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| Madam Speaker, recently the Henderson government undertook a review of the Territory’s wagering taxes, including bookmakers’ turnover tax. The need for such a review arose because the past two years has seen significant changes to the Australian racing industry, including taxation, fees, and regulatory developments in other states and territories. For example, most other states have introduced product fees imposed by their racing authorities for the use of race fields by wagering operators such as TABs and bookmakers, with the fee based on the turnover or gross profits of the wagering providers. More recently, the Tasmanian government passed legislation which authorises the sale of the government-owned Totaliser Tote Tasmania, and also deregulated the Tasmanian bookmaking industry. Tasmania also seeks to match the Territory’s regulatory regime as the most competitive for corporate bookmakers in Australia. Additionally, it replaces Tasmania’s wagering tax on bookmakers with a $250 000 fixed licence fee subject to CPI indexation. This is immediately a threat to the Territory’s established bookmaking industry, as the Tasmanian licence fee represents a significant lower cost than the Territory’s bookmaker tax for most of the Territory’s corporate bookmakers. Consultation with the industry indicated that although corporate bookmakers are very happy with the regulatory arrangement in the Territory, the Tasmanian licensing and regulation arrangements meant most would be forced to relocate from the Territory to Tasmania. This is a significant industry in the Territory. Corporate bookmakers employ around 250 employees in the Territory and paid around $10.5m in Territory taxes last year. The likelihood of bookmakers leaving the Territory is a significant concern, and left the Henderson government with tough decisions to make. Not only would such a relocation result in a significant loss of tax revenue, but it would cost Territory jobs. It would also result in a loss of support to the local racing industry, both indirectly through the support of events such as the Darwin Cup, but also support such as rent from the lease of office spaces at the Darwin Turf Club. Faced with this tough decision, there was only one real option for the Henderson government to preserve Territory jobs: retain the industry presence in the Territory and ensure some future tax revenue is retained. That option is to reform the Territory bookmakers turnover tax regime so that it remains competitive with a new Tasmanian licensing regime. This was not a decision taken lightly. To this end, the bill amends the Racing and Betting Act to replace the existing turnover tax with a new profits based scheme. The bill proposes that the new bookmakers tax will commence on 1 January 2010, and will be payable on a monthly basis at a rate of 10% of a bookmaker’s gross monthly profits, with a maximum amount of tax payable in a financial year being $250 000, indexed to Darwin’s CPI. For the 2009--10 financial year, the cap will be $125 000 to account for 1 January 2010 commencement date. Although these measures will significantly reduce tax revenue, inaction would have resulted in most, if not all, corporate bookmakers relocating from the Territory. The Territory would have lost all bookmaking tax revenue in addition to the loss of Territory jobs and damage to the local racing industry. Madam Speaker, I commend the bill to honourable members, and I table the explanatory statement to accompany the bill. Mr ELFERINK (Port Darwin): Madam Speaker, I am about to move an amendment, but before I do, can I just ask the government, in relation to the Licensing Commission report, which reports on taxation revenues, if it would be possible to have the gaming income of the Northern Territory expressed in the way that it is traditionally expressed in terms of volume gambled and those sorts of things. I move that the debate be adjourned. Debate adjourned. |