Tuesday, 19 October 2004
Horse and Greyhound Racing Fund Order: Motion.
That Dáil Éireann approves the following Order in draft:
Horse and Greyhound Racing Fund Regulations 2004,
a copy of which order in draft was laid before Dáil Éireann on 22 September, 2004.
The Government is committed to the ongoing development of the Irish racehorse and greyhound industries. In 2001, following the establishment of the horse and greyhound racing fund under the Horse and Greyhound Racing Act 2001, a major period of development of both the horse and greyhound racing industries commenced. In the four years to date, this fund has provided a guaranteed level of funding to Horse Racing Ireland and Bord na gCon, which by the end of 2004 will amount to €206.4 million and €51.6 million, respectively. This money has been well invested leading to undeniable benefits for both sectors and has marked a revival of interest in both sports, to the benefit of the economy. It has not only helped towards providing some top class racing venues and facilities, but it has underpinned significant employment in both industries and the prize money it has facilitated has been an important boost for both horse and greyhound breeding.
The reason for bringing these important draft regulations before the House is to enable the horse and greyhound racing fund to be continued to allow Horse Racing Ireland and Bord na gCon to progress their important development plans, which have already yielded tangible results but which require a further period of investment to reach completion.
When I presented these regulations to the Joint Committee on Arts, Sport, Tourism, Community, Rural and Gaeltacht Affairs on 6 October last, I was heartened by the cross-party support the motion received. In particular, spokesmen from Fine Gael and Labour gave the motion their complete backing and were fully supportive of the funding that both the horse and greyhound sectors have received in recent years and the importance of its continuation through the horse and greyhound racing fund.
Under the provisions of the Horse and Greyhound Racing Act 2001, the horse and greyhound racing fund is guaranteed a level of income based on accrued excise duty on off-course betting, subject to a minimum level based on the 2000 level adjusted for inflation. Any shortfall in the amount generated by the excise duty is made up by direct Exchequer subvention.
Under the existing legislative provision an aggregate total for the fund is set at €254 million, £200 million. This limit will now be reached before the end of 2004. Therefore, unless action is taken, the fund will lapse and support to these industries will cease, leaving both the horse and greyhound industries facing severe financial difficulties. In these circumstances, both industries would be forced immediately into reducing significantly their current levels of activity and I am convinced their long-term viability would be precarious.
The development strategies of both Horse Racing Ireland and Bord na gCon are predicated on the continuation of the fund and neither are in a position to generate enough income to replace the fund in the short term. In the discussions with the racing bodies leading up to the establishment of the fund in 2001, security of funding over time was a central issue, and the 2001 legislation sought to address this matter. Failure to ensure the continuation of this fund while neither industry has yet completed its development plans would be a breach of faith.
Since 2001, income from this fund has been used to increase prize money levels and meet administration and integrity costs, in addition to a programme of capital investment which has underpinned a growth in both sectors. The growth of both these industries has also helped generate and support significant employment and income, particularly in rural Ireland in a period when direct farm employment has been in decline. It is estimated that the bloodstock sector provides 4,700 direct full-time job equivalents with a further 11,875 full-time job equivalents arising in the racing and betting industries. The total number of people earning an income from horse racing, betting and breeding, both full and part-time, including those employed in related industries, has been estimated at 25,000 or approximately 1.5% of the country's workforce. Horse racing is also a significant element of Ireland's tourism product, attracting an estimated 50,000 overseas visitors a year.
Racecourses at Limerick, Cork, Fairyhouse, Listowel and Galway have all seen major refurbishment. There are plans for major developments of horse racing's flagship tracks at Leopardstown and the Curragh with the purchase of strategic land attached to Leopardstown racecourse. There are also plans to develop Ireland's first all-weather racetrack.
The recently published Indecon report validates the economic contribution made by the bloodstock and horse racing industry in Ireland. In 2003, the total attendance at about 280 horse racing meetings rose to more than 1.3 million people, generating more than €23 million in gate receipts. Off-course betting in 2003 totalled €1.9 billion and total on-course betting was €237 million. The gross output of the breeding sector is estimated to be worth €330 million per annum. Bloodstock production now accounts for approximately 10% of all livestock production in Ireland and 4.4% of total agricultural output. Ireland is now the third largest producer of thoroughbreds in the world and accounts for more than 42% of all foals born within the EU. These statistics serve to underline the international importance of the Irish bloodstock and horse racing industries. While it is estimated that the gross cost of the tax incentives for the thoroughbred breeding sector is around €3 million per annum, conservative estimates put the combined tax contribution of the stallion and broodmare sector to the Irish economy at €37.5 million.
The success of Bord na gCon in repositioning greyhound racing as an attractive night time recreational experience can be attributed to a significant extent to the standard of the facilities available at new or refurbished greyhound stadia in Dundalk, Galway, Lifford, Cork, Newbridge and Waterford. In 2003, attendance figures once again achieved double-digit growth, with more than 1.125 million people attending greyhound racing in Ireland, generating on-course betting turnover of €118 million. This is an increase in attendance of 25% since the turn of the millennium and this growth is expected to continue with future plans to build a new stadium at Limerick and complete stadium refurbishment works at Clonmel, Enniscorthy, Kilkenny and Thurles. The industry currently provides employment of 600 direct full-time jobs and 10,000 indirect and part-time jobs, and an estimated 10,000 bed-nights in Irish hotels and guesthouses are directly generated by greyhound racing activity.
Given their successful track record, both horse and greyhound racing deserve a continued period of support to enable them to reach their full potential. The fund has reached its limit under the existing provisions. However, there is a provision in the Horse and Greyhound Racing Act 2001 to allow an increase of the aggregate total of the fund. This may be done by regulations made by the Minister for Art, Sport and Tourism with the consent of the Minister for Finance, together with a resolution approving such draft regulations passed by both Houses of the Oireachtas. The draft regulations now before the House, which have the consent and support of the Minister for Finance, provide for an increase in the aggregate limit of the fund from €254 million to €550 million. This would allow for continuation of the fund for a further four-year period to 2008. During the next three years, a shortfall in the excise-generated funds will require a decreasing level of subvention up to the end of 2007, at which point predicted rises in the volume of off-course betting will see the fund revert to being fully financed from betting.
I ask Members of the House to join me in supporting this motion to ensure the continuation of this system of funding, which gives both the horse and greyhound racing sectors a secure financial framework for the next four years to enable them to bring to conclusion their major development initiatives. It is vital that these sectors continue to receive support in terms of their impact on the 35,000 people employed, both directly and indirectly, and the significant levels of tourism generated. However, just as important are the dozens of high quality racing facilities all over Ireland providing hundreds of thousands of ordinary people with an enjoyable day out at the races and a fun night at the dogs.
I supported this motion when it was presented to the Joint Committee on Arts, Sport, Tourism, Community, Rural and Gaeltacht Affairs and I support it again today. The horse and greyhound racing fund was established under the Horse and Greyhound Act 2001 and by the end of 2004 Horse Racing Ireland will have received approximately €206 million from it and Bord na gCon, €51.6 million, leaving an Exchequer funding requirement, I understand, of about €45 million. I believe this is good value for money, judging from the results of the Indecon report and income figures from Bord na gCon over that period.
I am glad the Minister has stated that the fund will be self-financing and cost-neutral, requiring no Exchequer expenditure by 2008. Judging by the current increase in off-course betting, at about 20% per annum, a rate of 15% a year dropping down to 5% would guarantee the scheme is cost-neutral by 2008. I hope the use of taxpayers' money to boost this fund at that time would not then arise, if the trend continues. People should realise that the off-course betting market employs approximately 3,500 workers. This would not occur without horse and greyhound racing, and the jobs would not be there. There is the question of the redirection of taxes to support the greyhound and horse racing industries. This is commonplace throughout the world and is not peculiar to Ireland. We have thriving horse and greyhound industries because of the few incentives we have.
A report in the Sunday Independent of 17 October 2004 stated that last January the British horse racing board introduced incentives which give an extra 25% prize money to British horse breeders. British-bred fillies and mares running and winning under national hunt rules get 50% more than Irish runners in the same race. That surely is a major incentive. In France transport costs to races are refunded to native horse owners while French-bred winners get up to 75% extra prize money. Both Italy and France run closed races for native-bred horses, which critics suggest amounts to de facto protectionism. I notice in the Indecon report that in Kentucky, for example, which is a leading breeding location, the state legislature is considering the introduction of a sales tax exemption. When one looks at countries such as Australia and New Zealand as well as other states in America, the current trend is to give incentives to the horse racing and greyhound industry, especially to encourage breeding. Ireland is not unique in this regard.
As regards the greyhound sector of the industry, with which I am most familiar, this generates approximately €275 million annually and provides in excess of 2,000 full-time equivalent jobs. These are figures recently provided by Bord na gCon. The PAYE and PRSI generated is anticipated to exceed €8 million annually, with significant Exchequer revenues from VAT on fees and professional services as well as the costs of development expenditure by owners and breeders and the reinvestment in facilities to capitalise on this buoyant industry.
The sale of greyhounds generates approximately €40 million and this provides an important lifeline to supplement on-farm incomes, thereby preserving many farms. As we know income from mainstream farming is dropping. A number of farmers are supplementing this income by breeding and selling greyhounds. In many cases, they breed and sell horses as well. As the Minister pointed out, there has been major development in the provision of tracks across the country. I am aware of the advantages Tralee track has for the tourism industry in Kerry as well as for the greyhound fraternity and the fact that it has become a major social centre, with young and old enjoying weekend racing and whole families attending. This is being replicated across the country. People do not fully understand the social impact of greyhound racing because it is an evening sport. This is true of horse racing also, but particularly greyhound racing.
There are fine stadiums in Shelbourne Road and Harolds Cross in Dublin and throughout the country, as the Minister pointed out. The extension of the fund will enable Limerick to be built, for which a figure of €10 million has been earmarked. A figure of €4 million has been earmarked for Enniscorthy, €5 million for Kilkenny, €3 million for Clonmel and €2 million for Thurles. These are all important facilities which will give employment to people from the locality and will benefit people from all walks of life. In addition, there is a major employment factor for part-time workers and those currently without jobs. Therefore, it is not just the preserve of one sector of the community. Everybody benefits from it.
Without such investment over the past ten years, the industry would not have grown to the extent it has. The in-depth report by Indecon on the Irish racing industry shows that more than 13,000 people are employed in the horse racing sector. That is a considerable number and it should be recognised.
I hope advances will be made in getting the Northern Ireland Assembly functional again. I ask the Minister to promote the idea of having one greyhound board for the whole country. That is very important. There are just two tracks in the North, in Derry and Ballyskeagh, both of which are under funded. We are operating different regulations and control systems and it is important the Minister would promote the idea of having one greyhound board for the whole country. I will support him in doing that. I appeal to him to do that in case I do not get an opportunity to do so for some time.
I thank Deputy Deenihan for allowing me to share his time. I welcome the Minister to the House.
I stress the importance of the horse and greyhound racing industries and the money they generate, both on and off the track. In recent years Ireland has led the way in the horse racing industry. One only has to think of the many famous Irish horses that have either been sold abroad or raced throughout the world. It is important that we give the appropriate recognition to both industries.
There is a huge greyhound industry in County Wexford, and I am aware the Minister has visited the Enniscorthy greyhound track. To speak briefly on local politics, in 2001, the Enniscorthy greyhound track was approved for a grant from Bord na gCon of €3 million for major refurbishment works, which the Minister referred to in his contribution. I welcome that measure but with the increase in inflation over recent years it will now cost in the region of €5 million or more to do this work. When granting future funds I ask the Minister to consider Enniscorthy to ensure the proper refurbishment work is carried out in one project and not over a long period. The Minister visited Enniscorthy greyhound track and saw the fine work done there. In that regard, I compliment the management, and Mary Nolan, of Enniscorthy greyhound track on the great work they do.
I supported this legislation on Committee Stage and the measure the Minister has brought before the House today. Listening to Leaders' Questions and the Order of Business one could be concerned about funding for other sectors of society but we are speaking today about the greyhound and racehorse industries.
Coming from Kildare, where the racehorse and greyhound tracks are a major employment factor, one can see the benefit to the Exchequer from a tourism point of view, particularly in the case of horse racing. We have the Punchestown and derby festivals as well as the classics on the Curragh during the year. The major benefit of these events to Kildare is obvious, as is the spin-off benefit to hotels, bed and breakfast premises, taxi and other services that are part of such occasions.
There is concern in the Labour Party that Exchequer money, apart from that ring-fenced in respect of off-course betting, is being used in this regard. I understand the position people take on that but the other side of the coin is that, within the time frame the Minister is putting in place in this legislation, the greyhound and horse racing industries will be self-sufficient within that three to four year period. We should draw that conclusion from the legislation. I ask the Minister to give a guarantee to the House that this funding will be ring-fenced and if a situation arises whereby any funding other than that generated from off-course betting is needed, he will seek a further direction from this House. In that way, the concerns of many people about the availability of hospital beds, waiting lists and so on, which have been expressed not only in this House but across the country through concerned groups, will be addressed because the items covered by this legislation were properly debated in the Dáil and the Seanad.
In examining the progression of the greyhound and racehorse industries in recent years one can reflect on the improvements in the facilities, entertainment value and location for the ordinary supporter of those industries. It is fair to believe, therefore, that if facilities have improved for the ordinary supporter they have also improved for employees in the racing industry. It is imperative that continues and that the canteen and rest room facilities etc. for stable boys and others involved in the greyhound industry are improved in line with the overall improvements and developments in places like Galway, the Curragh, Naas and so on.
Everyone should benefit from this legislation. We will see an increase in off-course betting because of the improvement in the standards of races as a result of the funding we are able to put in place, and we will attract overseas interest in our home-bred horses and greyhounds. In that way the Exchequer will benefit greatly because of increased tourist numbers. The figures in respect of Punchestown have improved on a yearly basis to such an extent that it is now approaching the position where it will challenge Cheltenham as the prime national hunt facility in the world. If we do that, more funding will be generated for other areas such as hospital beds, medical cards and so on. I ask the Minister to ensure that in ring-fencing this funding we do not move to direct Exchequer funding, and that such a measure would be debated in this House.
Deputy Deenihan spoke about the major improvements in the greyhound industry. I saw the effects of those improvements throughout the country. I visited the greyhound tracks in Galway, Tralee, Newbridge and Shelbourne Park — I attended the track in Harold's Cross the other night — and one can see the major benefits to the ordinary person who can enjoy himself for a small fee. People can enjoy running a dog or supporting a friend who has a runner. I was amazed to see many young people in Shelbourne Park the other night, many of whom had formed groups to purchase a dog and in that way enjoyed having runners at these races.
I understand the view of some people that horse racing is an elite sport enjoyed by those in the upper echelons of society, who have put Ireland on the international scene, but there is more to it than that. I live in Kildare where there is a major emphasis on horse racing and the greyhound industry and I see how the county has changed from being agriculture based to horse racing based. Because of improvements in machinery we do not have the same level of employment in farming as we did in the past. That development has transferred to the greyhound and horse racing industries and that is reflected in the employment figures in Kildare, which have decreased dramatically in recent years.
This step forward will result in a major improvement in facilities and Exchequer returns. It will also boost tourism figures because we will have the facilities, race meetings and standard of horse and greyhound to attract overseas investment and visitors. Due to the implications of this and the views within my party I will not support the motion but will abstain from voting. As I said at the Oireachtas Joint Committee on Arts, Sport, Tourism, Community, Rural and Gaeltacht Affairs, while I support the Government on this motion I will not vote for it but will abstain. I fully support what the Minister said and the mechanisms used here to advance the greyhound and horse racing industries.
The Opposition call for debate on this issue today was not based on the premise that the State should not support the horse racing or greyhound racing industries. It does not deny that these industries have an economic benefit to the State, or that greyhound and horse racing give a great deal of aesthetic and recreational pleasure to the citizens. Instead, the Opposition wishes to question the Government's sense of priorities, given that the scale of the fund is so large and the annual increases proposed up to 2008 are larger than the Government's savage 16 cuts in social welfare last year. When that sense of priority exists within a government it must be questioned.
Politically, this decision was a parting gift from departing members of the Cabinet, the then Ministers for Finance, and for Agriculture and Food. It is indicative of the culture of this Government in particular whose support for the horse racing industry led to the fiasco of the Punchestown event centre. It is a culture in which decisions are made for the benefit of certain people without following proper procedures, and taxpayers' money is spent in a wasteful and even fraudulent way. Those who benefit from these policies gain not only by direct provision but by the absence of fair taxation policies, for example, for horsebreeders and those involved in the horse racing industry who, while benefiting most, are among the biggest tax exiles.
We should oppose measures such as this when they are on such a scale and are so inherently unfair. The lack of Government action on taxation for stallion fees is a scandal. The Government has put in place a measure such that no tax will be deducted from income earned but an assessment will be made by October 2005. Despite the fair distribution of taxation from the horse racing industry, those who benefit do so twice by receiving direct aid from the taxpayers and having no obligation to contribute to the taxpayers' fund.
The Green Party is concerned that because the Irish Coursing Club plays such a prominent role in registering greyhounds the organisation may again receive funding. We oppose any such move.
We support the provision of public funding for sport. Many race courses and dog tracks require this support, the absence of which would have a detrimental effect on their viability, as well as on the employment and social benefits accruing from them. Funding over the last four years has improved race courses and greyhound tracks. I can vouch for this from my knowledge of Tralee greyhound park and race course. Were it not for generous support, particularly for the race course, the facility might have closed, which would also have ended the related social activities such as the festival, which the race course supports.
Ring-fencing of funds taken from betting tax is a good idea and might be a way to increase support for other sports too. I hope the Minister will take that on board. It must be ensured that these sports receive local support so that they will thrive, not just at the major venues and prestige events but also at the smaller events of which the wider public might not have heard. The investment has benefited places such as Tralee and Listowel, which has wide implications for the locality in terms of employment, revenue and tourism. The contribution of those events to the local communities, particularly the benefits the Listowel races bring to the town, and north Kerry in general, are significant. The contribution of the small farming community to greyhound racing and the income generated as a result ensures that members of that community actively involved in the sport improve their income and should be encouraged and supported.
We do not accept the argument that such funding is somehow taking away moneys that might be used in other areas such as health and education. To say that these sports are not entitled to State support is to take a very narrow view.
I do not support the motion in its present form because the Government has not put a proper and detailed case for committing this level of taxpayers' money in justifiable way. We need transparency with regard to the horse racing and the greyhound industries. I do not have time to discuss this in great detail but when a delegation from Bord na gCon came before the Committee of Public Accounts I asked very severe questions and was not entirely happy with all the answers. There remains a serious question about the regulation of that industry and whether the level of investment, which constitutes a large percentage of the total income, is justified.
Thousands of workers are employed in areas connected with horse and greyhound racing. Many unfortunately earn exploitation wages or are temporary workers and get a raw deal. It is undeniable that the privileged elites who deal with horse racing in particular, who own prize stallions and thoroughbred horses, have for decades been pampered and petted, particularly by Fianna Fáil-dominated Governments. As a representative of working class people I am scandalised that multi-millionaire stallion owners have tax-free profits from those activities while the stable lads and girls who work for them are taxed on the minimum wage. The Minister did not suggest today that this situation might end while he commits a further €300 million of taxes, including those from the stable lads and girls, to support the millionaires in the industry.
What distinguishes the horse racing industry is arbitrary in that leading Fianna Fáil politicians going back to Mr. Charles Haughey followed racing, were involved in breeding and selling thoroughbred horses, and hob-nobbed with the high rollers, including holders of Ansbacher accounts and others, who rolled over to Cheltenham in the early 1980s and 1990s to spend the money they should have paid in taxes. It, therefore, gave huge privileges to the industry. It is as arbitrary as that. Perhaps we are fortunate that their passion was not rearing budgies or parrots as every millionaire's mansion might have a State funded, tax free aviary attached to it. It might provide a better quality parrot for the Government back benches but that would be the only advantage. This type of privilege, over which the Government continues to stand, has to be challenged.
Every penny in taxation on the industry is to be put back to support and subsidise the top echelons, in particular. Workers in Aer Lingus who have paid more in taxes at certain points in the history of the airline than all the farmers in the State would be very happy to see a level of investment similar to this. Instead, an attempt is being made to kick 1,350 of them down the road by the Government at a time when they are presenting it with a €90 million surplus. Will we see the necessary investment by the Government to subvent these important jobs and communities as willingly as in the case of other sectors?
I would like to share time with the Minister. I would like him to have much more time to discuss this issue, but the transparency that Deputy Higgins wants concerns how the sum of €206 million was spent by the HRI as well as how the sum of €51 million was spent by Bord na gGon on the fantastic facilities that have been referred to by every other Member and at the committee a few weeks ago. What has been spent achieved absolute value for money. It is right that we should discuss this.
The Deputy referred to the issue of wages. He should look into the fact that recently the industries were able to come together and produce one of the best agreements possible because of the prize fund now in place due to Government support both for the greyhound and horseracing industry. It is to the credit of both the main bodies which are in charge of this funding that they have produced such facilities that are the envy of the world. The record attendances at greyhound race meetings are a recognition of young people marching with their feet in support of the industry and the facilities provided. It is fantastic that two of our most important indigenous industries can keep the very best stock because of the prize fund available. What better way to market Ireland than by using the horse and the greyhound? The Minister has linked the idea of 35,000 people working in marketing and tourism. He is absolutely right to allocate this funding.
I thank everyone for making a contribution to this thoughtful debate. Responsibility for Horse Racing Ireland was transferred to the Department of Arts, Sport and Tourism when the Government was elected. It is true that the outgoing Minister for Agriculture and Food did make an enormous contribution to the development of the greyhound and horseracing sectors, but Deputy Boyle is incorrect to state this was some kind of parting gift. I have no doubt that he would strongly support this measure as he supported the Act in 2001. The regulations will be signed by me as the responsible Minister and the Minister for Finance. There is little question that the industry has meant much to the economy. It has generated over €840 million in gross income in the last year and supports and maintains 35,000 jobs, both full-time and part-time.
I recognise that there will be those who will say we should have different priorities. However, it is also true to say we have to ensure we support sport and industry. These are not just sports, they are industries. In that context, the support the Government is giving to them is not just for the elite or any one segment of society. It is given to the thousands of ordinary men and women who depend for their livelihoods on them. It is also given to provide proper facilities for the more than one million who attend these sports every year.
Based on current estimates, the total amount in the fund for the period 2005-08 will be €290 million, of which 85% will be funded directly by way of duty on off-course betting. No one else will be asked to contribute. In other jurisdictions off-course excise duties have been completely eliminated. We have not done so because we want to invest in the industries. I fail to see why anyone could object to this money being spent on them.
It is true that we have seen massive developments in horse and greyhound racing facilities in the past four years. We ensured the industries grew. In renewing the fund we are ensuring they will continue to grow. Were we to take a different course, they would stagnate and the numbers coming to see horse and greyhound racing would fall, as would the number of owners and breeders. Clearly, the number of greyhounds and horses would also drop.
Stud fees and the taxes to be paid on them are entirely different matters which are in no way related to this debate.
The debate on the taxation on stud fees is appropriate to the budget, not to this fund which has absolutely nothing whatsoever to do with it. Anybody who thinks otherwise knows nothing about the fund.
It is also true to say we have an international reputation for horse-breeding of which we could not have dreamed even ten years ago. We are now recognised as one of the top three breeding nations in the world. Irish horses have excelled at various events across the globe to the extent that the Irish horse is now looked upon as one of the best anywhere in the world. The truth is, however, that as this is an island nation, it is becoming more difficult to attract good mares to the country. If there are incentives, one succeeds in building the industry. There are incentives for stallions, but the impression should not be given in this House, nor should anyone seek to create it, that this fund creates a tax-free status for anybody. That is incorrect, untrue, false and misleading. The facts are that the fund is about placing off-course excise duties in the horse and greyhound racing fund and supplementing it where necessary. However, all of the indicators are that 85% of the fund over the next four years will come from off-course excise betting duties.