Point of Consumption tax impacting regional racing

Monday May 20, 2019

Published by Member for Mount Gambier Troy Bell MP

A contentious betting operations tax is impacting the future of South Australia’s regional racing industry, says Mount Gambier MP Troy Bell.

The Point of Consumption (POC) tax, which was introduced in 2017, was designed to generate revenue from online gambling, with the tax payable in the state where the bet was placed.

South Australia’s 15 per cent rate is among the equal highest in Australia but the Independent MP said unlike other states, the revenue is not being reinvested back into the industry.

In a speech to State Parliament last week, Mr Bell outlined the implications on the state’s racing industry.

“The POC tax means there is now far less incentive for bookmakers to promote South Australian races and less money bet on events means less revenue and less prizemoney for those races,” Mr Bell said.

“In racing, prizemoney pays wages and so less prizemoney means job cuts.”

“The fact leading trainers are packing up and moving operations interstate should be a real wake-up call to the State Government.”

Last year, Thoroughbred Racing SA was forced to cut $2.25million in budgeted spending, affecting infrastructure grants and prizemoney at clubs across the state.

“This tax is already having major implications for clubs in Naracoorte and Penola, who were forced to put major irrigation projects on hold,” Mr Bell said.

“Mount Gambier Racing Club General Manager Brett Watson has described the current situation to me as ‘unsustainable’ and that’s a real worry.”

The State Government generates around $16 million annually from the tax.

Mr Bell said the State Government might not have introduced the tax, which was introduced by the former Labor Government in 2017, but they can be “part of the solution”.

“If the Marshall State Government lowered the tax rate to 10 per cent – the same as New South Wales and Victoria, it would bring South Australia on a level playing field,” he said.

“However, they can also go further and redirect a percentage of this tax back into the industry.

“In Western Australia, 30 per cent of their POC tax is invested back into the industry, in Victoria, nearly 19 per cent goes back in.

“This is money generated by the racing industry. It deserves to be invested back into the racing industry.”

Mr Bell said this month’s Gold Cup Carnival had highlighted the importance of regional racing to local communities. 

“The recent Gold Cup Carnival is a great example of country racing at its best,” he said.

“The flow on effect from the Gold Cup carnival alone supports trainers, jockeys, local hoteliers and caterers, hospitality staff, transport, accommodations and fashion businesses, among others.

“Racing is more than just a sport – it’s an industry which supports the full-time employment of more than 3600 people and generates $400 million every year in economic benefits for South Australia.

“This is an issue which has major implications for the future of our regional racing clubs.”