Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I welcome the Minister for Agriculture, Food and the Marine, Deputy Simon Coveney, and his officials. There are two items for discussion. The first is a Dáil and Seanad motion regarding the horse and greyhound racing fund regulations 2013. The second is an update on the next EU Council meeting. Members will be aware that on 19 November Dáil and Seanad Éireann referred the motion to the committee for consideration. Members have received a briefing note on the motion.

Before we begin, I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable. I call on the Minister to make his opening statement.

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | 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.

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank the Minister. I call Senator Ó Domhnaill.

Brian Ó Domhnaill (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Go raibh maith agat. I welcome the Minister and his officials here today. Over the past few years cuts to expenditure have come under scrutiny in every Department, and the Department of Agriculture, Food and the Marine is no exception. One must scrutinise the overall expenditure on the horse and greyhound racing fund. Today we have an opportunity to do that. It is a huge sum, notwithstanding the employment that the sectors create, at 24,000 jobs, and their value to the Irish economy. The proposal here is to impose requirements on the taxpayer to fund an industry which is also a sport. Both the Economic and Social Research Institute, ESRI, and Indecon in their reports raised serious questions about the viability of the fund and how it is spent. One can compare the €50 million available to the horse and greyhound racing fund with the €25 million available to the Irish Sports Council, which represents 57 national organisations, 32 local sports partnerships and 18 high performance sports at Olympic level. We saw some results of its work at the recent World Championships. The Irish Sports Council contends, as did the ESRI report, that it is very difficult to justify funding horse and greyhound racing while cutting the funding to it and our international athletes. An athlete who won a gold medal for Ireland at the recent World Championships, comes from the Minister's constituency. There has to be a balance.

According to the Indecon report, the horse and greyhound racing fund provides on average €179,000 per race meeting. I accept that these figures may be outdated because the report was published in 2004. None the less, at that time, for every person who attended those race meetings the fund provided €38.

The average subsidy from the fund is €7,100 per job in the industry. How important is the fund? Is it subsidising employment in the industry? Instead of placing more financial obligations on the taxpayer is there not a need to look at the online gambling issue as a way of generating money instead of placing the burden on the taxpayer? That burden should be transferred to the sector or to the gambling industry.

Due to the shortfall in gambling income as a result of people choosing to gamble online, would it not be better to gather money from online gambling rather than from the taxpayer? There are competing demands for funding from the Department's Vote and this expenditure might result in a reduction on funding for disadvantage area schemes and other departmental schemes.

I am not criticising the horse racing sector but I am asking questions today because this is the only opportunity I have to do so. This is not the only assistance provided by the taxpayer for the horse racing and greyhound sector. There have been tax breaks for the income from stallion fees since 1969 to the benefit of the horse racing industry. While I understand what the Minister is trying to achieve, since the Indecon report there may have been other cost-benefit analyses undertaken by Department on the overall expenditure under the fund and what has been the benefit to the punter and to the ordinary taxpayer. I am sure he has considered the option of how income could be generated from online gambling. I ask him to enlighten us as to what alternatives have been considered to fund the industry rather than asking the taxpayer to fund it or to have it competing with other demands on the Department's Vote.

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I will answer some of those many questions at this point.

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I will allow Deputy Ferris first and return to the Minister.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I thank the Minister for his annual report to the committee. The greyhound industry and its contribution to the rural economy in particular to small farmers is very significant. I draw a clear distinction between the greyhound industry and the horse racing industry in so far as greyhound racing is a poor man's sport, in my view. It provides employment and the greyhound tracks all over the country provide a social outlet for low income families and for people involved in that sector. I would find it very difficult to oppose subsidies because it is a very positive industry for rural communities.

The Minister states that the breakdown of the €54 million is 80% and 20% between the two sectors. He said that exports are worth €1.1 billion to the Irish bloodstock industry and €500 million to the greyhound industry. There are 10,300 jobs in the greyhound sector and 14,000 jobs in the Irish bloodstock industry.

I regard this an unequal allocation of funding. I would like to see more money going towards the greyhound sector. I note the sort of money spent on trailers, for example, in the horse breeding and racing industry and in my view there is a significant difference in the people involved in both industries.

I ask the Minister to consider increasing the percentage contribution to the greyhound industry. I would support funding being sourced from online gambling in order to take pressure off the Exchequer. I will not oppose the measure in so far as I think both those industries must be allowed to develop and flourish in our communities. I speak personally about the greyhound sector. I know the value of the sport to rural Ireland and to small farmers and breeders. I know the knock-on effect of the money - even prize money - coming back to the local communities. I am not so sure if this is the case with regard to the horse industry.

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Members have asked valid questions which I will answer. Senator Ó Domhnaill makes a comparison between general sports funding to the Irish Sports Council and the funding for the sports of horse racing and greyhound racing. It is important to reinforce the message that horse racing and greyhound racing are not just sports - each is an industry. Some 90% of horses are bred on farms with two mares or fewer. This is about farmers breeding horses, wanting to live the dream of having a winner at Cheltenham or at the Curragh, for example. Deputy Ferris is very committed to the greyhound industry. The people one sees walking country roads, training and breeding dogs, are part of an industry. This industry generates business for those involved in providing animal feed, bedding, housing and veterinary services; in effect, a whole series of contributors to rural economies across the country.

Deputy Ferris referred to Rob Heffernan whom I know quite well. In many ways he has performed a minor miracle by being a world champion - given the financial resources available to him - compared with the competitors he has beaten in the recent world championships in Russia. I agree that elite athletes and sports people are also part of an industry. The actual sport element of horse racing and greyhound racing is only one part of the activity of the sector which the Department funds. We are funding a whole industry which is massive in size.

I recently visited Qatar and the United Arab Emirates. Both of those countries have significant investments in Ireland. Investors are pumping multi-millions of euro into Ireland. They employ large numbers of people in the management of their stud farms which provide further employment in the surrounding areas. Other sporting activities do not result in economic investment in this country. I refer as an example to Sheikh Mohammed who employs over 130 people in his horse breeding activities here. People need to understand the broader picture, that this not just funding sport. They need to understand that many farmers and service providers are linked to the activities of the greyhound industry and the bloodstock industry.

Regarding the amount of funding we are providing, it is important to note that there was a time when the State was spending almost €70 million per year on the horse and greyhound racing fund. In fact, between 2008 and 2012, there was a reduction in funding from €76 million to €56 million. This fairly dramatic reduction of almost a third occurred during a very difficult and dramatic period for the Irish economy and is understandable to a certain extent. However, if we had maintained that level of reduction in expenditure, we would essentially have put Ireland into a second-rate position and probably never would be able to restore us to the premiership of horse racing countries. Investment we have sought to attract would simply have gone elsewhere, and it is very difficult to win such investment back in that situation. We must take into account the levels of reductions we have seen in the fund in recent years, the impact they have had on the industry and the growth we are now seeing in the sector as Ireland begins to recover. We must reinforce that recovery rather than undermine it.

I fully agree with what has been said in regard to online gambling. The preference is to have a self-funding model rather than a situation where the industry is obliged to go to the Exchequer seeking a top-up. Looking back to 2001, the amount paid into the horse and greyhound racing fund was €58 million, which was matched almost exactly by betting revenue to the State. In fact, the objective when the fund was established was that it would essentially be funded by the duty. Since then, however, a decision was made to reduce the rate of betting duty dramatically. This was done for whatever political reasons and presumably because there was a great deal more activity in the industry at the time, the expectation being that revenues would bear up even after the reduction. The duty has reduced from a rate of 10% some years ago to 1% now. As the amount of betting revenue fell as economic activity weakened, we also saw a huge shift online, with more and more people placing bets using their telephones, iPads, computers and so on rather than going into bookie shops.

There are consequences to that change, one of which is that we have fewer bookie shops and less revenue coming through betting duty, because the turnover has been lower. To be fair to the last Government, it started the process of examining whether betting duty might be applied to online remote betting. We have now figured out a way to do so, and the legislation is there to implement it. This additional revenue stream should increase the moneys accruing to the Exchequer from betting duty by between €10 million and €15 million. There is also a political question to consider as to whether we should increase the rate from 1% in the future. That is the direction in which we should be and are going.

There are no longer any tax breaks for stallion fees; that was done away with some time ago. This is an industry that is paying taxes in terms of standing stallions and so on. I take Deputy Martin Ferris's point that the greyhound and horse racing industries are two different types of industries. I am not sure, however, that I would necessarily make the distinction of one being a poor man's industry and the other a rich man's industry. There are plenty of people who do not have large disposable incomes but are passionately committed to the horse racing industry. Likewise, there are many people with very significant incomes who are major supporters of greyhound racing. I understand where the Deputy is coming from, but those types of generalisations do not really stand up. It is true, however, that the international competition for investment in horse racing is perhaps stronger than it is in greyhound racing, which is why we need to maintain an infrastructure and a level of prize money that will serve to ensure the industry does not move elsewhere. That is the major risk in terms of horse racing. The 80:20 split is included in the legislation and cannot be changed without changing the Act. It does guarantee certainty for both industries, which I am sure they welcome.

I agree with the Deputy regarding the online gambling issue, to which I have already referred. We need to go after that revenue aggressively. The idea that people can avoid tax by betting online is not acceptable. The difficulty, of course, is that it is not that easy to collect online taxation, which is an issue that other countries with large racing industries, including Australia, are also examining. We have taken our time to get this done because we want to make sure we get it right. I hope to bring the legislation forward in the coming weeks.

Martin Heydon (Kildare South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Minister was a little more measured in his response to colleagues than I would have been. Senator Ó Domhnaill's comments were reckless and potentially extremely damaging. He began by paying lip service to economic activity in the industry before going on to suggest its funding should be cut. His attitude is not altogether surprising given the proposal by his party in a pre-budget submission last year that there be a reduction of €10 million in the allocation for the horse and greyhound racing fund. That proposal, if implemented, would have decimated the industry. The Senator also lamented the loss of revenue from the betting industry, without mentioning the successive reductions in the duty that were introduced by Fianna Fáil governments for whatever reason and in the context of whatever linkages it had to the betting industry.

The horse racing industry never wanted to be in a situation where it would be reliant on taxpayer funding. On the contrary, it was happy to be a stand-alone entity in its own right, with betting revenues matching State funding. It is not the industry's fault that it is now in this position. In that regard, I welcome the proposed extension of betting duty to online betting. It must be done sooner rather than later. I understand it is being examined by the Department of Finance, but it is frustrating that it has taking so long to bring it forward. I agree that once that change is implemented, we must then have a debate on whether we should review the rate. It is very difficult to justify the decision to reduce it from 2% to 1% in 2006, whatever about previous cuts.

The Minister indicated that in excess of 90% of horse breeders own four mares or fewer. Many of them come from my own county of Kildare. It is important to note that this section of economic activity is happening in areas where there is very little other economic activity. The horse racing industry is the second largest employer in Kildare, which is an indication of how much it is worth and how much it feeds into other areas. Picking up on what the Minister said in his presentation, on the one hand we have a strengthening bloodstock industry on the sales end. Irish horses are making very good prices which has, in turn, a benefit for the overall Exchequer in sales terms. However, to maintain a vibrant racing sector, we must keep those horses in the country. My concern is that the best horses, which are being sold for the best prices, are being exported. If we do not keep these animals in training here, there will be a knock-on effect on jobs. Will the Minister comment on his recent visit to Qatar and elsewhere in the Middle East where he met some of those high net worth individuals we need to target as the next major funders of the industry into the future?

The changes in European law in regard to VAT are a major concern for the breeding industry. It is somewhat frustrating that the Minister is obliged to come in here every year to discuss the allocation for the horse and greyhound racing fund. This ongoing dependency and uncertainty as to how much money the Minister can win at the Cabinet table is causing stagnation in the industry. Everybody in the industry would accept that we need to move to a more sustainable model of funding. It is very difficult for the industry to plan from year to year for the larger capital projects that need to be done. Perhaps this committee has a role to play in examining international best practice as part of our work programme. Adopting a multi-annual approach to funding would be useful, and I understand the Minister is already doing significant work in exploring that issue.

In the context of the Indecon report, will the Minister indicate when he expects the relevant legislative changes to come before Cabinet? There is great anticipation among those involved in the industry regarding this matter.

Willie Penrose (Longford-Westmeath, Labour)
Link to this: Individually | In context | Oireachtas source

I welcome the Minister. I am probably one of the few present who was a member of the select committee in 2001 when one of his predecessors, Joe Walsh, brought the existing legislation before it. I welcomed the Act at that stage and I welcome it again now. One of the matters which left a sour taste in people's mouths at that time was the tax exemption for stallion breeders. Many could not understand how those owners - many of whom are well to do - were allowed to avail of this exemption. The exemption in question benefited a small number of individuals, but small stud farms such as those at Charlestown, at which the winner of Irish Grand National was trained, and Tullaghnasleek. These farms are responsible for a great deal of direct and indirect employment in the county and they also give rise to downstream employment, even in the transport and haulage sector. Anything that can be done to assist the industry is welcome.

Huge numbers of ordinary people get the opportunity to participate in point-to-point events in Castletown Geoghegan, Kilkenny West, Durrow, Ballymahon and Doory. This is a sport but it is also a significant industry for the areas to which I refer. It can be the lifeblood of many rural areas.

I concur with what the Minister and Deputy Martin stated in respect of the greyhound industry. Two of the nation's 17 greyhound stadiums are located in Longford and Mullingar. Both are excellent facilities and they play host to many activities other than greyhound racing. What are the Minister's plans to continue to improve, upgrade and refurbish the type of facilities throughout the country to which I refer? Kilbeggan Racecourse, which is under the management of Mr. Paddy Donegan, is probably one of the finest examples of a significant return being garnered on foot of the investment made. It is a premier venue and hosts seven or eight race meetings each year.

I recall that the funding contribution was to be equivalent to the betting duty that was to be raised. The ultimate aim is that those who operate the courses would wean themselves off this form of funding. I do not believe those involved in racing want to be dependent on outside funding. The Betting (Amendment) Bill was supposed to be a priority. Why has it taken so long to progress it? I accept that there are difficulties involved but while we are waiting for this legislation, many of the ordinary bookmakers operating in rural areas are closing down. Many of them are being wiped out by online betting - I refer to it as "remote control" betting - from which not a shilling comes back into the country. The bookmakers to whom I refer are obliged to pay tax, employ people, etc. Online betting and other developments have hit these individuals hard. Two or three people are employed by the bookmakers who operate in small rural villages. The Minister will be obliged to pursue this matter with the Minister for Finance, Deputy Noonan, the Minister for Public Expenditure, Deputy Howlin, or whomever is responsible for causing the delay with the legislation. When enacted, the Bill will give rise to a much-needed source of revenue for the Exchequer but if nothing happens prior to that point, many ordinary bookmakers will be wiped out. The owner of Connolly Racing in the town in which I live has been in constant contact with me for the past 12 months, basically asking me what is happening. As already stated, I accept that there are difficulties involved. However, we very capable, efficient and effective in the context of overcoming difficulties relating to taxation. We should be no less effective and efficient when it comes to tackling the anomaly that exists in this area.

Like Deputy Martin Ferris, I would like further funding to be given to the greyhound industry. Many of the small operators in this industry could do with a boost. People tend to consider the top line. However, I deal with many involved in horse racing, the owners and operators of stud farms, etc., and I know that those with only one or two mares are always hoping for that breakthrough which will put them into a position of reasonable sustainability. Those people have been very supportive of the industry. Perhaps in the future the Minister might consider making a greater investment in the greyhound industry. Those involved in it often do not have a sufficient number of avenues to explore in order to ensure that they might place their businesses on a solid footing going forward.

I welcome the introduction of this secondary legislation, of which I am supportive.

Pat Deering (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I welcome the Minister and his officials. I compliment the Minister on maintaining his Department's budget for next year at €54.2 million, particularly in these difficult times. This is money well spent and it equates to just over €2,000 per job in the industry. The latter is crucial to rural areas because all of these jobs relate to such areas. All of those present represent rural constituencies and we are well aware of the importance of the industry to our constituents. Deputy Martin Ferris used the term "the poor man's sport". There are two well known horse trainers in my constituency, namely, Jim Bolger and Willie Mullins. Even though both are at the top of their profession, they employ many people who would be regarded as being at the lower end of the scale. The type of employment for which Mr. Bolger and Mr. Mullins are responsible is crucial to rural communities. In addition, they reinvest a great deal of money in those communities in the form, for example, of sponsorship for local clubs. It is important that such assistance is provided and matters would be much more difficult if this sponsorship was not forthcoming.

Many people in rural townlands are involved with greyhounds. It may be that they own an animal or at least have a part interest in one. There is no doubt that they would like there to be an increase in the 20% funding available, if possible. I am aware that review of the greyhound industry was instigated in recent weeks. The Minister referred to the fact that the horse racing industry includes an international dimension. Are there any plans to expand the greyhound industry in order that it might attract a greater level of international interest? Some of those involved in the industry have informed me that there is a great deal of potential in this regard. What plans does the Minister have in this regard? I notice he has set a deadline of 31 March next for the completion of the review. When it is completed, will a committee or working group be put in place to implement whatever recommendations are put forward? If so, has a timescale been decided in respect of the implementation process?

I agree with Deputy Penrose's comments in respect of online betting. The legislation is overdue. Will it be introduced before Christmas and what is the envisaged timescale for its enactment and implementation?

I again welcome the fact that the Department's budget has been maintained and I support the proposal before the committee.

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Unlike Deputy Heydon, I avoided taking the political bait. People just need to consider the records of different Governments in respect of these issues. The important issue is that we should ignore what happened in the past and instead consider what now constitutes value for money. We must ask whether this is a good way to spend €54 million in the context of all of the pressures faced by the Exchequer, the Government and the country. In my view, it is a good way to spend €54 million. What is proposed constitutes good value for money. We are supporting a sector that does an phenomenal job in terms of maintaining its competitive position internationally. The latter is particularly the case in respect of horse racing. The greyhound industry has a huge impact across large parts of rural Ireland, which would not be the case if we did not fund an infrastructure which allows the industry to maintain its presence in these areas.

The funding that comes back to the Exchequer from this industry is multiples of what we put into it. Therefore, on a whole series of measurements, this represents good value for money.

However, we need to improve a number of elements. I agree with the member that the fact that the horse racing industry and greyhound industry have to wait each year to see what the Government decision will be on the horse and greyhound racing fund in the hope that it will get through committee and be approved and that the industries will not have to take the dramatic cuts that they took a few years ago creates uncertainty around developing the industries. When we examine the legislation in this area, which I hope will be published before Christmas, we will discuss the issue that we would require the Horse Racing Ireland and Bord na gCon to have a multi-annual three year or five year investment-development plan for those industries. In that way we would have an idea the direction in which they are going in two or three years time rather than considering this as an annual investment plan year after year. I would like to have a position where we could fund them on a multi-annual basis and give a three year commitment but I do not believe that will be possible in terms of how the Exchequer and budgetary system work. It would be very difficult.

The next best thing, from a legislative point of view, is to require that in order for them to draw down funds on annual basis they would have a rolling development plan - at least a three year one - in place whereby at any point in time we could ask the head of the Horse Racing Ireland or the head of Bord na gCon where do they want to be in three years time, how they will get there and what they will be investing in for the three years. In that way we would constantly force a planning process that is a multi-annual based planning one rather than a year on year investment programme. That legislation, which will be published soon, has been virtually ready for quite some time but we wanted to introduce it at the same time as the online betting legislation in order that they would come forward together.

The legislation is required for some of the structural change we are seeking to make to Horse Racing Ireland, particularly in terms of its board make-up and the relationship between the Turf Club and Horse Racing Ireland to ensure that we are not duplicating expenditure there. That process is proving to be somewhat frustrating in terms of finalising the agreements between Horse Racing Ireland and the Turf Club on who does what and where, how people spend money and ensuring there is transparency in how money is spent. If we cannot get agreement on that area, I will legislate for it. Let people be in no doubt about this, this is not a process that I am going to allow continue indefinitely. Either we get an agreement between the Turf Club and Horse Racing Ireland on all matters in regard to funding and restructuring on the basis of the recommendations in the Indecon report and the subsequent negotiations which, in my view, have been very fair in terms of the proposed outcomes, or I, as the Minister, will be forced to bring those discussions to a conclusion, but I would much rather a negotiated outcome that everybody considers is fair.

On Deputy Penrose's point, Bord na gCon does not have a significant capital investment programme planned for the next few years. It has spent a good deal of money in recent years upgrading greyhound tracks and has done a good job in terms of the vast majority of those tracks. Anyone who goes greyhound racing in virtually any part of the country will now have a top class facility. The focus in Bord na gCon will be to reduce its borrowings over the next few years. It has come close to its borrowing ceiling and it is anxious to reduce its borrowing. We would encourage it to do that while at the same time making necessary capital investments to make sure that its infrastructure is maintained. We will have a more informed view on that when we get the independent review at the end of March. We will act on that review quite quickly in the same way as we did that we did on the Indecon report. The Minister charged with responsibility for the greyhound industry is the Minister of State, Deputy Tom Hayes. When we got the Indecon report we put an implementation committee in place that involved all the stakeholders and, I suspect, we will do something similar when we get this review, but I do not want to commit to that exact structure because, ultimately, that will be decision of the Minister of State, Deputy Tom Hayes, but, I suspect, I will have an input into it.

On Deputy Deering's questions, there are ambitions to try to internationalise the greyhound industry to a certain extent. It probably does not have the potential in that respect as horse racing because there is not as widespread an international industry in greyhounds as there is in horses but certainly there are opportunities. There are countries that want to develop a greyhound racing industry of which we can be a part. We need to be careful in terms of where and with who we partner but the industry is examining the opportunities in that area.

A recent example of a foreign investment in Irish bloodstock occurred as recently as the past few days when Sheikh Mohammed Al Thani, who has significant interests in the racing industry in Ireland, bought 13 mares but interestingly they came from nine different farms. We are talking about hundreds of thousands of euro in terms of spend in that sale that was managed in Kildare. This is an Irish industry selling horses through Irish infrastructure that have been bred and fed on Irish farms and, in some cases, trained in Irish facilities. We have something that is very special internationally, particularly in terms of horse racing, the value of which perhaps many people do not realise. They would only realise it if we lost it but we will not allow that to happen.

I appreciate the comments and the constructive criticism because we need to question ourselves in terms of how we spend the €54 million involved which is a great deal of money. We need proper scrutiny of it and hard questions need to be asked but we have answers to them.

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Thank you, Minister. I call Senator Ó Domhnaill.

Brian Ó Domhnaill (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Deputy Heydon raised a question. If the Minister was aware of the revenue generated by sport in general, apart from horse racing, in the Irish economy, he would know that revenue from sport in general is worth more to the Irish economy than is revenue from the horse racing industry. That is a fact based on figures from the Irish Sports Federation. It is worth €1.8 billion in GNP and it employs 38,000 people; they receive less funding and more people would benefit from funding, if available, through Irish Sports Council than the horse racing industry. That industry is hugely important to the Irish economy and I support it and the great work that has been done since 2001. However, I do not support the fact that taxpayers' money is being allocated to support an industry that is perceived, and it may well only be a perception, to be an industry that is elitist in nature. If the funding for 2014 was as important to the industry as everyone around the table is saying it is, then steps would have been taken to broaden the tax base in regard to online betting and the €4.6 billion which is generated-----

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I said that we are doing that.

Brian Ó Domhnaill (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

My point is why was that not done sooner and why are we asking the taxpayer to subvent the difference for next year rather than having moved to widen out the online base sooner. The legislation has been in preparation for some time and if a 1% tax was imposed across the board on even online betting, it would almost let the industry pay for itself. I have an issue with asking the taxpayer to foot the bill for an industry which, albeit an important one, is not reflective of the part of the Ireland where I live in County Donegal or of the west.

I have a number of questions for the Minister. The Indecon report contained 13 recommendations on a funding model for the Irish horse racing sector.

How many of those 13 recommendations have been implemented?

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

To clarify, Senator Ó Domhnaill mentioned in his earlier contribution an Indecon report from 2004. There was another Indecon report in 2012. To which report does the Senator refer?

Brian Ó Domhnaill (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I am sorry, I refer to the 2012 report. In effect, it is a horse racing fund and a greyhound racing fund. Is the purpose of the fund to promote horse racing meetings and to try to get more punters through the gate to attend them, and the same on the greyhound side? Could we have clarification on the average number of people attending horse racing meetings in Ireland and whether the number is increasing or decreasing? Could the Minister provide the same statistics for greyhound race meetings?

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In terms of Exchequer contribution to top up the betting duty that is collected, it is important not to be hypocritical. In 2008 the previous Government contributed just under €40 million as a top up. In the following year, approximately €31.5 million was contributed. In 2010, the sum was €28 million. This year the contribution will be less; it will be €27 million. There seems to be a change in approach from Fianna Fáil because the party has moved from government to opposition in order to seek a political opportunity.

Brian Ó Domhnaill (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I was never a member of government. I was never a Cabinet Minister. I am trying to question an issue of public policy about which I feel strongly whether in Government or in opposition. I happen to be in opposition now. I have not played party politics with the issue.

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Senator Ó Domhnaill should allow me to answer the question.

Brian Ó Domhnaill (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Perhaps some members have closer connections to the racing industry and therefore have conflicts of interest. I do not have any.

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Let us refrain from such talk.

Martin Heydon (Kildare South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I think the remark was directed at me. Is representing my constituents a conflict of interest?

Brian Ó Domhnaill (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I did not name anyone.

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Minister should be allowed to respond. Four questions were asked.

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The other point I would like to make is that in terms of consistency we had this discussion last year and the Senator’s party spokesperson in the Dáil had no problem with the horse and greyhound racing fund. In fact, he thought it was a worthwhile expenditure. I am trying to understand what Senator Ó Domhnaill is proposing. Does he propose that we reduce the fund and by how much?

Brian Ó Domhnaill (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is that a question?

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am trying to find out what the Senator is seeking. My point is that we made a minor reduction to the horse and greyhound fund because every part of the Department’s budget must take its fair share in terms of reduced expenditure. I also make the strong point that the allocation represents very good value for money. If somebody else thinks that there should be a different amount allocated then let us hear it.

In terms of the recommendations in the Indecon report, we have got agreement to implement practically all of them but in order to make the changes we must introduce new legislation. Many of the recommendations were about changing the board’s structure. That is happening and it will be in the legislation. A focus of the recommendations was to ensure that we do not duplicate the work of the Turf Club and Horse Racing Ireland in terms of taking a joint service approach to human resources, HR, pension management, administration and such matters. The vast majority of that has been agreed. There are one or two outstanding issues which I have asked both the Turf Club and HRI to resolve. I am hopeful those issues will be resolved within the coming weeks before the legislation is introduced. The recommendations in the Indecon report will be implemented practically in full. Any of the decisions in the report that we decide not to implement will be decided on the basis that we do not think it is the right thing to do, as opposed to not being able to do them. We have taken the report very seriously, as we should, and we will do the same with the greyhound industry.

In terms of the fund being for racing, it is spent to ensure we have an infrastructure in place for a horse and greyhound racing industry. If one does not have top class horse racing and greyhound racing in Ireland one will not have the industry that feeds into it. This is not just about getting numbers to race meetings. It is about ensuring that we are breeding, training and developing horses in Ireland as that plays to our natural competitive advantage in terms of having a limestone-based grass production system. We are privileged to live on this island in terms of its grass growth potential that allows us to produce dogs and horses in particular that have very strong bones and good muscle development. That is the reason people who have a lot of money to spend and who are very committed to the industry choose Ireland as the place to develop their bloodstock. We will maintain that.

The total attendance at race meetings in 2012 was just under 1.2 million people. To give an idea of scale, that is approximately the same number of people who attend the GAA hurling and football championships. The average attendance at a race meet in 2012 was just under 3,500 people. These are not insubstantial numbers. The numbers attending race meets is just an indication of the level of support for the industry but it is a significant indication.

In terms of the funding of infrastructure for other sports, it is important also to note that the State does from time to time, rather than on an annual basis, invest heavily in infrastructure such as the Aviva stadium or other pieces of sporting infrastructure in various parts of the country through the sports capital grant programme or significant one-off capital expenditure. That does not happen generally in the horse and greyhound industry because we ask them to use the horse and greyhound fund for that purpose.

The questions are fair and I do not wish to become party political. I am sorry if I did. I am protective of the industry because it is genuinely world class. We have done a reasonably good job through recessionary years in this country to maintain an industry that is world class in terms of its standard. Now that our economy is starting to grow again I hope we will be in a position to start increasing the horse and greyhound fund again in the future to allow the industry to grow and expand to its full potential. It does have the potential to grow beyond where it is at the moment.

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Minister referred to difficulty in introducing a betting tax but he said he had figured it out.

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

On the betting tax, at the end of the Government’s last term and since then, the Government and the Department of Finance have been examining how we can collect betting revenue from online betting and remote betting. That is a much more complicated process than one might think. We have a number of different online platforms where betting takes place. We have betting exchanges and online bookies and some companies do both. We must also ensure that if somebody is operating outside of the State but taking bets from Irish punters that we are capturing the revenue. We needed to design a system that ensures that when people make a bet in Ireland online, whether the bookie facilitating the platform is based in Ireland or elsewhere, that we get a tax take or duty take from each bet. We have a system now that will allow us to do that which will be based on a licence fee to take online and remote bets from people in Ireland.

Linked to that licence fee they will have to declare their turnover and pay a duty on that turnover. In the case of vetting exchanges, they will be paying a tax in terms of the financial cost of facilitating the transactions. We will be able to debate the detail of that when this legislation comes before the Dáil. I look forward to that.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

The Minister gave a figure of €1.2 million on an average of 3,500 attending what I take it is horse racing.

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes, that is horses-----

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

What about the greyhound side of it?

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I can send those details to the Deputy. I happen to have the Horse Racing Ireland fact book in terms of numbers but we can send on the greyhound figures to the Deputy.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

In terms of the greyhound side, there are greyhound tracks in most parts of the country and the prize money is very small.

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

That is true.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

It is the interest and the social aspect that is keeping going those involved. Nobody will make big money out of the greyhound sector unless they are lucky enough to have a Derby winner or something like that. The social side of it is of huge importance to my town of Tralee. When greyhound racing takes place in Dundalk and across the country it is a big social occasion. I feel very close to those people because I can see the value of the sport and its knock-on effect on the local economies. That is why I would be reluctant to tamper with it. I would like to see the greyhound side increase more but as the Minister stated, we cannot do it because of legislation and so on.

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

One of the big differences between greyhound racing and horse racing is that we are under a great deal of pressure in Ireland to maintain prize money in the horse racing sector because the same people race in Ireland as in the United Kingdom, and in some cases as they race in France. What we do not want to see, therefore, is our best horses moving out of Ireland to other countries that have higher prize money and, as a result of that, reducing the status of the horses in terms of the number of group 1 classifications we can run in Ireland.

There are different pressures on the two industries. The competition from abroad in terms of horse racing is intense and therefore we must maintain a level of prize money here to remain competitive. In terms of greyhound racing, to encourage and incentivise breeding in and development of the sector we must have prize money that is at a certain level but we do not have the same level of international competition we might have for horse racing. It exists to a certain extent because of the industry in the UK but we do not get quite as many people travelling, literally on a weekly basis, between the two jurisdictions.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

It should not be forgotten that all the people raising money for hospitals or GAA clubs use the greyhound sector to do that. It is coming back into the communities-----

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes, very much so.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

-----and that is why I see a big difference between that and the horse breeding sector. The horse breeding sector is more commercially orientated whereas the greyhound sector is community based.

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

To clarify, the definition of horse racing and greyhound racing is to distinguish between the recreational sport horse and perhaps coursing. It is called the horse racing and greyhound racing fund regulation as opposed to just horse and greyhound-----

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes. If this was the horse industry fund and the dogs industry fund there would be a different interpretation. This is about supporting the thoroughbred industry, which is horse racing, as opposed to Horse Sport Ireland, which is very much around eventing and show jumping, which is also a huge industry, and likewise in the dog side.

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As someone who has a closer affinity with the other half of the horse industry it is lamentable that the sector cannot benefit either from the horse racing fund or the betting fund because it does not apply.

I thank all the members for a lively discussion. There does not appear to be any disagreement that the horse racing and greyhound racing sectors are vitally important. If these industries were allowed to continue unsupported I imagine the report on the economic development of rural areas the Minister, Deputy Hogan, has commissioned would lament that fact. There is general agreement on the need to get the betting tax extended to a broader base. Whether it should be increased from 1% is an issue on which we should have an honest discussion to ensure that when we meet to agree a fund we can say without doubt that it is matched by direct revenue. Apart from PAYE, VAT or other ancillary taxes collected from those employed in the sector it should be directly funded, euro for euro, with revenue from the betting industry, which is available to be tapped into.

Is it agreed that the joint committee recommends there should be no further debate on the motion by Dáil Éireann or Seanad Éireann? Agreed. That concludes our consideration of the motion.

I propose that a report on the proceedings of today's meeting will be laid before both Houses of the Oireachtas. Is that agreed? Agreed. We will suspend for five minutes to allow the withdrawal of the witnesses. We will resume on the pre-Council agriculture and fisheries meeting, which is particularly important for the fishing industry. We will resume just after 3.30 p.m. We have to conclude our consideration of this part of the meeting by 5 p.m.