Seán Barrett (Dún Laoghaire, Fine Gael)

I wish to devote the few minutes I have to speak on this to the provision in the Finance (No. 2) Bill which raises the betting duty from 1% to 2% and to point out that, of all the major racing nations, Ireland is the only one that does not have a direct levy on its betting industry directly allocated to its racing industry. However, in terms of relative economic importance racing and breeding are far more important to Ireland than any other racing nation.

When the fund for racing was created in 2000, a direct link between the betting duty and racing was established. A limit was placed on the absolute amount that could be transferred to racing and this limit was reached in 2004. It was then raised and the new limit will be reached in 2009. The spending of the fund is controlled by Horse Racing Ireland, HRI, a body established by the Government. Even the 2% levy will leave the contribution to racing from the betting and gambling industry far below the levels in other major racing nations in relative and absolute terms.

It is essential that this funding is copper-fastened and that the industry does not have to go back to the days of dependence on annual Government handouts. Without the assurance of continued funding, HRI will be unable to plan beyond a one year time horizon and it cannot enter into any form of capital expenditure plans or commit to any borrowing to fund such projects.

As a result of the cut in funding, the long overdue redevelopment of the Curragh racecourse, which is home to Ireland's most high profile races and offers tourism and other benefits, has been put in doubt. The tax revenue or buoyancy from such developments would far exceed the amount of grant in any one year. This is crazy.

Conforming to international practice and directly linking the 2% betting levy to racing would also address the mistaken belief that taxpayers fund racing. It will also reinforce the message that the industry is self-funding, self-sustaining and more than self-financing. It is fair and reasonable that beneficiaries and consumers of the industry's product should support it, and be seen to do so.

In the budget for 2009 the Government announced a reduction of 9.5% for racing, irrespective of the level of duty collected from the betting industry. This was one of the most aggressive cuts in the budget and was in spite of the funding being limited to inflation since the year 2000. Retaining this limit would have kept increases far below the level of increases in all other spending areas. The reduction also came against a background of increases in betting turnover never seen during the same period.

It is important to note that despite the gaming industry's failure to produce figures, almost all turnover through betting shops is from horse racing and not other sports. Gambling through telephone, Internet and betting exchanges, which is where turnover on other sports is mainly channelled, does not contribute to betting duty because the companies base the computer servers in offshore locations to avoid taxation. This is unfair and unreasonable. Those who bet via the Internet or by telephone exchanges do not contribute anything towards the levy or towards the racing or breeding industries.

The Irish breeding industry exports 85% of its produce, unlike its main competitors who have large home markets for their output. It is vital for the industry that our reputation as a producer of high quality bloodstock is maintained. One of the key ways we can ensure this is by maintaining the reputation of our racing. Only by continuing to attract top class overseas competition to our major races can we do this. This means having prize money at internationally competitive levels; otherwise, the committees in charge of grading races will downgrade our top races and, as a result, the rating of our entire industry.

The growth of the number of horses in training since the introduction of the fund is 41% and this has resulted in an increase in tax revenue to the State which far outweighs the amount of money paid out under the scheme. Furthermore, the Irish breeding industry, unlike that of other nations, is primarily export-oriented with more than 85% of thoroughbred horses bred here being exported and thus earning substantial revenues for the State from foreign income. Ireland is the third largest producer of thoroughbred foals. Horse racing and breeding are significant, export-oriented rural industries which account directly for 14,850 jobs and one in eight jobs in the agriculture, forestry and fishing sector. This should not be forgotten.

Racing relies on the rearing and husbandry of thoroughbred horses and involves enormous input from full-time professionals, including trainers, jockeys, work riders, grooms, vets, farmer breeders, racecourse managers, racecourse employees, transport staff, security staff, integrity services, stud book and registry staff and so on. All of these people contribute in no small way through their PAYE and PRSI payments.

It is important to specify clearly that the racing industry, including breeding, in this country does not depend on handouts from anybody. It is an industry in its own right and should be respected as such. For this reason, I respectfully suggest that because of its importance as an industry, it does not belong in the Department of Arts, Sport and Tourism where it is judged alongside other amateur sports and seen as receiving grants far greater than them. They should receive a fair level of support to promote sport but in this instance moneys derived from a betting duty were supposed to go directly to the industry which, in return, would develop and contribute to the economy. However, the income from the betting levy goes into the regular funds of the Department of Finance and is not considered as income of the Department of Arts, Sport and Tourism. Therefore, if we examine the figures of the Department of Arts, Sport and Tourism, we find a large sum of money allocated to the racehorse and breeding industry. This gives a very wrong impression to the public, which is unaware that the original idea was to allow the income from the betting duty offset the grant allocated to the industry. I wish to avail of the opportunity to correct the impression given on a regular basis, sometimes from the House but also through the media, that the breeding and horseracing industries are treated preferentially compared with other sports. It is not recognised that we are dealing with an industry rather than a sport, which provides 14,850 direct jobs. This amounts to one eighth of the total amount of jobs in the agriculture, forestry and fishing sectors. I seek appropriate recognition for the industry and the contribution it makes to the economy.

See this speech in context