Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

It is not the best way to finance the State. Studies recently done by lecturers in University College, Cork, have suggested that the national lottery is socially regressive as the least well-off play it most and pay the most, although they do not receive the same amount of benefit as expended on lottery tickets. The good causes which the lottery finances do not adequately compensate for the cost or expense of buying lottery tickets in working class areas and poorer sections of the community. We should consider this study as the lottery is now established, whether the idea was good, bad or indifferent, and it has become a means to fund or otherwise resource good causes of various kinds. There is no doubt that it has done that in many areas, including sports, community development, heritage, tourism and transport. It has undoubtedly provided significant benefit to all sorts of groups and good causes. We should nevertheless examine more closely the issue of where the money that is generated is being targeted. Although many people play the game, it is played more, with more money spent, by people with the least.

We should be honest because to a certain extent the appeal is precisely to people who are struggling in the hope that a big win in the lottery might get them out of a life of struggle and toil, or just about being able to manage to pay the bills or the mortgage or look after the kids. The attraction is greater to the least well off, and the statistics and figures bear this out. If this is where most of the expenditure on tickets is coming from, most of the benefit for good causes should go back to those sections of society that are less well off.

Given that the lottery is established and is probably here to stay, the Government's position is that nothing is changing with the lottery licence. It would have been put out to tender again and whoever offers the best deal will get it. There is no big change in that regard, although we will get a bonus of financing the children's hospital. We should be absolutely clear and we all want to see the children's hospital being built, and it should be funded as a matter of priority. To attach the two issues is not sufficient to justify a move to privatise a State asset for the benefit of people in the private sector.

Ultimately, the losers will be the economy, society, the retailers who act as lottery sales agents and the players of the lottery who, as I noted, tend to be disproportionately centred in the less well-off sections of society.

When the lottery was privatised in the United Kingdom, Camelot, one of the companies in the mix for our national lottery licence, won the contract and significantly increased the price of lottery tickets, to the point that it provoked a major boycott of the lottery. As a private company interested in profit, Camelot decided to jack up prices because it believed it had a captive market of people who wanted to play the lottery. As is the case with most private corporations, it also started to pay enormous amounts of money to its executives. In one year, Camelot set aside £8 million to pay bonuses to those at the top of the company. As is usually the case where there is a large cash cow, the corporate executives at the top milked the British lottery for everything it was worth. There is no reason to believe this will not occur under the new terms the Government is proposing for the award of the national lottery licence.

Significantly, the Government is proposing to allow for an annual profit line, whereas the current position is that An Post, a semi-State company, receives €2.7 million per annum for managing the national lottery. We know how much An Post receives under the licence, whereas under the new terms it will be possible to adjust the annual profit line. If the company awarded the licence makes such an adjustment, there is no doubt it will take a bigger slice of the cake, boost salaries for executives and apply pressure to increase the price of lottery tickets. These changes are inevitable if the licence is awarded to Camelot or another private corporate interest.

The Government has tried to argue that under its proposal it will not make any difference if An Post is awarded the national lottery licence or if it goes to Camelot or a similar company. There is, however, a big difference because as a semi-State company, the activities of the former in respect of how it runs and manages the lottery are subject to a much greater degree of control by the Government, Minister, elected representatives and members of the public than the activities of a fully private, for-profit corporation.

Retailers are another group that could potentially be affected by a new dynamic operating in the lottery if it is run by a company such as Camelot. As I noted, the national lottery sales agents are concerned that the 6% of sales they receive may no longer be guaranteed.

In light of my concerns, I do not accept that it is a good idea to move towards what is effectively a full-scale privatisation of a State asset. The Government will, I am sure, argue that the sale of the national lottery will deliver upfront cash for the national children's hospital. The figures in the Bills digest provided by the Library and Research Service show there is no reason the children's hospital could not be financed through current contributions to good causes from the national lottery. In 2008, 2009, 2010 and 2011, the national lottery provided €267 million, €263 million, €243 million and €231 million, respectively, to good causes. For the past five or six years, therefore, it has consistently provided roughly €250 million to good causes. There is no reason to believe, given the consistency of these figures, that the national lottery will not continue to provide funding of this magnitude to good causes, especially given the potential for expansion through online sales and so forth. If it is certain that this sum will be generated for good causes every year, we could earmark €50 million per annum for five years to pay the estimated €250 million cost of the children's hospital. Why can we not do this and maintain the current arrangement under which the national lottery is run and managed by An Post? This option has the advantage of having a set management fee of only €2.7 million compared to the proposed moving profit line, which will benefit the likes of Camelot and other private interests.

We can secure a better deal by simply deciding to allocate €50 million of lottery revenue towards the cost of financing the children's hospital. The Government's argument that we need to go down the road of privatisation to finance the children's hospital does not stack up because this objective could be as easily achieved by maintaining the status quo. Choosing the latter would also allow the State to maintain more control of the national lottery and allay the concerns of retailers and the workforce of the national lottery. The latter is another significant group in this process and they are deeply worried about their future as a result of the move to award the contract to another entity.

The Government does not need to proceed with its proposal. Its argument about the national children's hospital is a red herring because, as matters stand, the hospital could be built using national lottery funding. If the Minister of State was not aware of that, he is now because I have just told him that it could be achieved by allocating €50 million of the €250 million we are virtually guaranteed to receive every year to the hospital project for five years.

There is no need to dispose of this State asset. The national lottery workforce and An Post have done a good job and we can get a children's hospital without messing with a formula that has worked. The Government should not let its ideological inclination towards privatisation colour the fact that the current deal is fine. We do not need to go down this route to get a hospital or continue to finance the good causes funded by the national lottery.

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