Thursday, 27 October 2016
Ceisteanna - Questions - Priority Questions
Horse Racing Ireland
2. To ask the Minister for Agriculture, Food and the Marine if, considering the statements of the chairman of Horse Racing Ireland to the Joint Oireachtas Committee on Agriculture, Food and the Marine, admitting that proper procedure was not followed in the appointment of its CEO and calling into question the legality of that appointment and considering his approval of that appointment in those circumstances and the statement by the HRI chairman that he would make the same appointment in the same manner if given the opportunity, he plans to reconsider Government funding of €64 million to this semi-state body. [32348/16]
This question relates to Horse Racing Ireland, HRI, and the appointment of Mr. Kavanagh as chief executive officer of the board of HRI and whether that appointment was in breach of Government guidelines and also whether the proposed salary was in breach of Government guidelines. Representatives of Horse Racing Ireland recently appeared before the Joint Oireachtas Committee on Agriculture, Food and the Marine, arising out of which it became clear that there are many issues in regard to this organisation, including the level of funding it receives and accountability in that regard. I would welcome a statement from the Minister on those issues.
Horse Racing Ireland is a commercial State body established under the Horse and Greyhound Racing Act 2001, and is responsible for the overall administration, promotion and development of the horse racing industry. The appointment of the chief executive officer is a matter for the board of HRI subject to the consent of the relevant Ministers. In this instance, the Minister for Public Expenditure and Reform and I accepted the case made by the chairman and provided the necessary consents for an appointment by the board. This was an exception to the guidelines for the appointment of CEOs to State agencies based on the proposition advanced by the chairman that the reappointment of the CEO in this instance was in the best interests of HRI and the sector generally given the significant challenges it faces in the coming years. I have already indicated that it would have been more appropriate for the board to have had a full discussion on the case made by the chairman prior to its submission. I understand that the chairman accepts this. I further understand that the board has issued a statement confirming that the chairman’s actions and intentions reflected its views regarding the CEO’s contract but recognising that a more collegiate approach would have improved the process. The board's statement also indicated that the best result was achieved for HRI and the industry with the completion of a new contract. I am particularly cognisant of the fact that appointment of a CEO can only be made by the board. This was done.
On the question of funding, the Deputy will be aware of the very significant contribution that the horse racing industry makes to the Irish economy, most particularly in rural areas. Successive Governments have considered it appropriate to support the sector on that basis. I do not believe that the issues of sequencing around the appointment of the chief executive have a bearing on the funding of this very important sector but as with all such bodies I expect such funding to be carefully managed and fully accounted for in accordance with Government accounting rules.
The horse racing industry receives funding of €64 million per annum, with no expectation in terms of accountability. Every other sector that receives funding, be it the sheep sector in terms of the new sheep grant system and so on, is required to adhere to a particular set of conditions. For example, farmers are required to keep records and to meet particular outturns in terms of husbandry and so on. None of this regulation exists in the horse racing industry. Most of the funding provided by the State to Horse Racing Ireland is used as prize money in big races. We are speaking in this regard about taxpayers money being transferred into the hands of the wealthy elite. People have a problem with that. I am not suggesting that this industry does not deserve to be funded: it does. I accept it requires development, particularly in terms of small breeders, new markets for horses and so on but to hand over this level of funding to the industry and not require any accountability in that regard is totally inappropriate.
On the appointment of Mr. Kavanagh, the truth is that there was no business plan and nothing was put in place that could convince anyone that he was the best person for the job. It was simply an inside deal done by a handful of people and a question of pulling it over the line and getting it through. It has not worked. This shines a very bright light on an inappropriate way of doing business.
The Standards in Public Office Commission has guidelines for everyone in all sectors, but it has no guidelines in place after 12 years for people on public bodies as to what they do and how they co-operate. That is a final aspect of this that needs to be dealt with.
It is entirely wide of the mark to say that the board of HSI gets a sum of money from the Exchequer and that there is no further accountability. The board publishes an audited set of accounts annually and clearly shows what it does with the money. I invite the Deputy to look at HSI's capital infrastructure programme to improve racecourses in Tralee, Killarney, Mallow and the new flagship redevelopment at the Curragh. There is scarcely a racing venue which has not received funding and that comes from this. This is not a pot of money given to a collective board to spend without a plan. Importantly, it is not a fund that is going to an elite. The backbone of the industry is in rural Ireland in breeding establishments on small farms that have a number of mares. That is the bedrock on which the edifice that has positioned us as global leaders in the equine industry is built. We should remember that this industry is hugely internationally mobile. This industry could up and relocate. There are 14,000 jobs across every corner and rural county in Ireland. As such, it is very wide of the mark to say this is something going to an elite handful of people. That is far from being the case.
I dispute that, in particular when one looks at the Indecon report which was published a number of years ago. Practically nothing in that report has been implemented. On the notion that there is a plan in place, the reality is that Indecon was that plan and it has not been implemented in any sense. In truth, the vast majority of small breeders and guys out there who have a few horses and are struggling to get by get little or nothing out of this. I have spoken to them. It all goes to an elite at the top in the hope that it will trickle down. We all know what trickle-down economics has done in this country. It has simply not worked because everything spirals to the top. It is continuing to do so in this industry. We need to look at alternative ways to fund the industry, one of which is the betting tax. The betting tax must be increased to try to bring in more money and help the people at the bottom. It is inappropriate that so much taxpayers' money is going into this sector with so little return.
The Deputy will be aware that there is a betting tax now and that it is contributing significantly in this area. The question as to whether it can do more is one that could usefully have been asked in the debate we have just had on the Finance Bill. It is a new development and it is raising significant funds.
I re-emphasise the point that there is an accountability structure in place and that a set of audited accounts is provided on an annual basis. There is an investment that is being made in racing infrastructure. I have met the people in rural Ireland to whom the Deputy has referred and I acknowledge that they would like a better slice of the cake. That is a legitimate point but it is not a reason to decimate the industry by pulling the public funding it gets. There is a case for looking at the foundations of the industry in terms of its reach and the small farmers who have a number of mares and the crisis in terms of the cost of running point-to-point races. It is the conveyor belt at the lower level on which the industry is built. It is a legitimate point and one I urge the Deputy to make to the appropriate authorities. It is a concern I have myself. However, it is not a basis on which to dismantle HRI in a fit of pique over a single issue which could have been handled better. The board, however, is entirely satisfied that the outcome achieved, albeit in a manner that was not entirely satisfactory in terms of sequences, is one of which it entirely approves.