***STRICTLY EMBARGOED UNTIL 6PM, WEDNESDAY 22 JULY***
The Hodgman Liberal Government is committed to fixing the budget mess and investing in frontline services. We are committed to getting our priorities right and we are committed to doing what’s in the best interests of the Tasmanian community.
In addition to this, the Government is also a key supporter of important industries, like the racing industry.
For some time, I have been working with Tasracing and industry representatives about how we can put this industry onto a sustainable footing for the future.
I have reaffirmed the Government’s commitment to maintaining the current level of support and honouring the deed that is in place with the industry. We will ensure that racing gets the level of funding that they have been promised. There will be no reduction in Government funding for racing.
However, the Government is determined to manage the budget and apply strict fiscal discipline, and that applies to our support for racing too.
I know that some in the industry will be disappointed to learn that the Government has decided not to increase the taxpayer’s existing $30 million contribution to the racing industry, but I believe the community will understand and appreciate why I have made that decision.
I know that the racing industry faces budget challenges, just like many other areas that the Government is responsible for funding, but the Government simply cannot agree to divert more funding away from areas like health, education and public safety to give to the racing industry.
In the 2014-15 financial year, of the $29.2 million in government funding, Tasracing was required to commit almost $24 million to stakes alone. Tasracing has a structural funding gap of between $3-$5 million. The previous Government knew this, but failed to act, instead relying on band-aid measures which has meant the company cannot invest in infrastructure or growing the racing industry. We need to take action now.
Today the Government has announced a package of measures which will ensure the sustainability of Tasracing and the wider industry.
This includes:
The Tasmanian Racing Industry Working Group’s recommendations were presented to me late last year in a confidential report. The Working Group did not recommend a reduction in stakes, however the Government has been clear that we cannot allocate extra money to Tasracing’s Funding Deed. The Working Group, however, recommended other sustainability solutions which the Government is acting on:
Working Group Recommendation | Tasmanian Government Action |
1. Tasmanian Government to amend legislation to: a) Transfer Tasracing’s obligations relating to work cover costs for racing and training facilities which it does not control to those parties which control or manage such facilities. b) Allow Tasracing commercial control over product fees decisions under race fields legislation. | The Government is investigating options to achieve this. The Government has already introduced legislation that gave greater commercial control over race field fees. This was passed last year. |
2) With respect to existing Tasracing borrowings from Tasmanian Government facilities, which primarily relate to decisions taken after the sale of TOTE and creation of Tasracing: a) The Government to forgive current borrowings to enable their removal from Tasracing’s balance sheet. OR b) The Government to continue in perpetuity current arrangements where it meets the annual repayment and interest costs associated with such borrowings. | The Government is continuing to cover Tasracing’s debt for a further two years. The company wants to take on the debt repayments once sustainability has been achieved, in order to be able to access future loan funding for major infrastructure works. |
3) The Government to consider the creation of a Tasmanian Racing Industry Capital Fund for essential capital expenditure, from unclaimed dividends, based upon interstate precedents (in particular Victoria). | The Government has today announced a $250,000 allocation to racing industry capital works representing unclaimed dividends. This will mean important community infrastructure is upgraded. |
4) The Government to commit to providing Tasracing with dispensation from the requirement to meet the Government’s annual 1% efficiency dividend (the Funding Deed increases at CPI minus 1%). | The Government will not increase taxpayer funding under the Funding Deed. |
5) The current requirement for Tasracing to expend budgeted prize money in the year of its allocation to be removed, including prize money from cancelled races and race meetings in any year that is not spent. | The Government has today announced that it will amend the Funding Deed to allow Tasracing to roll over un-won prize money into future years. |
6) An independent review be conducted into the operation of all Tasracing controlled racing and training facilities including Tasracing race day commitments. The primary focus of the review should be on staff cost efficiencies and may require work value assessments. | The Government is considering this recommendation. |
7) Tasracing’s responsibility for funding retirement benefits for past TOTE employees who are no longer employed by the racing industry should be removed. Such responsibility should have been accounted for with the sale of TOTE. | The Government is considering this recommendation. |
8) Tasracing must focus upon growing participation as a key plank in working to achieve a sustainable racing industry. | The Government has discussed this recommendation with Tasracing. Today’s sustainability package will allow Tasracing to reinvest in growing the industry. |
9) A proportion of race field fee revenue should be strategically invested in the future of the Tasmanian racing industry. At present due to current funding arrangements, Tasracing is forced to utilise much of this valuable revenue stream for operational rather than strategic initiatives to grow the racing industry. | The Government has discussed this recommendation with Tasracing. Today’s sustainability package will allow Tasracing to reinvest in growing the industry. |
10) Consideration should be given to reviewing the governance structure of Tasracing with a focus on identifying the most appropriate model to accord with the size and scope of the Tasmanian racing industry. Alternatives considered by the Working Group included moving to a smaller, fully independent board supported by three Code Strategic Committees. | The Government is considering this recommendation. |
11) The racing industry must be able to source additional ongoing revenue/grants to ensure its sustainability. | The Government has allocated $250,000 to racing industry capital expenditure, representing unclaimed dividends, but no further monies will be allocated to the Funding Deed. |
12) The Government must commit future Governments to fund the Tasmanian racing industry beyond the 2029 expiry of the current Funding Deed. | The future of the Funding Deed will be a matter for the Government of 2028-29. |
Financial sustainability is essential to Tasracing. It will allow the company to operate with a long term view as to what changes are required within the industry for it to grow and prosper. It will ensure that track assets are maintained to a high standard and that appropriate strategic investments are made in new infrastructure. While a reset of prize money and industry funding will result in an adjustment for the industry in the short term, in the long term it will provide confidence and certainty, and comfort in the fact that the industry has its future in its own hands.
I have complete confidence that Tasracing, in consultation with the broader racing community, will create a sustainable industry that will continue to grow into the future.