Page 2448 - Week 08 - Wednesday, 13 August 2014
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Furthermore, it has been a major objective of the government to ensure that the local racing industry is not negatively affected by the sale. As such, the government is intent on providing the current level of funding in support of the ACT racing industry that was identified in the 2014 budget.
It should also not be forgotten that Tabcorp has agreed to increase the annual sponsorship funding for the industry by $100,000. Tabcorp is also intent on actively promoting the local racing events industry by providing improved marketing, including increased radio and television coverage.
It is also relevant to note that the racing industry in smaller jurisdictions in Australia tends to be budget funded, whereas the majority of industry funding in the larger states is derived from commercial agreements with local totalisator licence holders. These differences in the primary sources of funding simply reflect the reality of the situation between large and small jurisdictions.
The turnover generated by the local racing industry in Victoria, New South Wales and Queensland is a major profit driver for the company that holds the totalisator licence in those states. Due to its small scale, the ACT racing industry, on the other hand, has limited impact on ACTTAB’s profitability as it only generates about two per cent of the business’s total racing turnover. So it is almost negligible, Madam Deputy Speaker.
This funding cap was highlighted in the PwC ACTTAB feasibility study, which identified an annual funding shortfall of about $5 million per year in ACTTAB payments to government compared with the level of budget funding paid to the industry. Let me repeat that: a $5 million per year gap. This means it would have been very difficult to present ACTTAB as an attractive investment opportunity if direct funding to the racing industry by the new owner had been a mandatory condition of sale.
While the industry, I understand, has expressed some disappointment at the outcome of the sale, let me be clear that the government remains committed to providing appropriate assistance to the local racing industry, with the current level of budget funding at its highest level ever.
Let us again remind people: that is more than $8 million a year that goes from taxpayers to our racing industry, one of the most generous subsidies for any industry in this city. I consider the ACTTAB sale provides a positive outcome for the territory, and meets the sale objectives that I outlined at the beginning of the process. Let me repeat that: it provides a positive outcome for the territory, and meets the sale objectives that we outlined.
The sale has been conducted appropriately, and, importantly, in accordance with proper probity requirements. With respect to those probity requirements, we have sought advice on those and ensured that the process has met those requirements. At times that has meant that some people who wanted to know things before everyone else could not be told, for those probity reasons. Most importantly, in relation to the announcement on the day and the impact on share prices, if some people had known before that time, that would have been a serious breach of probity.
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