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House of Assembly - Fifty-Second Parliament, First Session (52-1)
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GAMING MACHINES (MISCELLANEOUS) AMENDMENT BILL

Second Reading

Second reading debate resumed.

Mr VAN HOLST PELLEKAAN (Stuart) (11:41): The first thing for me to do is to declare an interest: I own a third share in a hotel with gaming licences, but it is not in Stuart; it is in the outback. It is not in Adelaide and, in fact, it is not even in a small regional town—it is well in the outback. Through that business, I am also a member of the Australian Hotels Association. I would like to get that on the record before I start.

As the member for Bragg quite rightly pointed out, this is a conscience vote for the Liberal Party. One of the very positive things about participating in the Liberal Party is that we get that opportunity quite regularly, so it is important that that is on the record as well.

I would also like to say that, while I am a business owner and a shareholder in a venue that has poker machines and benefits from poker machines, I can quite honestly say that I have no interest in them as a player. I really do not understand what people find enjoyable about playing pokies. Sitting in front of a machine, putting coins in and hoping that the machine decides whether you are going to win or lose—whether you put in $2, $200 or $2,000—has no interest for me.

Consequently, because it does not interest me as a player at a personal level, and because I have a business interest in the industry (albeit relatively small, I am sure, compared with most other people who have an interest in this industry), I have thought about this a lot. I have lived in and run hotels that have poker machines, so I have thought about this issue quite a lot. I do not claim to be an expert at all, but I would like to share a few personal views.

I certainly support anything at all that is going to reduce problem gambling. Problem gambling will always be with us. Addiction to gambling and problem gambling is not just confined to pokies, and there is nothing we can do within the gaming industry to remove it from society. It is my experience that, generally speaking, gamblers are gamblers and that if one avenue is closed off they will find another avenue.

People gamble because it is in their nature, and most people control it, of course, and manage very well. However, gambling has been with us for thousands of years; we will not remove it and we will not remove some of the problems. It is no different from eating—some people eat too much—and a whole range of different things in the human race and human nature. However, I do wholeheartedly support trying to reduce problem gambling.

With regard to issues of addiction, largely we are also talking about saving people from themselves, and we as responsible community leaders need to take some lead there. Of course, the primary responsibility is with the people who gamble and who have the problem to actually try to help themselves. Certainly, as community leaders and people contributing to legislation, it is very important that we play our part as well.

I pick up on something the member for Bragg said about the pokie industry specifically. It is a few years since I have had hands-on involvement in the operation of pokie machines, but I did do it for seven years. At that point in time (and I suspect still) the industry in South Australia was governed such that, on average, the return to players was a minimum of 85 per cent. Again, why would you play a machine; why would you participate in a form of gambling and/or a form of entertainment or amusement when you know that statistics tell you that, the more you play, the more you are going to come back to the industry average? You might just come in, put in your $2 or $10 and you might hit the jackpot, or you might just give it away. If you play day in and day out, you will come back closer to that average.

As an average player on an average machine in an average gaming establishment, you will lose 15 per cent of your money. It is just the way it is set up. That is true of gambling across the board. Gambling by definition means that, on average, you lose; otherwise, there would not be bookmakers, the TAB, or people wanting to do it. People must understand that this industry is quite openly and quite publicly predicated on the fact that, if you play, the average player will lose their money. There is no secret about that.

With regard to the management of the pokie industry, I think that, in general, the pokie industry is managed very well. I would like to say that publicans across our state and the responsible people who work within those businesses work within very strong guidelines and do so willingly. They have to comply with not only laws and regulations but also a voluntary code of practice. There are all sorts of things that require participants from the hotel industry to act responsibly. I think it is worth putting on the record that, by and large—and I am not aware of personal instances—the industry does fulfil its obligations very well and also goes over and above them with further codes of conduct.

I think it is important to compliment the industry in that regard. It is legal to have pokie machines and to operate them and, so long as a business proprietor does that within the constraints of the law and operates in the way that they should, it is their legal entitlement to do that. That is fair trade and fair enterprise. People should not feel ashamed about the fact that they participate in that industry. Getting back to the main point here, though, problem gambling is an issue and I do support any measures that will help reduce problem gambling.

There are many benefits from the gaming industry and I would like to focus on the benefits in a regional context. Everybody here knows that is my main focus, namely, the people of Stuart and then, more broadly, regional South Australia. We need to have successful businesses. We must have successful businesses in regional towns and small places. If we do not have successful businesses, we will not have successful communities, employment and people providing apprenticeships. If we do not have strong businesses, they will not have the opportunity to stay in their small, regional town and develop lives, careers, homes and families.

Although not every hotel has gaming machines, certainly within the hotel industry they are very important. It should not be underestimated how much this industry contributes to regional South Australia both through the money it returns through the gaming tax and the good work of many successful businesses. It is very important to highlight that fact, as well as the tourism benefit. Whether or not we like it (and keep in mind I cannot understand what the attraction is), a lot of people enjoy playing the pokies when on holidays. A lot of those people travel through regional South Australia, and they will stay and spend more money in regional towns if they have the opportunity to enjoy gaming machines.

With regard to compliance—and the member for Bragg touched on a couple of things—there is already extremely strong compliance within the industry. I have no hesitation at all in supporting greater compliance and greater obligations. I do not want extra red tape. As a person who has done meter reads at 4 o'clock in the morning for years and years when machines have gone off, I am certainly not keen on extra red tape and bureaucracy.

However, with regard to extra compliance and strengthening laws that prevent any sort of tampering whatsoever, I certainly support that entirely, and I would have no hesitation in supporting, as with these in front of us, greater penalties for anybody who breaches those conditions. As far as I am concerned you should lose your licence, lose your entire hotel, if you knowingly, willingly, actively breach your responsibilities as a hotelier and as the owner of the gaming licence. I have no concerns about that whatsoever.

There has been discussion—again the member for Bragg touched on this—with regard to the concept of reduced hours. I understand the issue about complying with code of conduct practices, but there is a suggestion floating around the place that perhaps there should be uniform hours throughout our industry. I do not know whether that is an amendment that will be formally put forward, but I would actually support that—it would not hurt regional South Australia at all.

I support the idea that there would be hours across the state when it was not possible to gamble on gaming machines, because I think it is not necessary to have an opportunity to use poker machines 24 hours a day, and it certainly would not hurt regional South Australia or any of the hotels, businesses or communities that I represent.

With regard to the $50,000 fixed rate for the transfer of poker machines and poker machine licence entitlements, this bill actually suggests removing that. As a person who is fully supportive of free enterprise, I have no hesitation in removing that $50,000 numerate level and letting the market take effect. I think that is 100 per cent appropriate, as a person who believes in free enterprise and believes in letting the market control a lot of things—not everything, but a lot of things.

I would like, though, to highlight and foreshadow a very real genuine problem that I believe will follow through from reducing that, or potentially, and I think probably, reducing that $50,000 by opening it up. There will be a shift of gaming entitlements from smaller venues to bigger venues. I am sure that is the case, and that concerns me enormously. It concerns me because the smaller venues will often be in country and rural regional areas and it will shift them to metro areas. I do not like that for the reason I have mentioned before: it will make businesses less profitable in those areas. However, if those people want to sell their machines for a price that they want to negotiate, I support that fully, but I want to flag a real concern about that.

The other issue that I think is very important is that I do not actually believe that it will reduce gambling, because there will be a shift—I understand that one in four machines will be taken out of the system—of machines and entitlements from lower volume, lower turnover, lower profit establishments to higher volume, higher turnover, higher profit establishments. It will be the bigger gaming venues that can afford to buy the machines from the smaller gaming venues, and the smaller gaming venues will be inclined to take that capital opportunity, to make the sale and let the licence go.

All that will mean is that each one of those machines that is left in the industry is going to have a higher turnover. Each one of those machines will have more people playing it and more dollars put through it. We all know that for every dollar that goes through a gaming machine, a small percentage belongs to problem gamblers. So, clearly, if you increase the gaming and the dollar turnover that goes through some of these establishments, you will increase the event of problem gambling.

I think it is very likely that removing this cap—while I certainly support it for free enterprise reasons—will move problem gambling in the opposite direction to the way it is intended. It will create more gambling, and consequently the small share of the industry that has a problem will also grow as well.

I will support the bill, as I said at the beginning. It is a conscience vote for us. I will support it, but I would like to have it very clearly on record that I support the bill because it endeavours to address problem gambling and I would like to do everything that I can to contribute to addressing problem gambling. I cannot understand why people want to play pokie machines. I support their right to do it, but I would like to support this because it addresses problem gambling.

I would like to support it because it removes that $50,000 legislated figure and I believe that the free market should be allowed to operate and people should be allowed to sell their machines for whatever they think they are worth. However, I would like to say very, very clearly that I worry about the impact that that is likely to have on regional communities by making some of the businesses in those regional areas less successful and, consequently, able to provide less sponsorship for the local sporting team, less employment, fewer apprenticeships and all the things I have mentioned before. I also suspect, although I cannot provide any statistics, that the reduction, or the removal, which I believe will turn into a reduction, in the $50,000 will shift those machines from smaller turnovers to larger turnovers, and I think that is likely not to help problem gamblers.

Ms THOMPSON (Reynell) (11:56): I wish to speak briefly on this to indicate how much I welcome this legislation, which has been a long time in the making. Indeed, the minister for the environment and I had many conversations on this matter when he was the minister for gambling, and also when the member in the other place, the Hon. Carmel Zollo, was minister, she and I also had a number of conversations on various aspects of the issue of regulation of gaming machines. Some of those conversations are reflected in the bill that we are considering today.

I particularly welcome the lifting of the $50,000 bar. The minister for the environment announced that about three years ago, as I recall, but matters were deferred because of the need to take account of what the Productivity Commission had to say, and that has now been done. I hear what the member for Stuart opposite said about the likely impact of that on small facilities, and indeed it is a relatively small facility in my area that has been desperately waiting for this measure. It is going to cut both ways.

It may work differently in regional South Australia, but some small clubs are finding that it costs them more to run gaming because of the requirements and restrictions that are involved and the number of staff they need to have. Whereas some other tasks in a small licensed club can be undertaken by volunteers, the regulations that we have in an attempt to control the issue of problem gambling mean that trained staff have to be used and it is therefore not an asset for some clubs.

That might apply in Stuart, in regional South Australia, as well. Some of the smaller establishments might make efficiencies in that way. So we have had an artificial constraint on trade and the removal of that will enable clubs and pubs to make their own personal decisions and their own business decisions and follow the wishes of their members in the case of clubs. I certainly welcome that.

The other important measure relates to the experience I had, when I was representing groups and residents within our community who were opposed to a new gaming centre being established in a particularly prominent place, which was in close proximity to a number of important community places, such as the war memorial across the road and, within a couple of hundred metres, three childcare centres and two schools. They did not like that. It also abutted residents in a way that good town planning would never have allowed for.

The fact that we had to go through the development approvals first, where the issue of the impact of that activity was not taken into account, was unfair for everyone, really. The proponents of the development spent I do not know how much, but they ended up in court dealing with that, and the residents certainly went through much heartache. It was not an easy decision for some of the members of council at the time, because everybody was conscious that this fitted in with all the definitions in the current planning arrangements for the City of Onkaparinga.

The fact that I had thousands and thousands of names on petitions, that Neighbourhood Watch people had gone out on a day that was 42 degrees to deliver questionnaires to neighbours and that well over a third of neighbours actually responded indicated that there was a fair bit of community feeling. So, because we could not do that social effects test before we did the development approvals, everybody was put to considerable inconvenience.

Another issue is the fact that there will now be some definitions about what will be considered in the social effects test. Many community organisations, when they heard that they could not do much in relation to the development application, wanted to start putting together their submissions to the social effects test, but it really was not clear whether it was worth doing, and it looked very much like it was currently based on a purely mathematical formula. So, l am one who will be wanting to provide submissions to the commissioner about the types of matters that should be considered in the social effects test.

Like the member for Stuart, I am not, in principle, opposed to poker machines. I also see that there are many paths to perdition. The problem is excess. Just as there is a problem with excess intake of food and excess gambling on the stock exchange and on the horses, the issue is excess. I believe that we need to focus on issues relating to people who have addictions and habitual behaviour problems rather than the machines.

Not everybody agrees with that, but it is my view that we need to talk about gambling and addictions of all sorts and do far more work as a community to try to unpick some of the issues of addiction. In that regard, I commend the work that is done by Flinders University and the Flinders Medical Centre, which seems to have a very effective program in relation to overcoming some of the issues to do with addiction. Of course, that research is largely funded from the Gamblers Rehabilitation Fund, and I encourage that to continue.

Another important measure, I think, is the fact that there will not be any permission for machines to be placed in smoking areas. At one stage, I was on the hospitality smoke-free task force, and that was a matter we considered extensively. I think members of the task force in general knew that the abolition of smoking in gambling areas was likely to have the biggest impact of any of the measures that had previously been proposed in relation to problem gambling.

We have been through the idea of having to have clocks in the room and all sorts of strange things that really did not seem to make any impact on the amount of gaming revenue. How much they made on problem gambling we do not know. My view is that people with addictive behaviours often have more than one addiction. They may have a nicotine addiction and they may have a gambling addiction, and they may have other addictions as well which, again, is why it is my focus on the behaviour.

Overall, I think these are some very sensible measures that will help the community to deal with the problem of problem gambling and enable people who welcome gaming machines as a form of entertainment to continue. Like the member for Stuart, I do not actually know what you do with them; I have tried a couple of times. I remember one time having the Hon. Anne Levy out doorknocking with me on a hot day and we needed somewhere cool, so we went to the pub. We thought we would get rid of the change in our pockets while we had a glass of soda water and between us we could not work out what you actually did.

The Hon. A. Koutsantonis interjecting:

Ms THOMPSON: I didn't want to have anything else while I was out doorknocking. I am one of these people who go to Oakbank regularly with my prospective losses in one pocket and my real money in the other pocket, and never the twain do meet. If I come home with anything in the prospective losses pocket, I have won for the day—that is a very good day.

I do not think there is any magic bullet in relation to poker machines. It will be interesting to see what happens at the federal level. I think that a predetermined spending level is probably very sensible. It is somewhat like me going to Oakbank with my losses in one pocket. That may be a useful measure, but in the meantime I think the measures proposed in this bill enable the industry, which is generally conducted in a very responsible way in this state—and it is an industry that has been prepared to cooperate with the concerned sector, as we call it, to try to work through some of the issues of problem gambling—to provide efficient and enjoyable entertainment to the community. I commend the bill to the house and I congratulate the minister on finalising many years of negotiations undertaken by many people and predecessors.

The Hon. I.F. EVANS (Davenport) (12:07): I rise to comment on the Gaming Machines (Miscellaneous) Amendment Bill 2010. This is a conscience matter for the Liberal Party, so nothing I say should be interpreted as Liberal Party policy.

The Hon. A. Koutsantonis interjecting:

The Hon. I.F. EVANS: The minister interjects saying that it will be, so clearly the government is going to run a scare campaign based on misinformation, but it is good of the minister to put that on the record through interjection.

The Hon. A. Koutsantonis: No worries, shadow treasurer.

The Hon. I.F. EVANS: The minister interjects, 'No worries, shadow treasurer,' so clearly he is going to run a campaign with the Hotels Association about my views on poker machines. The Hotels Association is well aware of my views about poker machines, so I do not fear that in any shape or form.

I want to touch on a few of the issues, and I am probably going to be the odd one out in this debate largely in relation to some of these issues. I want to go back because, when the Labor Party first proposed through a private member's bill of treasurer Frank Blevins to introduce poker machines, we all remember the great drama of Mario Feleppa being chased down a corridor by premier Bannon and others to get that last vote to get it through the upper house. One of the arguments given was that the hotel industry was struggling and this would be a boon to the industry.

As luck would have it I was not in the place at that time, but that was essentially one part of what was a long and complicated argument. I suspect that if you lift the $50,000 cap, for a lot of regional hotels they will be back in that position within the next five to 10 years. The reason I think they will be back in that position within the next five or 10 years is simply—and the member for Stuart touched on this in his contribution—that the government seeks to lift the $50,000 price cap and make it an open market on gaming machines in an attempt to reduce the number of gaming machines down to a target set by the Premier some years ago.

If the market works as markets normally do, the highest price will be paid for the machine by those trading entities that can get the greatest rate of return from them, the highest profit, and where you get the highest profit generally from gaming machines is in metropolitan Adelaide, particularly the lower socioeconomic areas of metropolitan Adelaide.

In my view, what will happen over time is that, once you lift the cap, the low profit, low turnover machines (which I would classify as being generally in regional hotels and clubs) will be purchased by the bigger trading entities in Adelaide, and there will be a transfer of machines from regional South Australia that are low profit, low turnover and generally by definition therefore low problem gambling machines—and I know that that is a general statement. They will transfer into the city, and they will be placed where they can get a higher rate of return.

The higher rate of return is where there is more gambling and by definition, if you believe the problem gambling argument, more problem gambling. So, I think the lifting of the cap will actually transfer machines from low profit, low turnover, low problem gambling areas to higher populated, higher turnover, higher profit and therefore a higher level of problem gambling. That is what I think will happen, so I am not convinced that lifting the $50,000 cap will actually address problem gambling at all. I think it will probably lead to more gambling and more problem gambling.

Where is the evidence presented by anyone that the reduction in the machines has reduced the level of gambling and therefore problem gambling in South Australia? We have reduced the number of machines, but the revenue to the government has basically sustained itself or in fact increased, as I understand it, over a period of time. I am not necessarily convinced that lifting the $50,000 cap is actually going to be a good thing for regional and country hotels. In 10 years there will be those small regional hotels outside the big regional centres and, if the cap is lifted, they will have the democratic, free-market choice, to sell their goods.

There will be profit takers who do that, who have bought in at the low end of the market. The market then opened up, and they will then sell their machine as a profit taker in the high end of the market because their machines may well be worth as much or more than the trading value of the hotel, depending on the number of machines they have. I think that is a concern for those small regional communities, but I accept the fact that the parliament, in this chamber at least, will vote to lift the cap; I think that the parliament in the other chamber will as well, so I suspect that that is where we are heading.

It is unclear to me through the briefings whether we are going to have trading rounds to bring it down only to the previously announced reduction level that the government announced (I think they need to reduce it by roughly another 800 machines to get it to the government's desired level) or whether there will continue after that to be open rounds so that, if people want to sell and there is a further reduction, that is available to the market. If it is a real open market, you would assume they would have regular rounds so that people could sell on a regular basis. If that occurs, of course, the logic is that Coles and Woolworths will end up owning a lot more of our machines than they do currently, and I know that the community will have some interesting views about that.

The other issue is that I am glad that the government has recognised in part my campaign to have a uniform closure of machines. It has put in this bill a provision that if clubs and hotels with gaming entitlements are not signed up to a responsible gambling agreement with an industry-responsible gambling agency, then they have to close between midnight and 10am.

For over two years I had a bill before this house in the last parliament seeking to close all gaming venues (except the casino because of its licensing requirements) between 3am and 9am and, of course, the government flatly refused to vote on it a number of times, always adjourning it because somehow it was such an outrageous idea that we could not possibly even vote on it. Lo and behold, the government in its own bill seeks to close some venues at least for a longer period, so it recognises the principle in my bill was fundamentally right.

However, as the minister might have indicated (but it might have been the shadow minister, so I am not sure who), if you read carefully the second reading speech it says they are closed only if they do not have a responsible gambling agreement with an industry responsible gambling agency. The industry-responsible gambling agency, by pure coincidence, happens to be Club Safe (run by the clubs association) and Gaming Care (run by the Hotels Association). So the two industry groups get to run the responsible gambling programs so, as long as people sign up with them, they can open when they want. I suspect they will all be opening when they want—or, at least, those who wish to trade other hours will all sign up.

I am still of the view, and I have held this view ever since I have been debating poker machines, that the way the government is reducing machines will not reduce problem gambling and will not reduce the volume of gambling. All it is doing through its mechanism, in my view, is taking low-profit, low-turnover machines and putting them in high-profit, high-turnover venues because they will be able to pay the highest price for them. If the government wishes to address problem gambling, I think part of the package (not all) is to close all the venues for a uniform 3am to 9am break and then the problem gambler really has nowhere to go. I have an amendment on the table ready to debate when we get to the committee stage that does that for all venues (except the casino, due to its licensing provisions).

At any time, how will someone who has been trained under the responsible gambling agreement know whether Joe Citizen has been gambling three hours at a venue around the corner when he walks into that venue and gambles for another two hours? How would they actually know that? If someone asked me that, I would suggest they go and get another interest in life. The reality is that people can change venues on a regular basis.

I am not sure how the responsible gambling agency and its groups will monitor that. Are they really going to have a system that says, 'You have gambled three hours here and two hours there and, therefore, you might have a problem: let's sit down and talk about it'? I can understand how they can do it in one venue but I am not sure how they will do it in multi-venues at this point. I know Mr Wilkie has a very expensive solution to that problem, and that is a matter for prime minister Gillard to address as part of her agreement.

The other issue I raise is that I have always found it odd that the hotels that have handed back entitlements as part of the reduction program the government has had in place have been able to then host machines on behalf of Club One into exactly the same venue where the entitlements have been taken out. I am sure that has occurred. I guess the argument is that there is a reduction across the board and therefore that is a gain, but it seems a bit bizarre that a hotel has lost an entitlement and can ultimately host one back through Club One. That is as I understand it.

The other issue I raise is a broader principle in relation to expiation notices. It might be an unusual stance to take, but I do not support the concept of an independent authority setting its own level of expiation notice. The way I understand it, the bill allows the IGA to set penalties at a maximum level of one of three lower levels. I do not know why the parliament is not setting the penalties. We do not allow the Police Commissioner to say, 'Look, this is the range, I'll set the penalty.' We do not allow that; we set the penalties and fines that we want, we set the offences and fines and then it is administered.

I have a letter from the minister to the shadow minister for gambling, Hon. Terry Stephens. The last dot point on the first page states:

The bill will reduce the maximum penalty to $10,000 and include the ability to set expiation fees up to a maximum of $1,200 for provisions of a code of practice. It will allow the IGA to set the penalties at the maximum level of one of three lower levels.

It then goes on to say:

This is appropriate. It allows the IGA to tailor the penalties to specific requirements of the code of practice.

Why is the parliament not setting the penalties as it does with other offences? We do not say to the Police Commissioner, 'Look, you have the right to issue expiation notices, but you decide the level of penalty for the various traffic offences.' We do not do that. The parliament has a say on the level of penalty. We are taking away, and I think we are setting a dangerous precedent by giving an independent authority the power to set its own expiation notice level within a range. The Independent Gambling Authority by its very nature is independent. I assume it is not directable by the minister, so the expiation notices will be set and the parliament will have absolutely no say over it. If any person out there gets a fine, essentially we are powerless to a large degree, and I do not support that principle.

They are the issues that I see with the bill. The bill will get through; I accept that. I advise the house that I do not intend to divide on my particular amendment. The government has made clear its position on trading hours over a number of years, so for those on the non-government benches who might want to express a view about the amendment, feel free, but I will not put the house to the pain of a division on that given that the government has the numbers on that issue. They are my views on this matter and I look forward to the committee.

The Hon. A. KOUTSANTONIS (West Torrens—Minister for Industry and Trade, Minister for Small Business, Minister for Correctional Services, Minister for Gambling) (12:24): I thank all members for their contributions and for the manner in which they made those contributions. It was a helpful and respectful debate. The interesting thing about being gambling minister is that I can be in a room of five people and all five people will have a different view on not only how to help problem gamblers but even on gambling itself. It is a very controversial and emotional issue and it is something that divides our community.

When something is as emotive as gambling, it is very hard to come through the middle and come up with good effective policy. We rely on a lot of bipartisanship in this house when it comes to gambling policy. Quite frankly, gambling policy can be taken hostage. This bill is an example of the parliament coming together in a way that gives some measured, responsible responses to some very pressing issues.

Without wanting specifically to attack him, the member for Davenport has held his views on gambling consistently for a long period of time, and those views on operating hours are consistent. I find it hard to reconcile those views with his views on trading hours for retail workers.

The Hon. I.F. Evans: I can explain that.

The Hon. A. KOUTSANTONIS: I am sure you could, and I am sure that the honourable member will do that in committee. My reasoning is: how could the shadow treasurer argue at the last election that there should be complete 24-hour deregulated trading hours for South Australians, yet wish to legislate compulsory closing for other venues? The argument that the government is making is that, if you have responsible identifiers of problem gamblers who can intervene, the hours of operation do not really matter.

I will just quote the member for Davenport. He said that, if his bill had been passed, problem gamblers would have nowhere to go other than the casino. I think that, while I understand what he is trying to do (and I am not necessarily criticising it), the member for Davenport's hypothetical argument to the parliament is: if someone is walking from one pub to another pub, how could you possibly recognise how long they have been gambling?

Well, how could you possibly recognise how long someone has been gambling if they stopped gambling at 3am (under the member for Davenport's private member's bill), and then they drive into the city and go to the casino? You can't. I think that the member for Davenport recognises that, but I understand his intention. I find it an interesting argument that he has in his own head where he can totally deregulate trading hours for retail workers—he is happy to have retail workers working through the night—but not for people who work in the gambling industry.

The shadow minister, who was the lead speaker for the opposition, asked a number of questions. One question was: how many of the 3,000-machine reduction will be required to go? I am advised that 782 machines are required to reach that 3,000 target. I think that both shadow ministers asked about the trading system. Once the 3,000-machine target is reached, I envisage that there will be continued trading rounds after that in the interests of being a free market economy, as I am sure members opposite would champion.

With respect to the social effects test, I think that, when dealing with the community, a lot of people become frustrated (and when I say 'a lot of people', I am talking about our constituents) with systems of planning and the way in which they work. I think that having the social effects test at the end, after you have received an approval, gives people the idea that there is a sense of inevitability about these approvals. Bringing it forward, I believe, really enfranchises people who wish to make objections.

The good thing about it is that it gives people a chance to get in early to know what work has to be done if they are trying to open a venue somewhere where it might be controversial, and people have a real chance to try to stop it. I think that bringing that forward, rather than going ahead and getting the planning and council approvals and having those stamped off and then going to a social effects test, in some way disenfranchises people, because they feel as if, 'Well, the approvals have already been gained, this is just really a rubber stamp.'

Bringing the social effects test forward, and having the IGA set the parameters for that, makes it a lot more interesting for people who have genuine objections to gambling venues. Obviously, we would like to have the rules and regulations of the land apply everywhere and for there not to be exemptions, such as currently exist at the airport, and I think that is something with which every member of this chamber would agree, as indeed does the commonwealth.

The member for Davenport raised another matter about the Independent Gambling Authority setting its own expiation fees. That pathway was established with the 1999 Productivity Commission. October 2001 was the first occasion, I am advised (but I will double-check this), when we started having codes of practice without ministerial approval. Once we have started down that path it is pretty hard for us to then come back and say, 'But we'll set the fines.' The member for Davenport might disagree—and that is his right—but I think that, once you set down the path of allowing an independent authority to set codes of practice without ministerial input, to then have the parliament set the fines for breaches of those codes would not exactly measure up.

The member for Bragg made some very important points about having technicians seal machines. Machines are monitored daily; if there are any inconsistencies they are picked up almost immediately. I would much prefer to have the commissioner take a risk-based approach to inspections. The idea of having a technician out there watching it being sealed does not really match up with the latest technology; I am advised that we would know if something was going on through our centralised monitoring system, so I do not think that having someone there would make a real difference.

Of course, what we can do is have the risk-based approach, which means that the commissioner can then inspect venues and, if there has been tampering, it would be picked up. I do not see that as being a major issue, but I do understand the member's concerns. I commend the bill to the house. We will go into committee, because the government has an amendment, and there is an amendment from the opposition.

Bill read a second time.

Committee Stage

In committee.

Clauses 1 to 18 passed.

Clause 19.

The Hon. I.F. EVANS: I move:

Page 12, lines 34 to 38 [clause 19, inserted subparagraph (ii)(A)]—

Delete 'there are at least 6 hours in each 24 hour period (which may be a continuous period of 6 hours, or 2 separate periods of 3 hours or 3 separate periods of 2 hours) during which gaming operations cannot be conducted on the premises' and substitute:

gaming operations cannot be conducted on the premises between 3 am and 9 am

This amendment seeks to bring in a uniform closing time between 3am and 9am for venues with gaming entitlements, except the casino, due to its licensing provisions. This will affect all venues but, because the government's provision covers the issue of having a 'responsible gambling agreement with industry responsible gambling agency', this closure would essentially apply to those groups that do have that agreement. I accept the fact that I will not win this particular amendment, but this will be my chance to actually have it voted on after two and a bit years of waiting.

The minister mentioned that he was confused about my position and how I could possibly argue that shops could be open for longer but that gaming venues be closed sooner. Let me walk the minister through it. The reason the government licenses hotels and gaming venues is that there are concerns about social harm, so they license them—

The Hon. A. Koutsantonis: Same as shop trading hours.

The Hon. I.F. EVANS: They don't license, not to the same extent.

The Hon. A. Koutsantonis: So it's like that, is it?

The Hon. I.F. EVANS: Come on. The reality is this: the government's position is that gaming venues can open 24/7, but it is concerned about liquor licensing. The government has just put out a liquor licensing discussion paper suggesting that some of those venues close at 3 o'clock but that shops should close a lot earlier. So, the product that does the least social harm is closed earliest, and the product that does some of the biggest amounts of social harm is fully deregulated. That is the government's position.

If a gaming venue can open 24 hours seven days a week and the staff be able to work there and earn their income, but if a shopkeeper wants to open longer hours and their staff want to work the extra hours and get the dough, or indeed employ more people, the government needs to explain why hotels and gaming venues get to make that choice but shoe shops and butchers shops do not. That is the government's position.

The reason I have a slightly different position on poker machine venues is that I accept that there is an issue with problem gambling, and the government is coming at problem gambling from one angle and I am coming at it from a slightly different angle. I think there is merit in a uniform closure. The government itself has conceded that point by saying that if you do not have one of these industry agreements you are going to have uniform closure.

We could have had a uniform closure for the last two years for a lot of venues, but the government chose not to vote on it—such is politics. One assumes that there are lots of problem gamblers out there who have lost more money than they had to over that two-year period because this government did not have the courage to put it to the vote or, indeed, amend it to a better system, as the offer was made. The government chose not to do that.

A lot of venues already do not trade between 3am and 9am. It tends to be the bigger venues that trade those hours. In fairness to the house, I consulted on the original bill with the Hotels Association, which, surprisingly, opposed it but now supports a longer uniform break. I asked the minister earlier, when I came into the chamber, whether the hotel industry supports all of this bill. The hotel industry does now support all of this bill.

The hotel industry now supports a longer uniform break than I proposed. I welcome the hotel industry association's coming to that conclusion, because it certainly did not support a six-hour closure 18 months to two years ago, but it now supports a 10-hour closure for all those venues that have not signed up to their responsible gaming program or the clubs associations' responsible gaming program. The issue for me is simply that I think there is merit in having a uniform closure. It gives the system a rest.

The minister talks about the casino. I have always acknowledged that that is the one hole in the argument; I accept that. I come from the view that I do not think that the problem gambler is going to get into their car at Port Augusta, Port Lincoln, Mount Gambier or, indeed, Elizabeth, Stirling (where I live) or Noarlunga at 3 o'clock and drive to the casino; some will, but I think very few will. I think that the uniform closure, outside of the casino, will have more of a positive effect than a negative effect.

I accept that there is an argument about the casino and that some people will go there. I understand that, but I think there will be far fewer people who will do that rather than simply walk around the corner to the other venue that is open because, by pure coincidence, the venue that is closing between 2am and 4am, its neighbouring venue, is open at that time and they can walk around the corner and make it far easier to keep gambling. So, I think my model makes it harder for them to keep gambling. It is not a perfect model, but I think it is a model that is worth consideration. I am pleased that the Hotels Association has come on board, even if it is conditional on having an agreement.

I wrote to various church bodies. The Salvation Army supported a uniform closure, preferably between midnight and 6am; the Anglican Church supported a uniform closure between 3am and 9am; and the Catholic Church referred it to one of their committees. That committee is yet to respond, so I think it must have been lost in the process, as my records seem to indicate. As I said, I am not going to divide, but I think the clause has merit.

The Hon. A. KOUTSANTONIS: Obviously, the government opposes this amendment. I will mention to the honourable member that gambling venues must close for six hours during a 24-hour period. So, there is not 24-hour trading, and I apologise if I misled the member. So, they are not open for 24 hours, but his policy remains 24 hours for—

The Hon. I.F. Evans: They can trade for that long.

The Hon. A. KOUTSANTONIS: Yes.

The Hon. I.F. Evans: Shops shut.

The Hon. A. KOUTSANTONIS: Well, they can't trade when they want; they must be closed for six hours. A licensed gambling venue must be closed for six hours. They can choose—

The Hon. I.F. Evans: Of their choosing.

The Hon. A. KOUTSANTONIS: Of their choosing. The opposition policy is that retail trading outlets can be open for 24 hours, seven days a week, and we all know what the answer to that would be if that were passed. So, the government opposes this amendment. The idea that problem gambling occurs only between certain hours of the day—

The Hon. I.F. Evans interjecting:

The Hon. A. KOUTSANTONIS: I am not saying that that is your point. I think we need to look at problem gambling in terms of addiction, and addiction has many faces. I think we really need to understand problem gamblers. We cannot lump them all into one basket and say that they come from a certain socioeconomic area, a certain postcode, a certain type of family or a certain demographic. Addiction has no borders. I think the best way to deal with problem gambling is that, whenever gambling is on offer, we have the appropriate people in place to identify problem gambling.

No system is going to be perfect. Anyone who stands up and says 'I have the perfect solution to problem gambling' is probably lying to you. The truth is that there are a number of responses to problem gambling. There are things that we can do to minimise harm: intervene, make sure that there is supervision, make sure that there is human contact and make sure that access to funds can be regulated in a certain way. We can do all these things as much and as often as we can to try to minimise the problem, but I do not think that common hours of closing is the silver bullet that we are all looking for.

Amendment negatived; clause passed.

Clauses 20 and 21 passed.

Clause 22.

Mr GRIFFITHS: My question relates to the trading that will occur, and I thank the minister for providing the answer that there are some 782 machines still from the—

The Hon. A. Koutsantonis interjecting:

Mr GRIFFITHS: Yes, that are being sought. During my second reading contribution, I mentioned that the minister talked about rounds. How often will these rounds of trading occur, and is there a limit on the number of machines that will be traded for each of those rounds?

The Hon. A. KOUTSANTONIS: The details are still subject to consultation. However, the advice I am receiving is that there will be as many rounds as are needed and that there will be as many machines in a round as people wish. So, if people want to trade as many machines as they can, they can put them all into one round and we will trade them, and we will continue trading. As minister, I expect I will direct the commissioner to start off the first trading round. We generally want this to be a free market exercise with the reduction of one machine per four machines traded until we reach 3,000. So, we have a bit of socialism mixed up with a bit of free capitalism there. Once we reach the reduction, the trading rounds will be available as needed.

Mr GRIFFITHS: That was, I suppose, the basis of my question. If you achieve 500 from the 782 machines in the first round, would you wait six months and let the industry consolidate itself to some degree? I was contemplating what periods would be in between rounds. It might be difficult to answer that.

The Hon. A. KOUTSANTONIS: I think you're right: it is difficult to answer that. I would like to see how the first round goes, but my gut instinct is that there will be a lot of machines traded very quickly, and there will be a lot of demand, especially from smaller clubs of constituents that you and a lot of country members here represent, who are holding onto two or three machines, who want to get rid of those machines, trade them, so that they can spend money on capital infrastructure in their local communities and their clubs. They have been hanging onto them and they will want to trade them as quickly as possible. So I think that once the cap is lifted you will see a lot of trading going on very quickly. I cannot see into the future and give you a concise answer about how it is going to work. It is a free market.

Mr GRIFFITHS: I have another question that stems from this but it relates to the successful removal of one machine for every four that are traded. What happens to that machine? Is it physically removed from the system forevermore, or does it go to Club One, and then is it parked and able to be used in other venues?

The Hon. A. KOUTSANTONIS: If you are from a hotel the gaming machine entitlement is removed forever; if you are from a club the gaming machine entitlement goes to Club One.

Mr VAN HOLST PELLEKAAN: On that issue, just picking up on the member for Goyder's question about the rounds, I am not trying to labour this, but I have a view that it is very important because it will have an impact on the price. If there was a round every single day for a year the prices would actually go down because after a while nobody is that interested. If it only happened once every year that this was an opportunity to sell your machines, prices would be quite high because the opportunity is there until enough venues that are prospective purchasers get their 40 machines. I think it is very important how the rounds might be established because it will have a very direct impact on the value of these entitlements. So, I am not really sure, again, whether you can answer, because I understand it is a difficult question, but I would just like to highlight that it will be critical to the market.

The Hon. A. KOUTSANTONIS: That is still subject to consultation however. There are a couple of points. The first one is that the market will establish what the base price of a machine will be. The market will decide the price, taking into account what someone is prepared to sell it for and what someone is prepared to pay for it. Once we establish a price, people will know when to trade and when not to trade. I think that my setting out a structure—there will be trading periods from this period to this period to this period—may stifle that market. My approach will be to open it up for an initial round of trading, see what happens, and we will make considered decisions after that.

Ms CHAPMAN: I have a question about the Australian government land at Parafield and the 40 machines that operate in an outlet there. I am happy to have an answer on this clause or in some other place, but my understanding of the second reading explanation is that the minister indicated that he will bring them into the regulatory regime, although he cannot capture them for taxation purposes because this is an enterprise which is operating on federal territory—I may be wrong on that, but that is my understanding—and that they are now going to be within the regulatory regime. Do I understand then that they have not yet been subject to this buyback process, that they do not have any obligation to diminish their number of poker machines? That is my first question.

The Hon. A. KOUTSANTONIS: Currently, the Roulettes Tavern has 40 machines. They have not been part of the reduction. We are in constant negotiation with the commonwealth. I suspect that since the federal election the commonwealth is more amenable to negotiations about poker machines and regulation. What I am most concerned about at those two sites is not necessarily the number of machines, although that is important, but regulations and responsible gambling intervention matters. I am very keen to negotiate with the commonwealth to give me the power to go in and say, 'Actually, this is what is required for you to operate in South Australia.' I am advised the commonwealth is very keen to work with us on that. That is what we are trying to do. I am more interested in them providing responsible gambling, the same way as is provided everywhere else in the state.

Ms CHAPMAN: During the last three years, minister, are you aware of any activity, program or procedure that has operated in respect of those 40 poker machines which is inconsistent with the current standards that are imposed? If so, what are they?

The Hon. A. KOUTSANTONIS: Our standards do not apply because it is federal land. That is what we are trying to do here today.

Ms CHAPMAN: Are you aware of any?

The Hon. A. KOUTSANTONIS: I am advised now that we are not aware of anything, but our standards do not apply, so it is a bit hard for us to find out if there has been a breach.

Ms CHAPMAN: Have you received any submission in the last three years from the Hon. Nick Xenophon, a senator for this state, who is part of the federal parliament, in respect of the operation of these machines?

The Hon. A. KOUTSANTONIS: Nick is not someone who is going to die of shyness; he makes his views very well known through the federal parliament and he has spoken to me on many occasions about the issues of problem gambling.

Ms CHAPMAN: I am talking about these 40 machines.

The Hon. A. KOUTSANTONIS: I have a recollection of a conversation with Nick about it. I do not have all the details here with me and I do not want to mislead you or the committee on it, so I would have to refer to my notes back at the office. I would imagine that Senator Xenophon, without trying to put words into his mouth, would be just as concerned as you and I would be about these machines.

Clause passed.

Clauses 23 to 35 passed.

Clause 36.

Mr GRIFFITHS: I refer to new section 47A(2), which talks about an offence of selling or supplying gaming machines, components or equipment without an approved contract or, indeed, with inducement. In proposed subsection (2) the bill refers to a maximum penalty of $35,000 or imprisonment for two years if a gaming machine dealer provides some form of inducement other than a discount. Why have you decided to introduce that? I find that rather interesting. If a gaming machine producer decides to offer a special a trip to New York as part of buying a certain number of machines, which was the example provided to me, that, in effect, is not a discount, but it would be an offence and a penalty of $35,000 would apply.

The Hon. A. KOUTSANTONIS: I am advised that we do not want one gaming machine manufacturer to dominate the South Australian market with one type of machine. We would like there to be as few inducements as possible so that people can buy on the merits of the business case rather than a free trip to New York which, quite frankly, I think would be in breach of our procurement policies as well.

Mr GRIFFITHS: Minister, I was providing that as an example off the top of my head, but it could be any form of inducement and that is just it. I can understand the fact that you want to ensure that there is a level of openness so that everybody truly understands the value attached to that machine.

The Hon. A. KOUTSANTONIS: No monopolies.

Mr GRIFFITHS: Yes. However, it seems to me that through history enterprise has provided an opportunity for some level of support in other ways to exist for people who are in business, too. In this case it appears as though you have decided to target one particular industry and to take away that opportunity where, in the interest of an efficient business, that may indeed produce the most value for money machine, but still decide to offer some level of inducement not to just a person (as you have identified here) but perhaps a club where it is a prize that could be raffled, for instance, again, that is an inducement which provides a wider benefit to that club or association and you have taken away that opportunity with this bill.

The Hon. A. KOUTSANTONIS: I am advised that, when gaming machines were first introduced, the role of the procurement board was to stop these forms of inducements. I would like to see inducements in this industry eliminated. It might be an ideological argument that we could have about whether or not it is appropriate for me to say, 'If you buy my five machines I'll throw in two first-class tickets for you and your wife to wherever.'

Mr Griffiths: I'd say no.

The Hon. A. KOUTSANTONIS: Of course you would say no and I would say no, but I am not sure about others. I think that type of inducement in this industry can be dangerous. I think it is best that we ensure that that type of inducement is stamped out completely.

Progress reported; committee to sit again.

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