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

I think most people know what the formalities are in respect of the horse and greyhound racing fund. I will be happy to answer questions from members following my presentation.

The most recent estimates available suggest the horse and greyhound racing industries underpin over 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. The Department of Agriculture, Food and the Marine makes payments from the fund to Horse Racing Ireland and Bord na gCon. Since 2001 over €963 million has been paid from the fund to the horse and greyhound racing industries in accordance with the provisions of the 2001 Act. The cumulative upper limit on payments from the fund provided under the relevant regulations has, therefor, been reached.

The Exchequer funding provided from the fund is pivotal to the survival and continued development of the horse and greyhound racing industries. In order to give effect to the provisions of budget 2016, the cumulative upper limit must be increased by regulation. This happens each year. The Estimates for my Department, as passed by both Houses as part of budget 2016, include an allocation of €74 million for the horse and greyhound racing fund. This will be distributed in accordance with section 12(6) of the 2001 Act, with 80% or €59.2 million going to Horse Racing Ireland and 20% or €14.8 million going to Bord na gCon. In order to allow my Department to provide the moneys allocated in budget 2016, it is necessary to comply with the technical requirement under section 12(13) of the Horse and Greyhound Racing Act for the cumulative limit on the amount payable from the horse and greyhound racing fund to be increased by €74 million. This is being achieved by means of the regulations that have been submitted to the committee today. The aggregate limit on the horse and greyhound racing fund was increased in the same manner in 2004, 2009, 2010, 2011, 2012, 2013 and 2014.

It is estimated that the Irish bloodstock industry provides 14,000 jobs and contributes almost €1.1 billion to the economy. In 2014 the industry achieved exports of over €220 million to 34 countries. It is estimated that it accounts for up to 80,000 tourists to Ireland each year, who are among the more than 1 million people who attend horse race meetings in this country each year. Ireland holds a pre-eminent position in the thoroughbred racing world as the biggest 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 horse and greyhound racing fund is a critical part of the dynamic that has shaped the industry. It has helped Ireland to become a world centre of excellence for horse racing and allowed Horse Racing Ireland to undertake a capital investment programme that has underpinned growth in the sector. The horse racing industry satisfies all of the critical requirements for success in terms of employment and foreign direct investment. It is the type of export-orientated industry we need. It is not an exaggeration to say it has probably done more than any other to enhance Ireland's international reputation in recent times.

The greyhound racing sector is also an important driver of employment and economic activity in rural and urban areas. Bord na gCon estimates that the greyhound industry employs over 10,300 people and contributes €500 million in economic output to local economies around tracks which have a wide geographic spread. Bord na gCon reports that since 2002 over 10 million people have attended greyhound racing meetings. The board employs over 700 people, including full-time and part-time staff, and has an annual turnover of approximately €40 million. The funds generated from greyhound racing are reinvested in the industry through contributions to prize money and grants to various bodies involved in the greyhound racing and breeding sector, as well as the promotion of greyhound welfare and the regulation of the industry. The challenge for the board is to encourage the development of a commercial greyhound racing and breeding industry built on a customer-focused, high quality entertainment product that meets the highest international standards of regulation. The funding provided for the greyhound racing sector helps to sustain the longstanding tradition of the industry as part of the social fabric of the country. I refer, in particular, to rural parts of the country. This funding underpins economic activity in parts of the country that are, in many instances, less affluent and contributes significantly to the improved facilities available at greyhound tracks around Ireland. Greyhound racing is an activity that is inextricably linked with the farming community. While it is, undoubtedly, part of the fabric of rural Ireland, it also enjoys a strong urban support base.

The Government's overall objective is to ensure the horse and greyhound racing industries achieve their maximum potential and contribute to economic and social development. Governments of all persuasions have acknowledged the importance of the industries and supported them through legislation and policy initiatives over a long period. Without this support, these vital industries would simply not survive. The advent of new technologies and business models has challenged the Government to re-evaluate the funding mechanisms for the industry. As part of its overall commitment to the industry, the Government has addressed through legislation the anomaly that meant remote and online betting operators were outside the tax net. On 14 April last my colleague, the Minister for Finance, signed a commencement order for the Betting (Amendment) Act 2015. The Act came into force on 15 April, with some aspects of the new regulatory regime being commenced on 1 August. The Act brings betting exchanges and Internet and mobile betting providers within the scope of the existing licensing regime and extends the existing 1% turnover tax on land-based bookmakers’ activities to online and mobile bookmakers. The Act also means the 15% commission tax on betting exchanges which was initially tabled in 2011 is finally being implemented. These measures are expected to increase revenues from betting tax by €25 million in a full year.

Horse Racing Ireland and Bord na gCon have operated through challenging economic conditions for several years. I have had the activities and operation of both bodies reviewed in that period. In that context, members will be aware that the Committee Stage debate on the Horse Racing Ireland Bill 2015 will take place the week after next. The Bill introduces a range of improvements in governance and accountability arrangements, many of which derive from recommendations made by Indecon consultants following its review of the sector. That Bill has been through a comprehensive process of pre-legislative scrutiny at this committee. I know that the process involved consultations with a wide range of stakeholders and that officials from my Department provided considerable assistance for the committee in its deliberations. The Bill will strengthen the Ihorse racing industry, enable it to deal with the existing challenges and, most importantly, maximise its future potential. I am grateful for the committee’s input into the process. Indecon consultants was commissioned to draw up a report, A Review of Certain Matters Relating to Bord na gCon, which assesses the suitability of the legal, governance and regulatory framework supporting the greyhound industry and identifies opportunities to maximise its commercial income. My colleague, the Minister of State, Deputy Tom Hayes, recently appeared before the committee to discuss aspects of the report. He outlined the Government's commitment to the implementation of its recommendations. My Department is preparing the heads of a Bill to respond to some of Indecon's recommendations. I expect the committee to have a significant role to play through the pre-legislative scrutiny process, as was the case with the horse racing legislation.

I do not wish to understate the challenges facing Horse Racing Ireland and Bord nag Con as they work to grow and develop the horse and greyhound racing industries in an extremely competitive international market. I am confident that the industries have tremendous growth potential, with sporting, leisure, tourism and cultural appeal across a wide demographic nationally and internationally. The Government is working hard to put the kind of statutory and policy framework in place that will allow this growth to take place. I appreciate the contribution the members of the committee have made to the debate on the future of these critically important industries. I am confident that we share a common objective of maximising the contribution of the sectors to the economy and those working in the industries, many of whom are absolutely passionate about both sectors. None of this can happen without the critically important contribution made by the horse and greyhound fund. Copies of the draft regulations have been circulated to members of the committee.

Section 12(13) of the Horse and Horse and Greyhound Racing Act 2001 provides that a draft of these regulations be laid before both Houses of the Oireachtas and a resolution approving the draft be passed by each House before the regulations are made by the Minister. Accordingly, I ask members for their support so as to ensure that Horse Racing Ireland and Bord na gCon receive the funding provided for in budget 2016 and that the very important role of these industries, and the economic activity generated by them, are sustained into the future. I commend this regulation to the committee and I look forward to discussing any matters arising.