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.