Shane McEntee (Meath East, Fine Gael) | Oireachtas source

I am responding on behalf of the Minister for Agriculture, Food and the Marine. It is crucial that this matter be raised at this time because, as Deputy Heydon stated, the Government has a role in providing annual funding. The objective is to secure the 16,000 jobs involved in the racing industry. It would be nice to be able to say we will allocate so much for the next five years but that is not how it will happen. We will just have to fight for funding on a year-by-year basis.

The Deputy referred to the betting tax revenue of eight or nine years ago. There is much more betting in the State today, yet we are receiving half the tax revenue. We are trying to remedy that. I hope that by the end of next year, the results of our efforts will be evident.

The bloodstock industry is significant to this country. It is estimated to underpin 17,350 jobs and almost €1 billion in economic output. Exports, to 35 countries, were worth some €157 million in 2011.

Horse Racing Ireland, HRI, a commercial State body, was established under the Horse and Greyhound Racing Act 2001, which dissolved the Irish Horseracing Authority and extended the Irish Horseracing Industry Act 1994. HRI is charged with the overall administration, promotion and development of the industry with a funding mechanism established under statute.

The horse and greyhound racing fund was established under section 12(1) of the Horse and Greyhound Racing Act 2001 for the purpose of giving support to the horse and greyhound racing industries. In the period 2001 to 2012, a total of €786.75 million has been paid from the fund to the horse and greyhound racing industries in accordance with the provisions of the Act. Moneys are paid out of the fund in the ratio of 80% to HRI and 20% to Bord na gCon, as specified in section 12(6) of the Act. The total paid from the fund to HRI in the period 2001 to 2012 amounts to €629.4 million. State funding provided through the fund is pivotal to the development of the horse and greyhound racing industries.

The initial funding model for the horse and greyhound racing fund provided that the fund would each year be financed by an amount equal to the revenue from excise duty on off-course betting in the preceding year or the year 2000, increased by reference to the consumer price index, whichever was greater. This formula applied for the years 2001 to 2008 and was abandoned in 2009. The approach employed since 2009 has been for the Minister with responsibility for horse racing legislation to decide on the amount to be provided to the horse and greyhound racing fund, subject to the approval of both Houses of the Oireachtas.

At the outset, in 2001, the fund was financed entirely in line with the proceeds of betting duty, amounting to €58.9 million. However, because of the decrease in the duty collected on betting and the migration of betting to online tax-free platforms, an increasing amount of Exchequer support was required. The Exchequer contribution reached a peak of €39.9 million in 2008 and decreased to €29.3 million in 2012.

Given the importance of the horse racing industry and the challenges it currently faces, the Minister, Deputy Coveney, commissioned Indecon, following a public tender earlier this year, to conduct an independent review of certain aspects of the horse racing industry. Topics covered included, inter alia, legislation, governance structures, funding and management of the industry and the scope for streamlining the functions assigned under legislation to Horse Racing Ireland and to the Turf Club.

In its report, Indecon highlighted the importance and potential of the horse racing industry and affirmed that, with appropriate policies and structures in place, the sector can contribute significantly to the economic and social development of the country and the expansion of employment.

The Minister for Finance has published the Betting (Amendment) Bill, which, when enacted and implemented, will increase the yield to the Exchequer from betting duty. The Minister for Agriculture, Food and the Marine, Deputy Coveney, made clear his intention to address the other recommendations contained in the Indecon report. In this context, he intends to bring forward in the new year the necessary legislative provisions for the changes in the board and statutory committees of HRI. He also requested HRI and the Turf Club to establish a streamlining task force with a view to achieving the savings in administration as identified by Indecon. He is aware that this group has since been established and considers completion of this exercise an important prerequisite to future funding decisions.

Additional information not given on the floor of the House.

Deputies will be aware that, despite the current very serious budgetary circumstances and in recognition of the importance and potential of the horse racing industry, the allocation to the horse and greyhound fund was not subject to any significant reduction last year. The allocation for next year will be decided in the context of budgetary decisions. While the need for a secure funding model for the sector is recognised, the current budgetary situation places considerable constraints on commitments which can be made at this time. In this context, it is also important that the sector seek to explore maximising commercial funding possibilities, as recommended by Indecon. For the Government's part it will continue to pay particular attention to the development of the sector and the range of measures in train will ensure it can remain a flagship industry for our country.

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