Page 4607 - Week 15 - Tuesday, 6 December 1994
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That is a simple run-down on the nature of the junket business. What it means is that to enable the casino to increase its turnover we have to give them a tax break on this additional business. At first glance one would say, "That is a bit odd. Should we do it and, if we should, why should we?". I do not believe that the Government thought it through. It could not have done so, given the time that it took to respond to the casino's proposal. But we have done so. We have looked at all of the considerations and we believe that there is an argument, a marginal argument, that could sustain a government allowing a concessional tax rate for this additional business. So, in principle, we are going to go along with the Government's proposal; we are not going to oppose it. But I think we need to sound a warning.
First of all, the whole process seems to us to be a bit marginal, and I will tell you why. The implication behind all of this is that if we give the casino this 10 per cent tax rate, as opposed to the 27 per cent that they currently pay on all of their business - and that is a basic flat rate of 20 per cent plus a supertax of 7 per cent that will reduce over the next two to three years - they will turn over sufficient money to pay an additional sum of approximately $2m a year into the ACT coffers. That is predicated on some kind of implicit belief that all of these high rollers are going to be coming from Singapore, Hong Kong and such places; but there is nothing in this Bill or anywhere else to suggest that the high rollers who come to Canberra and play at our gaming tables - and on whose business the casino is to pay a tax rate of 10 per cent - will not come from Sydney. There is nothing to say that they do not already come from Sydney and that the business they generate attracts a tax of 27 per cent. Potentially, we are allowing the casino to bring the same gamblers to Canberra, produce the same turnover and pay only a 10 per cent rate on that business. That is the flaw in the argument.
I have said that, in principle, we are going to support the Bill. We are going to give the Government and the casino an opportunity to prove that their proposition is a rational one and a valid one, although we recognise that there are pitfalls that perhaps the Government has not recognised. Of course, one of those pitfalls - which the Government may have recognised, because the Chief Minister made reference to it in her tabling speech - is that when these high rollers come to town they are just as likely to inflict a huge loss on the casino as to allow the casino to make a huge profit. The consequences of that on the revenues of the casino and, in turn, on the revenues to the Territory have yet to be tested. There are some very real questions that we believe need to be answered.
I have said that we will go along with this, with real reservations. One of the reservations that I have - and I wonder whether the Government took the trouble to do what we did - flows from the tax rate that junket casino operators pay elsewhere. When a casino comes to the Government and says, "We are paying you 27 per cent tax on normal business and we want you to give us a 10 per cent rate on this additional junket business", one would immediately assume that other casinos throughout Australia are offering the same concession. In fact, they are not. I got this information from the casino; I did not ask anybody else. I asked the casino what rate is paid at other casinos throughout Australia. Interestingly enough, they say that the rates at Cairns and Townsville are 11 per cent. But, in fact, there is no casino in Cairns yet. So, what they are saying is that the Queensland Government is expecting the Cairns casino to pay 11 per cent on junket business if and when it is up and operating. It does not operate yet. That is a rather fanciful argument, because that casino does not exist.
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