold Cup, there are some issues looming over our state's racing industry, which have recently been brought to my attention. Brett Watson is the General Manager of the Mount Gambier Racing Club and he has raised some concerns about the future of South Australian racing and in particular the point of consumption tax.

It is good that the minister is here today because he has offered me time in his office with his staff to talk about the point of consumption tax. Brett Watson has written to the Treasurer, and I quote:

We strongly believe our club is vital to the future of the racing industry…The future of our club is dependent on the current and future State Governments providing an adequate level of funding to remain both sustainable and provide for capital improvements.

As the only regional dedicated training facility, the current loss of revenue directly impacts the viability of many of the region's trainers, due to the reduction in prizemoney.

Apart from the fact the POC [point of consumption tax] is significantly higher than Australia's two largest states (New South Wales and Victoria), South Australia is now the only state which does not use the POC tax to provide any ongoing industry support.

Other state governments are supporting their racing industries, leading to an exodus of industry personnel looking for better returns across the border.

The current situation is not sustainable and is severely disadvantaging our industry [in South Australia].

Point of consumption tax is designed to generate revenue from online betting, and the tax is payable where the bet is placed; therefore, bets placed in South Australia generate revenue for the South Australian government. The rate differs state by state, but South Australia's 15 per cent tax rate is equal highest in Australia, along with Western Australia and Queensland, and significantly higher than New South Wales and Victoria, at 10 per cent and 8 per cent respectively. The state government retains about $60 million a year from the tax. This tax is having a big impact on the racing industry.

In December last year, Thoroughbred Racing SA announced a $2.25 million cut in infrastructure funding for its 25 clubs due to the impact of the tax. The body was also forced to cut over $1 million in prize money. Frances Nelson, the Chair of Thoroughbred Racing SA, said that the body had 'no choice', as revenue was being directly impacted by the tax. She said:

The prizemoney cuts will also have a direct impact on…our ability to attract trainers from New South Wales, Victoria and NZ [New Zealand] as we have in the past. More importantly, it will also inhibit our ability to keep our trainers in South Australia, some of whom are already moving their operations interstate, with the resultant loss of jobs…

Quite often when industries come to you as a local member, the first thing you say is, ' Don't always come with a problem; come with a solution.' The racing industry have spoken to me about their solution and what they would like to see—because this industry supports more than 3,600 people and generates $400 million every year in economic benefits for South Australia—is the POC be reduced to 10 per cent and 75 per cent of that point of consumption tax returned to the industry. It is derived from the industry, so it goes back.

This would leave South Australia in a neutral position in regard to the state government, where the government does not put money into the industry but also does not take money away from the industry. More precisely, any money raised by the industry is returned to the industry.