Andrew Doyle (Wicklow, Fine Gael)
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I welcome the Minister for Agriculture, Food and the Marine, Deputy Simon Coveney, and Mr. Dermot Ryan and Ms Emer McGeough, officials from the Department of Agriculture, Food and the Marine. Senators have left for a Seanad vote but some indicated that they will be back. Members will be aware that on 18 November, Dáil Éireann and Seanad Éireann referred the motion on this horse and greyhound racing fund to this committee for consideration. I invite the Minister to introduce the motion.

Simon Coveney (Cork South Central, Fine Gael)
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The most recent estimates available suggest that the horse and greyhound racing industries, combined, underpin in excess of 24,000 jobs and stimulate €1.6 billion in economic output. These 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 by my Department to Horse Racing Ireland and Bord na gCon. In the period from 2001 to date a total of €895 million has been paid from the fund to the horse and greyhound racing industries in accordance with the provisions of the Act. State funding provided from the fund is 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 2015, contain an allocation of €68 million for the horse and greyhound racing fund. This is an increase of €14 million from the 2014 allocation of €54 million. Some 80% of this will be distributed to Horse Racing Ireland, HRI, and 20% will go to Bord na gCon in accordance with section 12 of the Act. In order to allow my Department to provide the monies allocated in budget 2015 it is necessary to comply with a technical requirement in the Horse and Greyhound Racing Act that requires increasing the cumulative limit on the horse and greyhound racing fund by €68 million. This is achieved by way of the regulations submitted here today before this committee. The aggregate limit on the horse and greyhound racing fund was increased in this manner in 2004 and each year from 2009 to 2013, inclusive.

It is estimated the Irish bloodstock industry provides 14,000 jobs, almost €1.1 billion in economic output and exports worth some €200 million. Ireland still holds a pre-eminent position in the thoroughbred racing world. It is the biggest producer of thoroughbred foals in Europe and is the fourth largest producer in the world. Approximately 40% of EU thoroughbreds and 11% of the total worldwide are produced in Ireland. The fund has helped Ireland to develop into a world-class 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. The horse racing industry satisfies all the critical requirements for success in terms of employment and foreign direct investment and it is the type of export-orientated industry we need. Not alone this but the industry has probably done more than any other to enhance our international reputation in recent times.

Bord na gCon estimates that the greyhound racing industry employs over 10,300 people and contributes an estimated €500 million in economic output to local economies around the tracks, which have a wide geographic spread. It reports that since 2002 over 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 many counties. This funding underpins economic activity in what are, in many instances, less affluent regions of the country and it has also contributed significantly to the improved facilities now available at greyhound tracks around Ireland.

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. Time and again Governments have acknowledged the importance of these industries and have supported them through legislation and policy initiatives over a long period. The support provided by public funds for investment in these industries, through the horse and greyhound racing fund, has enabled Ireland to develop into a world centre of excellence for horse racing, greyhound racing and breeding. The draft regulations before the committee today provide for an amount totalling €68 million to be allocated to the horse and greyhound industries in 2015.

The funding mechanism, which was established under the Horse and Greyhound Racing Act 2001, has been proven to be unsatisfactory as it has required increased Exchequer funding over the years. This increase has been necessary due to successive cuts in betting duty coupled with an increasing amount of betting activity migrating to tax-free platforms.

As part of its overall commitment to the industry, the Government is addressing, through legislation, the anomaly whereby remote and online betting operators are outside the tax net. The Minister for Finance has published the Betting (Amendment) Bill 2013, which, when enacted, will ensure that all bookmakers taking bets from Ireland pay a 1% betting duty on those bets in the same way that betting shops currently do. Betting exchanges will also be subject to tax under the new arrangements but the calculation of that tax will differ from that applying to bookmakers - they will be subject to a 15% duty on their commissions. These measures will ensure that the duty received from betting will increase significantly. The latest update from the Department of Finance suggests that the Betting (Amendment) Bill 2013 is likely to pass all Stages in the early part of 2015.

There was a significant increase in the horse and greyhound fund in the recent budget because there is now a new revenue stream.

On budget day the Minister for Finance estimated that the increased revenue from online and remote betting will be approximately 25%, and we have decided to allocate a portion of that money to the horse and greyhound industries through the horse and greyhound fund to make up some of the ground lost not so much in the last three years but in the preceding period from 2008, when the fund was €76 million. It decreased dramatically in recent years, out of economic necessity. With the availability of a new revenue stream from next year, it is more than justifiable to allocate some of that increased revenue to the industry which predominately generated it.

Indecon Economic Consultants was commissioned to undertake a review of certain aspects of the Irish horse racing industry. The review consisted of an in-depth analysis of the legislation, governance structures, funding and management of the industry in Ireland. The ensuing report, which was published in July 2012, contained recommendations for change to assist in the future long-term development of the sector. The Horse Racing Ireland (Amendment) Bill giving effect to some of the recommendations in the Indecon report is currently being progressed, having recently completed the pre-legislative scrutiny phase. In this regard I thank the Committee for its very helpful report.

Indecon was also commissioned, on foot of a tendering process, to conduct a review of certain matters relating to Bord na gCon in order to assess the suitability of the legal, governance and regulatory framework supporting the greyhound industry and to identify opportunities to maximise the commercial income of Bord na gCon. The ensuing report, which was published on 7 July 2014, contained 27 recommendations. Following from the Indecon report, Bord na gCon submitted a document to my colleague, the Minister of State at the Department of Agriculture, Food and the Marine, Deputy Tom Hayes, in early October 2014 outlining its plans and timelines to address the key strategic challenges identified by Indecon. Bord na gCon is proceeding to implement the recommendations in the Indecon report, with the priority being to reduce debt to a sustainable level and address the pension deficit. At the earliest opportunity, legislation will be brought before the Cabinet for approval, in accordance with procedure, to address some of the recommendations of the Indecon report.

As I stated at the outset, State funding provided through the horse and greyhound racing fund is pivotal to the survival and future growth of the horse and greyhound racing industries. These important industries require funding for their survival and to facilitate growth and development into the future. The Government has made provision in budget 2015 to allocate significantly increased funding compared to the previous two years, as is appropriate for the reasons I have outlined. My approach has been to insist on independent reviews of both industries and to act on the reviews by making the appropriate changes. I have also been able to increase funding for the development of the two industries because the availability of a new revenue stream has made it affordable to do so.

A copy of the draft regulation has been circulated to the members of the joint committee. Section 12(13) of the Horse and Greyhound Racing Act 2001 provides that a draft of 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. I ask members for their support in ensuring that Horse Racing Ireland and Bord na gCon receive the funding provided in budget 2015 and that the important role of these industries, and the economic activity generated by them, are sustained into the future. I am making the same request as I made last year and the previous year, namely, that the committee refer the resolution to both Houses for approval without debate.

Éamon Ó Cuív (Galway West, Fianna Fail)
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I thank the Minister for his presentation. I often wonder why the fund is structured in such a way that we have to revisit it every year. I presume it could have been increased by three times the amount and only come back to us every third year.

Simon Coveney (Cork South Central, Fine Gael)
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I understand we are required under the legislation to do it annually.

Éamon Ó Cuív (Galway West, Fianna Fail)
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Perhaps the legislation should be changed because I do not know what we are meant to do in terms of opposing the proposal or otherwise. I do not intend to oppose it although I am not quite sure of its purpose.

Andrew Doyle (Wicklow, Fine Gael)
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It will be helpful if the betting tax comes on stream. Year after year the committee has expressed a desire that the fund be self-financing so that a Supplementary Estimate would not need to be considered. I think our role at present is to keep a watching brief on the matter.

Simon Coveney (Cork South Central, Fine Gael)
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The idea behind the legislation, which was in place long before I took office, was to provide for an annual approval process. This is a considerable amount of money. It is going into a strong industry which needs it and which is delivering much more back to the State than we put into it. It is still money, however, and if the ceiling is to be increased every year, there is a requirement for a checking system through this committee. I agree that it would make sense to change this procedure. We investigated ways of doing that in the legislation and hopefully there will be an opportunity to discuss the legislation in the coming weeks. It will then be up to the committee.

Éamon Ó Cuív (Galway West, Fianna Fail)
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There is no hypothecation, in other words, the betting tax is not sent directly to the fund. It goes to the Exchequer first.

Simon Coveney (Cork South Central, Fine Gael)
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Yes.

Éamon Ó Cuív (Galway West, Fianna Fail)
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We approve every dime spent by the Department through the Estimates process. The State cannot spend any money without the approval of the Oireachtas through the Vote system. That is provided for but I will not delay the discussion.

I was disappointed that the betting tax was not raised to 3%, for a number of reasons. At 3%, it would have covered the total cost of this fund, as well as providing money that the State could use for other purposes and additional funding for the horse and greyhound sectors without recourse to ordinary funding from the Exchequer. In other words, it would have been funded from betting revenue.

I would have liked some of that money to have been given to organisations such as Gamblers Anonymous Ireland because gambling has become a major affliction in our society. The one difference between gambling and other addictions, such as alcohol, is that gambling is a hidden addiction that often remains unseen until it is too late. We are aware of the devastation it is causing for society. Lots of taxes are socially regressive but the betting tax could have been a socially progressive tax by being put to good use in dealing with the fallout from gambling and, perhaps, discouraging some people from becoming addicted.

Horse racing and the horse industry in general make a significant contribution to our economy. It is important that we support the sector. It is something we are good at, and we have natural advantages as well as inherited advantages and know how due to the stallion tax relief and other measures over the years. We have built up a very good reputation worldwide and it is important we maintain that reputation by continuing to invest in the industry. It is a rural industry which employs thousands of people.

Because it is dispersed, it is perhaps not as visible as some other industries but it is a very important export industry.

We all know about the problems in Bord na gCon. I hope this matter is dealt with expeditiously and the Minister mentioned that legislation will be brought forward at the earliest opportunity. I suppose it would be fair to say that promises of legislation over the years have far exceeded delivery of legislation in Departments as there are always unforeseen delays. In what kind of timeframe does the Minister realistically expect to see that legislation? When we get that timeframe, we can multiply it by two, in my experience, because every time we get a list of legislation on the programme for legislation, only about a third of the A-list gets published in any one session. Therefore, it is important we would see that.

As I said, Fianna Fáil will be supporting the passage of the regulations under consideration. However, I would like it noted that I believe all of the horse and greyhound allocation should in the future be funded from betting tax, with a little left over for other very worthy purposes, and that, instead of it being a burden on the Exchequer, taking a non-official hypothecation into account, it would be a contributor.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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I thank the Minister for his presentation. I am very conscious of the number of people employed both in the horse sector and the greyhound sector, and the value this has for rural Ireland, as well as the general importance of the greyhound sector to rural Ireland. Something like 24,000 people are employed and the benefit to the economy is difficult to argue against. In the current climate, however, it is very difficult, if one does not know the background in regard to rural Ireland, to try to justify it, but we have to justify it to our constituents, particularly when parts of the social supports are being cut every year.

I am very disappointed an opportunity was missed to deal with this through the betting tax. The Minister said the take on 1% will be €25 million, which, as Deputy Ó Cuív said, means the take on 3% would be €75 million. Given we are putting in €68 million, there would be €7 million of a surplus, and the €68 million could go some way to meeting the cuts to social services, thereby relieving the hardship and pressure that exists. However, this was not done in the budget so, effectively, we are left with a situation where we must decide whether to agree to this motion.

I will agree to it but I want to make my reservations known. I am very disappointed that more emphasis was not given to the revenue that could come in from betting tax, which would have covered this completely and allowed for that extra funding. The reason I am supporting this is that I am very conscious of the value it has for rural Ireland, which has taken an awful hit in the last number of years. The social consequences of what is happening is shown in the economic disparities in many parts of rural Ireland. It is the contribution of people involved in the greyhound sector in particular, who are in practically every single parish all along the west and south coasts, that is helping to maintain the social fabric as well the local economy, and effectively helping people to tread water at this time. I am making my reservations and my disappointment known, although I am not going to oppose it.

Mary Ann O'Brien (Independent)
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I thank the Minister for attending. Like the previous speakers, I would like to support the legislation for the fund of €68 million. This summer, we were fortunate enough to have most of the bodies concerned with racing, such as the Turf Club and HRI, in to talk to this committee about the new legislation. Dermot Weld gave the very good example, which the two previous speakers might consider, of looking on racing as an Enterprise Ireland or an IDA considering the amount of foreign direct investment involved. It is not just about tech, or manufacturing, or the Googles or the food business; it is an industry all of its own.

As Deputy Ferris said, it is really the thread of rural Ireland. A bit like with Katie Taylor, except Katie Taylor does not have as many people employed, we are the best in the world at this. The Minister knows there is a stud farm in Tipperary that is the best in the entire world, and there are not too many industries we can talk about in that fashion. Why do the Middle East Arabs have such huge investment here and employ so many Irish people? For future generations, if we can plan towards that increase in the betting tax then, once and for all, as the previous speakers said, we can sit here and know we have an industry that not only generates enough funding to look after itself and grow to even greater strength but also, as Deputy Ó Cuív said, look after the gambling problems.

To finish with Dermot Weld, he brought in an American owner who had never been to Ireland but who ended up moving his headquarters from London and America and employing 300 people. That is just one owner who came to work with Dermot Weld.

Martin Heydon (Kildare South, Fine Gael)
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I thank the Minister, Deputy Coveney, for coming in. I welcome this significant increase in the investment in rural Ireland through the investment in the horse and greyhound fund. The Minister has outlined the economic activity of €1.1 billion from the horse industry and €500 million from the greyhound industry. That is economic activity in parts of rural Ireland where there is very little alternative and where there are no big multinationals employing people.

Senator O'Brien referenced foreign direct investment. At the Goffs sales, I was struck by the number of high net worth individuals who had flown in from all around the world to buy Irish horses. It is a product we sell that, if it was in some different sphere, would probably have even more supports from the IDA. Rather than feeling in any way uneasy about how he would explain this to people in Ireland, Deputy Ferris should recognise it is a very good news story that we can tell. It is the Government supporting 14,000 jobs, although I know it was 16,000 not long ago and over 20,000 some time before that. There is no reason we cannot get back to 20,000 jobs but that will need a more sustained period of investment.

In recent years, due to the economic circumstances, we have had a situation where the money has been a matter of survival for the racing industry. We want to get back to a point where it can plan and grow, and the industry needs more medium-term planning. There are currently capital projects in my own constituency, of which the Minister is aware, and we have managed to maintain that momentum. I am pleased Deputy Ó Cuív is supportive of the industry and the motion before us, considering Fianna Fáil's proposal in recent years that it would cut the horse and greyhound fund by €10 million, which would have been catastrophic.

The acknowledgment is here. While not a hypothecated tax, the link with the Betting (Amendment) Bill is very obvious, and that is a link I will not let go of if the Department of Finance ever tries to come back in. There was never a justification for dropping the betting tax from 2% to 1%, but I accept the Minister, Deputy Noonan's point that he wants the Betting (Amendment) Bill, and the extension to offshore and online betting, bedded in first, and we can then look at the overall rates. I hope we will be having that discussion in the run-up to the next budget. I believe it is the right thing to do and that this would be very much linked with the industry and with increased investment into the future. I commend the Minister on his work to date.

Andrew Doyle (Wicklow, Fine Gael)
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Thank you. I believe the message is coming loud and clear from the committee that we are not afraid to put on record the point that we would like to see the revenue stream from the Betting (Amendment) Bill increased to make the revenues garnered from betting sufficient to fund the horse and greyhound fund itself. There is no reason we should not make that point every year until it does happen, and it is something we are not shy about making clear.

I would like to acknowledge the Minister's thanks to the committee for the work we did on the pre-legislative scrutiny of the horse racing Bill and, linked to that, is it envisaged that the legislation regarding Bord na gCon will take the same route? We learned a great deal by doing it. It was time-consuming. We flushed out a number of conflicts.

Later on this afternoon there is a meeting of the working group of the Chairs of the committees and one of the issues on the agenda is pre-legislative scrutiny. I think it is to finalise protocols because this committee was one of the pilots. We will know better when the legislation comes into the House how quickly or otherwise that legislation proceeds through the Houses as a result of having gone through the pre-legislative scrutiny process. I do not know if there is anything the Minister wants to respond to.

Simon Coveney (Cork South Central, Fine Gael)
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Everyone here has been very supportive of these two industries. This is a 26% increase in one year. In the context of the budgetary challenges we have been facing, that is a pretty extraordinary increase in one year, and it is on the back of virtually doubling the revenue stream we will get from betting tax next year. The Department of Finance is predicting that there will be an extra revenue stream of €25 million. We are actually only bringing in €25 million from bookmakers at the moment from betting tax. One must look back as far as 2007 to see a revenue stream of more than €36 million coming from betting tax.

We are now going back to raising much more money from betting tax because we are bringing into the tax net the way in which many people bet remotely now, on their phones or computers. The Minister for Finance, Deputy Michael Noonan, was anxious that we would get that system up and running before we had the debate on the appropriate rate. The focus within the Department of Finance has been getting remote betting working from a tax point of view. A number of countries which have tried to do this and failed and others which have done it somewhat successfully are watching this carefully but actually getting a revenue stream from online activity is never straightforward, so it was important to work with the industry here and get a system that functions. The Minister has made it clear that he is open to a debate on the rate. My views on the appropriate rate for betting tax are well known. I have often spoken about the need for 2% or 3% or even a higher percentage but the important thing is that we get it working. As a result of what the Minister has done, we now see an increase of €14 million going into this industry. Let us welcome progress when it is there. We have seen a doubling of the revenue stream coming from betting and we can now have that debate on the appropriate rate in future.

The betting tax provisions have had to go through the European Commission in respect of state aid rules. This has not been straightforward. It has gone to the Commission twice, because using a portion of or all betting revenue to support an industry can be and is challenged by other countries under competition rules and state aid rules. However, the outcome for the industry has been very positive this year and we will hopefully build on it next year. I take Deputy Ferris's point that there are many pressures on expenditure at the moment, so this sounds like a great deal of money for a sector to people who do not understand the sector and its significance. That is why we all have a responsibility to explain why this sector is so significant and so important for parts of Ireland that often do not have much else. I hope people can support what we are doing and we will come back and have a discussion on the rate issue at a later date.

Andrew Doyle (Wicklow, Fine Gael)
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On the point of the pre-legislative scrutiny, one of our recommendations was that there would be a second seat for people from the industries' committee on the board of Horse Racing Ireland, which would include the employees of the stable industry, which is the biggest cohort of people working in the industry by far. Deputy Ferris made a reference to people who work in big and small yards all over the country and they amount to by far the most significant number of people, so we have included that in our recommendation. We hope the Minister and his officials take that on board.

At the conclusion of this discussion, can I take it that the joint committee recommends that there should be no further debate on the motion by Dáil or Seanad Éireann? Is that agreed? Agreed.

That concludes our consideration of the motion. In accordance with Standing Orders, a message will be sent to the acting Clerk of the Dáil and the Clerk of the Seanad, stating that this committee has completed its consideration of the motion. I propose that a report on the proceedings of today's meeting be laid before both Houses of the Oireachtas. Is that agreed? Agreed.