New deal now or we all take a hit

ONE of the strangest aspects about last year’s state election was that despite the issue of poker machines being centrestage, almost no attention was given to the Liberals’ pokies policy.

While there was a focus on the Labor plan to restrict pokies to casinos from 2023, there was almost no public discussion of the equally radical government reform plan.

With the Liberals set to introduce legislation this year, this needs to change.

Recently released Cabinet Papers from 1993 reveal that the Groom Government decided on a single statewide poker machine licence because it would ensure superprofits stayed in public hands.

The licence was meant to be owned by a state enterprise or go to tender.

However, after a PR campaign waged by Federal Hotels in which they threatened to close the casinos, the government gave the licence to the company for free.

Taxes were set at the rate the company had proposed in an earlier submission.

This costly decision was replicated by the Bacon government in 2003 when the licence was extended to 2023 with only minimal increases in tax.

Under Rene Hidding and then Will Hodgman as opposition leader, the Liberal Party was critical of this public subsidy of the Federal Group and pledged their support for an open tender when the poker machine licence expired.

Unsurprisingly, Treasury continued to make it clear that an open tender was their preferred model.

By 2015 the Liberal leadership had changed its mind. In September the government was ready to sign a new contract with the Federal Group.

Only after David Walsh opened public debate on the issue did there seem to be a real chance that the forgone revenue would finally be returned to the public purse through a tender process.

At the same time, the big hotel chains also took advantage of the hiatus to push for a larger share of the pokie pie through receiving their own pokie licences.

The Federal Group now faced the biggest risk to its state subsidy in 30 years.

The result was that in the early spring of 2018, their paid lobbyist, Paul Lennon, brokered a deal with the big hotel chains.

The terms of this deal are publicly available because they formed the basis of a joint submission to a parliamentary inquiry.

The industry proposal was for the Government to provide new poker machine hotel licences for free to all venues that had pokies, slash taxes on casino pokies to 10 per cent to ensure that the Federal Group was a winner too, and increase taxes on hotel pokies so that the government would supposedly not lose revenue as a result.

Early last year, this plan was carbon copied by the Liberal Party (even down to the tax rate) to form their election policy.

The one caveat was that the party only promised to negotiate on the casino tax issue.

More than $19 million a year in public revenue will be lost if the casino poker machine tax is set at the rate proposed by the Federal Group instead of the level proposed for hotels.

The hit to the budget will be almost as large as the extra 1 per cent pay rise for public servants that the Premier says would have dire implications.

If Mr Hodgman wants Tasmanians to believe his assurances that the pokie industry dollars flowing into Liberal Party coffers had no policy impact, he must rule out any tax advantage for the lower cost, higher profit and less regulated casino pokies now.

The Government must also respect the advice of the independent regulator.

The Tasmanian Liquor and Gaming Commission has publicly stated that a move to direct licencing will add to

More than $19 million a year in public revenue will be lost if the casino poker machine tax is set at the rate proposed by the Federal Group instead of the level proposed for hotels

regulatory costs and increase social harm by encouraging competition between venues.

They should also listen to Treasury, which has been consistent on this issue for decades — the best option for Tasmania is a single licence put out to tender.

Giving away scores of highly valuable new licences without even a token attempt to assess their value is not responsible public policy. It is a handout.

The Liberal plan manages to both increase social harm and hit public revenues.

It is supported by no one outside of the powerful pokie lobby.

Like the party’s gun law policy, it must be abandoned now.

We have time to get poker machine policy right because the status quo remains in place until the necessary five years’ notice on the current contract is given.

The Government can still listen to the experts, the regulator and Treasury, and go back to the drawing board.

The polls have consistently shown that most people never wanted pokies in pubs.

This debate will continue but surely no one would dispute that if we are to have pokies in our communities, public revenue should be maximised and social harm minimised.

Given that every Tasmanian will be living with the impacts of the Government’s policy until at least 2043, implementing a transparent policy process that puts the public good first should not be too much to ask.