Dáil debates
Thursday, 18 November 2010
Road Network
Horse Racing Ireland
5:00 pm
Chris Andrews (Dublin South East, Fianna Fail)
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I thank the Ceann Comhairle for the opportunity to speak on this matter. I originally tabled it last week. Since then various statements have been released by Horse Racing Ireland, HRI, KPMG and the Irish Bookmakers Association, IBA, each asserting different positions on the report on HRI's expenditure. For this reason, I will not focus on this but rather wider issues concerning HRI and betting tax generally which should be addressed.
HRI has refused to release information requested from it under the Freedom of Information Act. As stated in a response to a parliamentary question I tabled, HRI is subject to all the provisions of the freedom of information legislation. I know HRI rejected the original application for information stating the amount of information requested was deemed to be too large. I would like to see an effort made to attempt to facilitate the revised request from the IBA. Any disputes about spending figures etc. would be resolved by the release of this information.
Reports in the media today detailed suggestions for betting tax to be increased from 1% to 2% so the revenues raised can be used to fund the two activities, horse racing and breeding. The author of this report was Colm McCarthy, author of the bord snip nua report in which he recommended reducing funding the horse and greyhound fund by â¬16.4 million to â¬51.7 million. He stated this was still a substantial amount of Exchequer funding for the sector. Is there a possible conflict between these two stances?
I appreciate the value of the racing and breeding industry to Ireland and our economy. However, now is a time when organisations such as HRI must be able to prove a return for State financing. The Irish Sports Council which supports over 62 sports receives 24% less funding from the taxpayer than the horse and greyhound racing industries. Prize money in Irish horse racing is 60% higher, on average, than that offered in England. While I understand the arguments placed by both sides, we must have a clear picture of how State grants are spent by HRI.
We must ensure best value for money is achieved rather than indiscriminately granting greater funds though proposed tax increases, without ensuring this funding is being used to its best advantage. For example, many of the country's horse racing tracks appear to have not benefited from State funding. The all-weather racing track in Dundalk remains closed for half of the year.
HRI claims substantial prize money must be offered for Ireland to remain an attractive place for top-tier breeders to enter competitions. However, is HRI achieving best value for money? Could savings be made in areas such as salaries and administration, which could then be passed on to the prize money fund, rather than throwing money indiscriminately at HRI?
It is inherently unfair that a person who bets on soccer, rugby or boxing makes a contribution to HRI but not to the sports in question. This practice discriminates against other sports, much in need of funding.
Áine Brady (Kildare North, Fianna Fail)
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HRI is a commercial State company established under the Horse and Greyhound Act 2001, with a board appointed in accordance with the Horse Racing (Membership) Act 2001 whose duty it is to direct the affairs of the company.
Horse racing and breeding is a significant industry in rural areas, supporting approximately 16,000 private sector jobs, often in areas where alternative employment opportunities are limited. The industry has a regional spread with 26 racecourses, over 770 trainers and some 9,500 breeders spread across the country. Each of these generates direct employment and supports a diverse network of local suppliers including vets, farriers, feed merchants, transporters, grooms, jockeys etc.
Last year, almost 1.25 million people attended Irish race meetings; racing accounts for approximately 80,000 tourist visits every year. The Punchestown and Galway festivals are worth â¬45 million and â¬60 million each to their respective local economies. Ireland is the third largest producer of thoroughbreds in the world with exports of thoroughbred horses to over 35 countries worth â¬175 million in foreign earnings.
The industry's value to the economy is estimated at â¬1.1 billion per annum and the industry generates significant foreign direct investment.
Government support for the horse and greyhound industries is provided under the Horse and Greyhound Racing Fund, which was established under section 12 of the Horse and Greyhound Act 2001. The Act provides that 80% and 20% of the moneys paid into the fund each year are distributed between Horse Racing Ireland and Bord na gCon, respectively.
Since 2008, there has been a significant reduction in the amount of public funds allocated to the horse and greyhound fund, falling from â¬76.3 million in 2008 to â¬68.1 million in 2009 and â¬59.3 million this year - a 23% reduction in two years.
An independent review of the fund was completed in 2009 and concluded that, while not all aspects of the total contribution of the sector can be definitively quantified, there is adequate direct and indirect evidence to support a strong argument that the horse and greyhound racing industries contribute a major source of direct and indirect employment, give rise to considerable domestic and exports earnings and constitute a key driver of substantial economic activity, especially in rural areas.
Funding of both Horse Racing Ireland and Bord na gCon supports two important productive industries and helps to sustain the important role of horse and greyhound breeding and training enterprises in the development of the rural economy. These industries generate substantial economic activity and make a vital contribution to the rural economy, including farm incomes. Furthermore, bloodstock breeding is a sustainable and environmentally sound activity.
Some recent commentary has focused on the value of prize money at Irish race meetings. In that regard, it is worth making the point that the value of Irish prize money has been declining in the past two years, from a peak of â¬60.4 million in 2008 to an anticipated â¬47.7 million this year - a fall of 21% in two years. Prize money in 2010 will fall back to below the 2004 figure. It is also worth noting that for the five flat race classics this year, Horse Racing Ireland's contribution to the total prize fund of â¬2.5 million was only â¬20,000 with the balance funded entirely by owners and sponsors.
Prize money is regarded as the lifeblood of racing. A report commissioned by the Irish Thoroughbred Breeders Association identified that in 2008, â¬289 million was spent on training fees to win available prize money of â¬60 million and in the decade between 1999 and 2009, expenditure on training fees and stable staff employment averaged about five times the total prize money available. The policies pursued in relation to prize money in Ireland over the last decade are regarded as having ensured that some of the best horses in the world have been kept in training in this country.
Horse Racing Ireland is subject to annual audit by the Comptroller and Auditor General and at no time since its establishment has its efficiency or effectiveness been called into question. In addition, it has outsourced its internal audit function, which operates in accordance with the framework of codes of best practice, as set out in the code of practice on the governance of State bodies and which reports directly to the company's audit committee.
In response to recent allegations made about it by the Irish Bookmakers Association, HRI strongly rejected the claims made. Having met to consider those claims earlier this week, the board of HRI found them to be "wholly inaccurate and based on a flawed understanding of the racing industry and, in particular, the restructuring which took place following the enactment of the Horse and Greyhound Act in 2001." Indeed, the authors of the report on which the Irish Bookmakers Association's claims were based, acknowledged that their analysis "did not, nor was it required to, take account of the restructuring of the horse racing industry in 2001, resulting in the transfer of certain administrative functions of the Turf Club to the newly formed HRI".
Contrary to the IBA's claims that Horse Racing Ireland's costs are out of control, HRI makes the point that its costs increased by 35% between its first full year of operation in 2002 and 2009. Over that same period, there was a 28% increase in the number of race meetings. HRI also makes the point that, since 2008, its administrative costs have reduced by 28% and the number of permanent employees in the HRI group - including the Tote, the four race courses it owns, and Irish Thoroughbred Marketing - has been cut from 176 to 143 in the same period, which is a reduction of 19%.
In a recent letter to the Minister for Agriculture, Fisheries and Food, the chairman of HRI assured the Minister, Deputy Brendan Smith, that the "board takes its responsibilities in relation to governance and cost control very seriously".