Call on casino tax a chance to put the conspiracy claims to rest
Rule out different tax for pub and casino machines, says James Boyce
THE Tasmanian Government has always denied that its poker machine policy was written by the poker machine industry. Apparently it is was just a coincidence that the Liberal plan almost exactly replicated the proposal put by the industry to the parliamentary inquiry last year — even down to the tax rate to be paid on hotel poker machines.
There is, however, one matter still to be clarified that could prove so-called conspiracy theorists like me wrong.
There remains a final chance for the Government to prove that it has not been bought by the men who largely funded their election campaign.
And given that up to $20 million of public revenue a year is involved, year in and year out, it is a test case that concerns us all.
Casino poker machines have historically accounted for close to half of poker machine expenditure in our state. Nowhere else in the country have casinos been so comprehensively transformed into pokie barns.
The profit on these machines is even higher than pub pokies due to economies of scale and the more lax regulation applying in casinos. For a quarter of a century, casino pokies have provided the secure cash bonanza for the Federal Group on which the generous dividends paid to the company’s private owners have relied.
When public debate on pokies erupted in late 2015, the half-dozen big hotel chains that own most of the hotels with poker machines began to push for a higher share of the profits.
A rare difference of opinion among the pokie barons was on display as the Federal Group fought to keep its exclusive ownership rights after their current contract expired.
In the deal that ended this spat (brokered by Paul Lennon), the Federal Group agreed to give up its monopoly in return for paying lower taxes on casino pokies.
This proposal was justified on the ground that the taxes paid on casino poker machines need to be competitive with those paid in Townsville and Cairns — which have the lowest taxed casino poker machines in the country. This joint industry position was set out in a late submission to the parliamentary inquiry and can be read online.
When the Liberal Party adopted the industry plan as its pokies policy it reserved judgment on this issue alone.
The party position was that
the level of taxes paid on casino pokies would be decided after the election. Disturbingly, however, the policy did make reference to considering the level of tax paid in other regional casinos, and the Treasurer, Mr Gutwein, steadfastly refused to rule out lower casino tax rates during the campaign. Nor has he done so since.
On the evidence that is currently available, it appears that the Liberal Party has given in-principle support to forego millions of dollars a year in public revenue by having (for the first time in Tasmania) a differential tax rate between poker machines in hotels and those in casinos.
Given the lower costs applying to the latter, there can be no reason for such a sell-out other than that the Government is fulfilling its side of a bargain.
No doubt the deal will be sold in terms of job and investment. But while it is true that the casino is well overdue for refurbishment (and indeed a plan to deliver this has already been announced), this should be funded by its wealthy owners, not the public purse. And the proposition that poker machine players will be lost to North Queensland if we don’t have a competitive tax rate is surely too ludicrous to even begin to engage with.
It is up to the Premier, Mr Hodgman, to restore trust in his government by putting the conspiracy claims to rest. All he needs to do to prove that his government’s poker machine policy was not totally written by the pokie barons is to immediately rule out having a different tax rate apply to hotel and casino poker machines. Tasmania has never had such a differential before.