Scratchings Financial Difficulties “Dominant Problem”

Press, Volume CX, Issue 32361, 29 July 1970, Page 4

Scratchings

Financial Difficulties “Dominant Problem”

(New Zealand Press Association) -r, . .? WELLINGTON.

Financial difficulties were the dominant problem of the racing industry and the cause of any dissatisfaction within it, the New Zealand Racing Conference submitted to the Royal Commission on horse and dog racing yesterday, in a final address on behalf of the conference by its counsel, Mr T. F. Fookes.

It had not been disputed, Mr Fookes said, that racing generally was short of money—and it was not just because there were too many tracks. The dominant cause was that during the last 15 years rising costs had far outstripped clubs’ revenue. The- chairman, Sir Thaddeus McCarthy, asked why profits had not risen with costs. It was, he suggested, because attendances were not substantial, and on-course turnover suffered. Mr Fookes accepted that as a cause, but not the main one. Income had risen, he said, but so had some costs which could not be passed on. The only practical form of relief was tax reduction. The Government should grant this because if the taxation rate was so high that the health of racing deteriorated, the tax was defeating its purpose. Between 1950 and 1969, total turnover and the Government’s take had risen by 135 per cent, while clubs’ revenue was up 88 per cent, said Mr Fookes. In the next 12 months, the

T.A.B. could well face substantial wage claims which ultimately would be borne by the clubs, which meant that the Government's proportion of total betting revenue would be higher than the 60 per cent it took last season. Finally, Mr Fookes claimed, the New Zealand investor was paying too high a price for his bet. The Racing Conference, he said, felt the Government's tax cut should be 5 per cent. $3.7m Asked For This apparent lowering of the Government's revenue might not be as great as it seemed, he said, because of compensating factors such as same-day payout and extra permits—if these were recommended by the commission—and the stimulus to betting which would stem from the fact that more money was available. More money in racing would lead to higher quality of racing, and would benefit those in the industry, and higher quality would attract a greater following, and thus higher turnover. If there was a tax reduction in favour of racing it was not claimed that all the resultant revenue should go to the clubs. The conference was asking for 53.7 million—sl.l million for the clubs and the rest to go back to the better. Voting System Only two clubs had come to

the commission asking for one-club-one-vote concept, and there was a complete absence of agreement among critics on a new voting system. The real question was whether it was right for metropolitan clubs to have the same voting power as district clubs, ana that was for the clubs to decide. The evidence did not support the contention that the metropolitan clubs would allow a change of system, said Mr Fookes. The structure and form of the conference, he suggested, was coming about within its ranks. It was, as it should be, a process of evolution. If the commission was contemplating recommending a change, he said, it was desirable that on district committees each delegate should have one vote. Finally, If it had been shown that the workings of the conference had been hampered by an inadequate or unfair voting system then it would need to be examined—but that had not been shown. Centralisation Turning to centralisation, he said the advantages were clear, but the disadvantages may not have been given adequate emphasis. There was the potential problem that too much centralisation might saturate some areas with racing, and the advantages to the clubs which moved might not be so great and that the host clubs might be harmed. There was also the question of the amount of racing tracks could stand, especially those where the climate was unfavourable and the loss of character of country clubs providing a family day out which was not practicable at a city track. If Levin, Foxton, and Otaki were closed, Mr Fookes said, Awapuni would have to cater for another 154 horses a day. Centralisation, said Mr Fookes, was not the remedy for all the economic ills of racing. It should only be encouraged or imposed where it was clearly shown that the advantages outweighed the disadvantages. He submitted that should the commission recommend that there was scope for ceintralisation it should be confined to clubs which duplicated facilities Ln a small area.