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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2010-09-28 Daily Xml
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GAMING MACHINES (MISCELLANEOUS) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 14 September 2010.)

The Hon. T.J. STEPHENS (16:27): I rise as the lead speaker for the Liberal Party on this bill, and I thank my colleagues in the other place who have made a contribution to this measure. I especially thank the member for Goyder, who was responsible for the carriage of this bill in the other place.

Mr President, as you would be aware, gambling matters are matters of conscience for the Liberal Party, and I am sure that my colleagues will make their own contribution as they see fit. At the outset, I point out to the council that I have a small interest in the freehold of a hotel in country South Australia, as does my colleague the Hon. David Ridgway. I do not want it said that we have not declared our minor interest right from the start. That being said, in my opinion, one or two parts of this bill are less than ideal, and I will address these further in my contribution; but the majority of the bill I intend to support.

On 23 June 2010, the Australian government released a Productivity Commission report on gambling. At that time, work and consultation on this particular bill was evidently quite advanced. The government took the decision that further consideration of the bill should be deferred until after the Productivity Commission had released its final report. The bill has now been assessed against the Productivity Commission report and is considered to be consistent with the commission's recommendations regarding strengthening consultation processes and the incorporation of stakeholder views into policy development processes.

The government believes that there is no reason to further delay or fundamentally change the bill, a bill which is well understood by industry and the concerned sector. However, it must be said that the gambling industry faces interesting times due to the Prime Minister's recent deal on gambling reform with Independent Tasmanian MP Andrew Wilkie. That deal, to lock in the MP's support in the federal parliament and thus help federal Labor to cling on to power, means that the industry faces a significant shake-up in regard to gambling reform. Perhaps this bill should have been delayed to see what happens first in the federal parliament.

Essentially, through this contract, Mr Wilkie's views on gambling will be imposed on the states. If the states do not agree, the federal government will be required to legislate to override the views of the states. So, we certainly have some interesting times to come. This bill seeks to create better responsible gambling environments and reduce costs and risk associated with regulation, as well as making some administrative improvements.

The first of the proposed measures to create better responsible gambling environments is a proposal to remove the fixed price of $50,000 on electronic gaming machine entitlements. This fixed price was identified by the Independent Gambling Authority as a primary reason why the trading system has failed to achieve the target of a reduction in gaming machine entitlements by 3,000. Let us not beat around the bush: the trading system the Rann government introduced in its first term has been an utter failure. I do commend the plan to remove the fixed price on gaming machine entitlements, and I believe it will encourage smaller venues with just a handful of machines to exit the market by selling their gaming machine entitlements.

Since the trading scheme was introduced there has been a change of thinking, and most people with an understanding of gambling issues think that reducing the number of actual gaming venues will have a greater impact than reducing the number of gaming machines in the market. The apparent aim of the trading scheme was to reduce gambling opportunities by reducing the number of machines, so I do not know whether anyone still believes that this by itself is still a worthwhile objective. If a publican with 20 machines removes his two worst performing machines, are we any better off? I sincerely doubt it.

It is my strong personal view that it is far better to have a smaller number of large venues with gaming machines. These venues are better staffed and resourced to implement responsible gambling measures. Venues with just a handful of machines selling their entitlements should result in fewer people being provided the opportunity to simply gamble out of convenience at a smaller local venue. I encourage members who are not convinced about this idea to go and speak with people in the concern sector such as Mark Henley from UnitingCare Wesley.

The member for Stuart flagged on behalf of his regional constituents concerns about some of the negative possibilities for smaller venues in removing the cap, and I commend him for so doing but, as he also said, it is appropriate to do this now and allow the market to determine how this will play out. As supporters of free enterprise we naturally support the removal of the cap. Let us remember that these smaller venues will not be forced to exit the market, but I think some will take up that opportunity due the removal of the cap.

The bill also formally recognises the work of the IGA, Clubs SA and the Australian Hotels Association in creating the Club Safe and Gaming Care responsible gambling agencies. The IGA, through its recently released codes of practice, created incentives for gaming venues to participate in Club Safe or Gaming Care. I commend the work that these responsible gambling agencies are carrying out within the industry.

The bill also proposes to reinforce the incentives created in the IGA's new codes of practice by imposing longer closing hours on those gaming venues that do not have a responsible gambling agreement with an industry responsible gambling agency. Those particular venues will be required to close from midnight to 10am on weekdays and between 2am and 10am on weekends. For those venues that sign up to a responsible gambling agreement and have late trading, it is proposed that obligations for training, referrals to gambling help services and restrictions on the use of automatic coin machines be imposed during late trading.

The bill provides a mechanism to extend responsible gambling regulation to venues located on airport land controlled by the Australian government, such as Roulettes Bar at Parafield Airport. This type of venue pays no tax on its machines to the state government, but this measure will allow responsible gaming rules to be enacted at such venues, and I support this initiative. The bill responds to concerns that some clubs have had over the provisions that allow the transfer of gaming machine entitlements to facilitate club mergers or amalgamations. It is a minor change that allows the club to demerge if the objectives of the merger are not met. This is a commonsense move and I commend it.

The bill will also seek to strengthen compliance and enforcement provisions. The draft bill proposed a relatively complicated system of civil penalties. Given the submissions received from the industry and advice from the commissioner, the bill has adopted a clearer and simpler system of expiation notices for minor offences. The approach adopted is broadly consistent with the Liquor Licensing Act, which is also administered by the commissioner. Whilst I am supportive of a simpler system of expiation notices, I am opposed to the creation of a new offence detailed in clause 36 of this bill. This is about the creation of a new offence for gaming machine dealers who offer any form of inducement to a person to enter into a contract for the sale or supply of a gaming machine, gaming machine component or gaming equipment.

Further, part of clause 28 of the bill seeks to give the commissioner the discretion to refuse a form of contract if, in his opinion, there are inducements on offer from a gaming machine dealer. As a former retailer, I would not support the government interfering with a transaction between a gaming machine dealer and a private business. The industry is already heavily regulated, and I think this step goes too far. I see no reason for government to intervene in these transactions. I have read the debate that took place in the other place, and my colleagues there, as much as they tried, could not get the minister to see their side of the argument. As the member for Stuart stated in his contribution:

Why is this industry different from other licensed industries, such as building or car dealerships, liquor licensees, GPs, surgeons, all that sort of thing, where these types of inducements, all above board, are very often in place with regard to purchasing? Why is this industry different from those? If the purchasers of gaming machines are all above board and doing what they are meant to do, and if the sellers of gaming machines are all above board and doing what they are meant to do, what is the problem with inducements?

I say to the minister, what on earth is wrong with a hotelier or pub licensee getting a discount? This is not the public sector. We are talking about individuals and private companies engaging in run-of-the-mill commercial arrangements. If a local football club can get a discount for purchasing five machines instead of four, I say good luck to them. If a city pub is owned by an individual and the vendor offers him a round of golf or tickets to the football finals as an inducement, the publican should be free to make up his or her own mind about that.

Private sector operators are not accountable to the taxpayer for the financial decisions they make. They should be entitled to accept an offer or reject it based on their own self-interest. There are several manufacturers selling gaming machines in South Australia. They compete on price, they compete on quality, and they compete on service levels. If an inducement has sweetened the deal, then so be it. Who is hurt here? What interest is the minister trying to protect? What ill does this new regulation seek to cure? I do not believe that it is the place of government to prevent business from doing business.

It is time for the Rann government to get out of the face of South Australian business. This part of the bill is a good example of the overbearing, nanny state approach taken by this government, and I find it disappointing, to say the least. Clearly, the minister and this government have made up their mind on this issue, however, so I just place on the record that I am opposed to it.

Under the same clause, the commissioner is required to approve contracts to purchase gaming machines. If both the vendor and the purchaser in this arrangement have already been approved by the commissioner and if individual gaming machines cannot be purchased unless they have been approved by the commissioner, then I cannot understand why the commissioner, additionally, needs to be involved in approving every contract for the purchase of gaming machines.

This seems to me to be another case of unnecessary Rann government red tape. What needs to be understood here is that these are transactions between private companies and individuals. We are no longer talking about transactions conducted by the State Procurement Board. Taxpayers' dollars are not in play. Contracts entered into by the private sector do not need the belt and braces approach taken by the public sector. Section 39 appears to over-regulate what should be a private matter between risk-taking individuals.

As a Liberal, I believe that individuals and firms should, as far as possible, be allowed to make business decisions, to be entrepreneurial and to take risks. Allowing markets to operate freely is the surest way to economic success. Requiring government approval of all contracts is going too far. Perhaps a less heavy-handed approach would be for purchasers or vendors to provide the commissioner with notice of each transaction. The Office of the Liquor and Gambling Commissioner could then review each transaction at its leisure. If there are any concerns, these can be dealt with.

Before I conclude my remarks, I also want to place on the record my thoughts on the government's Gamblers Rehabilitation Fund. I think that, while we are discussing a bill about responsible gambling measures, it is timely to discuss this fund. Since taking on the shadow gambling portfolio, I have received zero positive feedback about this fund, its transparency and how the funds are allocated. My understanding is that the Casino contributes over $100,000 per annum to the fund and hotels and clubs contribute around $2 million collectively each year—a significant amount.

These are funds which should be spent directly on harm-minimisation initiatives and frontline services. Yet it is my understanding that half of the Gamblers Rehabilitation Fund basically goes into public servants' salaries. It is my firm view that the responsibility for allocating these funds should be removed from the Department for Families and Communities and its problem gambling service and we should investigate ways of allocating the funds in a more transparent way.

In New Zealand, the government and gambling industry all contribute to a charitable trust that provides funds for gambling counselling. I refer to the website: http://www.woodlandstrust.co.nz. Trustees meet from time to time to distribute the funds in accordance with the constitution of the trust. Administration and overhead costs are therefore very low. I am currently looking into different models for allocating funds to help problem gamblers as I am certain that it can be done better.

Having made these comments and criticisms, there is certainly a wide range of common sense and practical measures contained within the bill, and that is why it will get my support. I have discussed the bill with the AHA and its gaming care division as well as with representatives from the hospitality industry and the Adelaide Casino. My office has also been in contact with Mr Mark Henley from Uniting Care Wesley.

As shadow minister for gambling, I would like to thank all the stakeholders for their work and input. In particular, Mr Matt Halliwell from my office has put countless hours into preparation for this bill, and I must give him credit where credit is due. Also I would like to thank the minister for arranging briefings for me and my colleagues who are of course interested in the bill, and I look forward to its progress.

Debate adjourned on motion of Hon. I.K. Hunter.

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