Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

The most recent estimates available suggest that the horse and greyhound racing industries combined underpin in excess of 24,000 jobs and stimulate approximately €1.6 billion in economic output. The industries receive financial support from the State through the horse and greyhound racing fund under section 12 of the Horse and Greyhound Racing Act 2001. Payments are made from the fund to Horse Racing Ireland and Bord na gCon by my Department. In the period 2001 to date, a total of €841.77 million has been paid from the fund to the horse and greyhound racing industries in accordance with the provisions of the Act. State resources provided from the fund are pivotal to the survival and continued development of the horse and greyhound racing industries.

The Estimates for my Department, passed by both Houses as part of budget 2014, contained an allocation of €54.22 million for the horse and greyhound racing fund. This will be distributed 80% to HRI and 20% to Bord na gCon in accordance with section 12(6) of the Act. To allow the Department to provide the moneys allocated in budget 2014, it is necessary to comply with a technical requirement under section 12(13) of the Horse and Greyhound Racing Acts, which requires increasing the cumulative limit on the horse and greyhound racing fund by €54.22 million to facilitate the budgetary decisions. This is achieved by way of the regulation submitted before the committee. The aggregate limit on the horse and greyhound racing fund was increased in this manner in 2004, 2009, 2010, 2011 and 2012.

The funding of HRI and Bord na gCon supports two important indigenous industries and helps to sustain the role of thoroughbred horse and greyhound breeding, training and racing enterprises and in the development of the rural economy. These industries produce a good return to the State's investment and are a significant net contributor to the Exchequer. It is estimated that the Irish bloodstock industry provides approximately 14,000 jobs, almost €1.1 billion in economic output and exports worth €174 million. In fact, exports are more than that. Ireland holds a pre-eminent position in the thoroughbred racing world. We are the largest producer of thoroughbred foals in Europe and the fourth largest producer in the world. Approximately 40% of the EU output of thoroughbreds and 11% of total worldwide output is produced in Ireland. The fund has helped Ireland to develop into a world centre of excellence for horse racing and has allowed Horse Racing Ireland to undertake a capital investment programme that has underpinned growth in the sector.

Bord na gCon has estimated that the greyhound industry employs a little over 10,300 people and contributes an estimated €500 million in economic output to local economies around the tracks, which have a wide geographical spread. Bord na gCon has reported that, since 2002, more than 10 million people have attended greyhound racing meetings.

The funding being provided to the greyhound racing sector helps sustain a long-standing tradition as the industry is part of the social fabric of our country. This funding underpins the economic activity in what are, in many instances, less affluent regions of the country. It has also contributed significantly to the improved facilities now available at 17 greyhound tracks around Ireland. Both of these industries tick all the boxes in terms of employment and foreign direct investment and are the type of export-orientated industries we need. Not alone that but they enhance our international reputation.

The overall objective of the Government is to ensure that the horse and greyhound racing industries achieve their maximum potential and in so doing contribute to the economic and social fabric of the country. Successive Governments have recognised the importance of these industries for our country and have supported them through legislation and policy initiatives at various stages. The support provided by public funds to investment in these industries, through the horse and greyhound racing fund, has enabled Ireland to develop into a world centre of excellence for horse and greyhound racing and breeding.

The draft regulations before the committee today provide for an amount totalling €54.22 million to be allocated to the horse and greyhound industries in 2014. It is expected that approximately €25.32 million will be collected from excise duty on off-course betting in 2013. The funding mechanism, which was established under the Horse and Greyhound Racing Act 2001, has proved not to be satisfactory in so far as it has required an increasing amount of Exchequer funding over the years, due to successive cuts in betting duty, coupled with the fact that an increasing amount of betting activity has migrated to tax free platforms for example, remote and online betting.

As part of its overall commitment to the industry the Government is addressing, through legislation, the anomaly whereby remote and on-line betting operators are outside the tax net. The Minister for Finance has published the Betting (Amendment) Bill 2013 which, when enacted, will extend betting duty to on-line and remote operators. The Government wishes to ensure that an appropriate infrastructure is in place to facilitate the growth and development of the horse and greyhound racing industries into the future. To ensure that we spend that money properly my Department tendered for a review of the horse racing industry and of Horse Racing Ireland, HRI, conducted by Indecon, and we are implementing the recommendations in that report. We are doing something similar with the greyhound industry. We have made a policy decision to conduct a full review of Bord na gCon and the greyhound industry to ensure that historical problems are appropriately dealt with and that money is spent as efficiently as possibly without duplication.

We are maintaining a strong budgetary commitment to fund these industries which give an awful lot more to, than they take from, the Exchequer. If one travels, as I have in the past two years, and sees how foreign investors in the bloodstock industry in particular view Ireland as a place to breed, train and raise horses one begins to realise what an international business this is. If we reduce funding below a certain level it will be impossible to maintain Ireland's position as the top breeder and trainer of horses on the planet because it would suddenly drop to second rate status if there is not enough money in prizes and infrastructure. I cannot and will not allow that to happen because we have something very special here, particularly in horse racing but also in greyhound racing. The bloodstock that we breed and produce here has for many years been at the top globally, despite the huge resources pumped into similar industries in other parts of the world.

When this Government took office we were close to the point where funding for horse racing would put the competitiveness and quality of that sector at risk. That is why there have not been dramatic cuts in this sector although there have been some cuts to the fund in recent years as there are this year. It is, relatively, a minor cut because to reduce expenditure further would fundamentally undermine the industry, which is international and can move assets and money very quickly to other nations that compete with Ireland, in particular the UK and France. I am a strong defender of maintaining as best we can the horse and greyhound fund. We are introducing new legislation to complement the legislation that the Minister for Finance is introducing to change the structure of board membership in HRI, which will come before this committee in the months ahead. I will happily answer any questions that members have.