Don’t compensate a company that’s never paid a cent for pokies licence Paid a cent for pokies licence

James Boyce reveals the state government is legislating to pay Federal Group a special public subsidy for the pokies

IN the next few months, new poker machine legislation will come before parliament — it includes provisions to ensure, for the first time in Tasmanian history, the rate of tax on casino poker machines will be set lower than that of hotels.

Given that pokies in casinos are the most profitable machines — due to more relaxed regulation, economies of scale and longer opening hours — there is no rational reason why this lower rate of tax should be introduced.

This public subsidy sits very awkwardly with the fact millions of dollars funding was poured into Liberal Party coffers in the 2018 election campaign by the pokies lobby.

The Premier claims he has a mandate for the pokies bill because the Liberals took their policy to the 2018 election.

But while the Liberals did outline the proposed tax rate for hotels, they did not do the same for casinos. Tasmanians have not been told about the imminent tax concessions — before, during or since the election.

What we know is that a tax differential on casino pokies was in an industry submission to the parliamentary inquiry into future gaming markets and the Liberal election policy carbon copied this in almost every other respect, including the proposed hotel tax rate. This industry position was a compromise worked out between Federal Group, the t owner of every poker machine in the state, and large hotel chains that own most of the poker machine venues.

The deal was Federal would support the government directly licensing pokie pubs (which Federal itself owns a dozen of the largest), in return for a tax cut on the casino pokies which Federal would continue to have the exclusive right to operate.

Given Federal’s monopoly pokies licence has expired and can end, with five years notice, by the government at any time, there is no need to compensate a company which never paid a cent for what is far and away the state’s most valuable public licence.

Nevertheless, the truth is that the only significant unknown in the poker machines bill is how large the public subsidy delivered to the Federal Group through the tax concession on casino pokies will be.

What is at stake here is tens of millions of dollars that will be lost every year to hospitals, housing and community services — funds that will be desperately needed to cover some of the extra expenditure caused by gambling-related harm.

So indefensible are the new handouts that they are likely to be accompanied by renewed marketing of the overdue refurbishment of Wrest Point Casino. However, the development of the so-called “casino royale” (first announced in the Mercury on December 12, 2015), should be paid for by Federal Group, not

the Tasmanian public. Hundreds of millions in depreciation expenses have been claimed by the company over the past decade. This is money that should now be available to fix a self-evidently rundown asset.

While if the public handout is accompanied by the Federal Group again proceeding with its Port Arthur hotel, first announced in 2007 as a benefit of the previous pokies contract, and used as a carrot and stick to influence public policy multiple times since, it cannot be seen as anything other than a sick joke.

The delay in the legislation is most likely because the government wants to ensure that the ALP co-operates with its plan to avoid scrutiny through rushing its legislation through both houses of parliament without referral to a parliamentary committee.

No doubt the Federal Group’s paid lobbyist, former Labor premier Paul Lennon, who has been sitting on the ALP’s post-election review committee, has been working hard on these issues.

The integrity test for every member of the Tasmanian parliament, is regardless of their position on poker machines, is whether they will support parliament doing its job of scrutinising legislation, or cave into a fear that this will see them targeted by the industry as Labor candidates were in 2018.

In an operational democracy, this should not be a difficult choice.

The new poker machine bill will set out the operating conditions of the most dangerous and the most valuable public licences in the state. As a bare minimum, we have a right to expect that legislation which will determine the life chances of thousands of the most vulnerable Tasmanians until 2043, is referred to an appropriate parliamentary committee so requisite information can be provided to MPs.

Anything less will confirm what many of us already strongly suspect: that this is a parliament that first and foremost represents not the Tasmanian people but the cashed up vested interests which fund two broken and beholden political parties.

Sociologist, researcher and writer Dr James Boyce is the author of Losing Streak: How Tasmania was Gamed by the Gambling Industry.