Catherine Murphy (Kildare North, Social Democrats) | Oireachtas source

The horse racing industry is well represented in my constituency, Kildare North, which may have one of the oldest traditions of horse racing on the islands of Ireland and Great Britain. I became a blow-in in Kildare a very long time ago. When I moved there, I became acutely aware of the fact there is a complete language change when one moves to a county dominated by a certain industry, just as one hears nautical terms when one goes to a coastal area. In Kildare, one hears phrases such as "through the gap", "past the post" and "over the hurdle". These phrases are part of the language, as the Minister of State will understand. I have had to get used to it, unlike my constituency colleague, Deputy Lawlor, who is one of the few indigenous people who represent Kildare.

I am raising certain concerns because they were raised with me. I have spoken briefly to the Minister of State and will send him a more detailed note on this issue. A major issue for thoroughbred breeders is the foal levy. The three counties that are probably most affected by this are Kildare, Wexford - in respect of the National Hunt - and the Minister of State's county, Tipperary. Therefore, he will be paying some considerable attention to this. Most breeders are not associated with big stud farms; they are farmers. Approximately 90% of all horses are bred in this environment.

As the Minister of State is aware, the foal levy is administered by Horse Racing Ireland. It sets the rate each year. The proceeds generated are used to fund the Irish Equine Centre, Irish Thoroughbred Marketing and the Irish Thoroughbred Breeders' Association. It is perfectly normal that an industry should pay a percentage to support itself and its proper governance. However, it has come to my attention recently that the foal levy is designed in a very regressive way. The people who raised concerns with me provided me with many tables to show that. The levy takes proportionately more from the small-scale breeders than larger stud farms. As I stated, 90% of the breeders are farmers. The levy is based on the advertised fee for the stallion. I have a table with approximately half a dozen examples. An advertised fee of €1,000 attracts a levy of 3.5%. However, where there is an advertised fee of €40,000, the levy is 1.62%. Where the advertised fee is really high, the levy is 0.14%. Therefore, the levy decreases with an increase in the advertised fee.

I am told the advertised fee is rarely the fee that is charged. The main reason the levy functions in the way outlined is that it is calculated based on the advertised fee for the sire of the foal and not on the value of the foal itself. The point has been made to me that although one pays the fee, the foal might not survive or be of any use. Alternatively, it might not prosper. One could pay a fee on a foal that loses money. Therefore, the amount bears little relationship to the principle on which the fee is calculated. This seems to be a very serious flaw in the design of the levy. The upshot of the regressive design is that small breeders, such as those who breed perhaps two or three foals each year, pay far more proportionately than their better-resourced counterparts in the large stud farms. When one considers that approximately 70% to 80% of foals in Ireland are bred by small-scale breeders each year, one realises the very unfair nature of the levy.

It is interesting to note that the number of foals bred in 2006 was 12,500, while the figure for 2014 was 7,000. That is quite a dramatic change in terms of scale, as I am sure the Minister of State is well aware, and it will have a bearing on the regressive nature and viability of this levy.

It is unusual that most of these small-scale breeders are not members of the Irish Thoroughbred Breeders' Association, yet they continue to fund its existence. One would have to question whether that is fair when they are not represented in the design of this scheme. It is also not possible to claim a refund of levies paid in cases in which a foal is injured or dies. Again, this seems like a large burden on small-scale breeders. I spoke to a breeder close to where I live and he had a foal which he expected would realise a certain amount. However, the foal was frightened by a low-flying plane and ended up with some blemishes that dramatically reduced its value. That is the kind of thing that can happen. Would it not be better to calculate the value of the levy on the actual value of the foal in question? Is it not time to reorganise how the money is spent to give better representation to small-scale breeders who clearly make up the backbone of the industry?

The people to whom I have been talking are not opposed to the application of a levy, but they have proposals on how the Minister of State might rearrange it. They suggest that the proposed wording in the general scheme of the Horse Racing Ireland (Amendment) Bill 2014 should be changed from a foal levy to a sales levy, where the valuation can be established for each animal and the levy can be calculated on its true value. The proposal is to put a 1% levy on all animals sold by thoroughbred breeders in Ireland. In 2014, approximately €155 million worth of horses were sold in Ireland. That proposal would also give a proportionate figure in view of the fluctuation in numbers. In 2014, such a scheme would have brought in revenue of approximately €1.55 million to support the industry, which is almost €155,000 more than the present foal levy. In this way, everyone in the industry who sells horses at some stage - horses in or out of training, yearlings, mares, etc. - would pay a little, and that would bring in some extra revenue. With this system we would save in the region of €80,000 in administration fees. It would only take a piece of software to transfer the money to Horse Racing Ireland from the sales company. All other levies in the agriculture sector are paid at the point of sale, so people are asking why the bloodstock industry should be any different. That is a valid claim.

The second primary point I wish to make is not really unrelated to the first one. It has been highlighted to me that the institutional architecture of Horse Racing Ireland is a bit opaque and lacks accountability. There is a clear need for the chairperson of the board to have a statutory requirement to govern the organisation in line with Government policy. There is an awful lot that is positive about the horse racing industry, but there should be a symmetry and there is not. Government policy, the organisation itself and the sport can be going in separate directions. There is also a need to address the power imbalance by ensuring that at least one member of the board represents horse owners at all times. Those are the points that were made to me and that I have been trying to narrow down. I will certainly give the Minister of State some of the additional documentation that was furnished to me when I had discussions with the people involved.

I recently read some articles from 19th-century newspapers on the Punchestown races, including a report that detectives were dispatched from Dublin Castle to Punchestown, which provides a sense of the longevity of the sport in Kildare. The county has been known as the thoroughbred capital for a very good reason, and long may it continue.

I wish to echo Deputy Finian McGrath's comments on the death of champion jockey Pat Eddery. I extend my sympathies to his bereaved family.

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