TAXATION OF RACING

Evening Post, Issue 6, 8 January 1935, Page 4

TAXATION OF RACING

GOVERNMENT'S' FALSE MOVE

WHY NOT ADMIT ERROR?

Four years have now passed since the' Government, against the considered opinion of the'administrators of racing, decided to double the tbtalisator tax. Racing up till that date (1930) was at least holding its own, but since,then there has been no cease'in' the bufferings that racing and trotting''clubs have' received. The Dominion in general appears to have shaken itself i free of the more troublesome toils of the depression, but racing (andi trotting) has kept on steadily sink-, ing deeper and deeper into the slough. The, result of the last five years' racing operations must without: much room fair question eupply; the answer as to which judgment in 1930 has been proved tike sounder. ■:. : ■, ', '■ ■-.■.. • : ' .., ;;. > To-racing people it might' not aprfeaT to make much difference -whether, the deduction from every pound invested,1 be 2s (as before the war), 2s 10% d, (from after -the -war till 193 d), or 3s 4%' dv (as since 1930)., Such people could-still argue that if one backed winners one, .would be -successful, otherwise one 'would; be. a loser. Such a particular viewpoint, however,' does not precisely, show the pbsi: tion. It itf^neecssary to study thet case generally to.' ccc what -the true' result 15 WHY THE PUBLIC LOSES. ■■ A: practical example' wjll illustrate what happens when a day's racing is jheld. Let: it be supposed that'the day's' .turnover is £10,000^ Of-coui'se, that atnount of money is not taken to the ractes by the people attending,-for probably; well over half of it represents winning*, that are reinvested. For-the purpose ex? the argument let it be, Supposed that .'the public entered the course with £i(m :for betting in their pockets (which i'is probably an excessive estimate), and: tliat therefore the remaining £6000 invested/ is the playup of winnings. ".. ' . [■..'.' -'"■ ■ On such a set of facts let ihe case be viewed in the light of the deduction from the pool in 1914, i.e., 10 per pent. Then during the day . the total, clipping .■. from the turnover of £10,000 -would be £1000. In other words, the pubfic that entered the course with £4000 w«iuld leave Tnth £3000, and quite -a nuijjtber would.un-. doubtedly be "winners. • ' '--■"- ". .■, .':.. By 1021 various increases had ibeen made in the deduction" tilT itt'Tiad "become a gross UVs per cent.-Syne-.diminution of the pool; of £10,000 ."would ; then '• be £1450, and ■'■he public fwoultT depart from the course with only J£2550 ol its £4.000 original sum, so quite? a cfew more must have been losers. ■'/'," '..':■"■■. .'■ : Finally the case siroce 1930 ias, to' be considered. The public concerned in the betting • are "now re'&eyed of . J5.1687-.-Hte, and those happy cpfitimistas who passed; through the gates leave -with only £2312 • 10s, very little mofce than.'.half the'-Bum with which they parted the day, _ ; This set of facts) is, of course; supposititious only, and.n-(fay not fit iir ■every time with the -real, Auft =it serves to illustrate; what would'happ'sm in .such' circumstances. If favourites wer/e having a bad day; for example, then tore than £4000 -might, have to be co;/i±ributed . -to:, the j>ool ,to, build-up a. tuniovervof-£10,000.: ; .- ■- ,-j However; it 'is clear fhat the amount! of money witjh which-the .pubHc go to the■'races for -staking "on the various events during--any one. day in .very-much less, than the gr<ass turnover. Ihe differencesbetween the> rates of-taxation may appear too small bo merit particular attention when rega-pded .pound by.rpound,,. but weigh the /differences, in .gross, when contrasted wifth {he actual be.tting fund in 'the hand?/of-the public at'the-beginning of any race day, and then the iniquity, of a hea^ taxation on gross turnover becomes vfery' obviously apparent. ■ . RAC/ING PEOPLE KNOW BEST. In l'*3o, the-then president of .the New Zealand Racing Conference (Mr. O. fa. Wattnns) sent, the following ■ telegram to the 'Prime Minister when apprised of the inte-fttion of. the' Government to double the totalis'ator tax: "On behalf pf_the ratfng, jockey, and hunt.clubs of Aew Zc&land, I desire' to-lodge: an. emphatic, pvotust against the. proposal m tire Bucli/et to increase the totalisator 'itas -by, bh per cent., as ray .such increase .must •result in diminished .revenue.. I. beg :to. assure'you. that the .considered :a|nn;on«tt< ihe administrators' of racing us *hat;the; only safe channel through -winch .additional; revenue can be obtained ;'from'the'tcltahffii-! tor without ' crippling a-aiiing^ns. 3to y;er-, mit totalisator investmoritß' ttq "be;.teler, graphed to the clubs oon we <d^rs. ;U.n, lupjort of the telegram Mr^Wa^u^ later lodged a complete tfitntemeßt '"setting; out how the various ("Govacnmeirts Jiao; acted in regard to.the taxation'rifixacina.i and Blso recalling the late Kt. Hon. TV:.. F Massey's promise in 1928 to reduce the ithen ruling, taxation as soon as lt^ became expedient. : ' ; The Government .was unmoved by theserepresentations, and one of the Finance, Acts of that year contained a provision! enforcing the double totalisator tax.jput the racing authorities -had well and ttulyf gauged the inability /.of '-the apott to «m-, dure more taxation, mid lit -was. not -long; before the Government ihad ito ibegin .nte procedure of granting Temiserions 'to Tracing- mlubs to keep .them jyomg. 3?wely.e months ago it appeared ;as jf ithe 'Sport might be on the upgrade -again, tana 'ott ; came half the ruling remission. The <ap-; pearance Was deceptive, however, .mid .the larger remission lias "been regrairted -asfrom March 1 next. . . These remissions are makeshifts* only scaffolding up the raorng,gtructure.' r Tliey are not reconstructions. /IDhey jerve only, to mask the battered cedifice tbehind, tire, scaffolds. They are a tacit admission o£ a mistake, even though-the'giiise'be dtherwiaei The racirtg fabric, is r -Hreakemng' every year. The wear-and-tear of taxation -is taking steady toll without replenishment.- Four years has showir how egregious was that error of judgment made in 1930. Surely tho -time is now long since past .when 'those responsible should admit the mistake. The first step of the remedy is obvious: ißaok to the status quo of 1930. The irext step should '.then be, when the time becomes opportune, the fulfilment of the .promise -made co long ago as 1924 by tho late revered Mr. Massey, a statesman who, had he;been privileged to live, would without any doubt have completely redeemed his pledge.