Tuesday, 30 April 2013
National Lottery Bill 2012: Committee Stage (Resumed)
A separate question was raised in regard to the retailers. I already indicated on Second Stage that I intend to protect the retailers' commission. This will be written into the licence.
The very fact that Senator Reilly's amendment has been ruled out of order highlights what I am going to talk about on the next section. This money does not go to good causes at all; it goes to the Exchequer for Government decision as to how it is spent. The fact we cannot put down an amendment to direct that it goes to a good cause because it would be a charge on the Exchequer proves the point that I have been making time and again in this debate, namely, no good causes are actually ring-fenced. It is all to do with a decision of the Government as to how it spends money out of the Exchequer, because the money that is supposedly for good causes goes from the lottery to the Exchequer and will continue to go the same route. This is specifically provided for in section 44, which refers to moneys being paid into the Central Fund and the Government then making a decision. Therefore, Senator Reilly cannot table her amendment. It gives the lie to the whole notion of good causes, because if the money was ring-fenced for good causes the Opposition could certainly table an amendment. I have tried to highlight this issue time and again but it never seems to get traction.
This whole idea that good causes were ever ring-fenced is not true. Good causes could never be provided for. The money from the lottery that was supposed to go to good causes goes straight into the Exchequer, or Central Fund, and can be spent by the Government under any of the headings. As I understand it, applying moneys under heading (d), health and the community, would not stop the Government from using good causes money to plug a deficit in the Department of Health. I am not sure there is any particular requirement that the money must not become capital expenditure, although the Minister could disabuse me of that notion. As I understand it, this money might even make up a shortfall in wages in the Department. The heading on the natural environment was inserted into the legislation for very good reasons. However, as I understand it, there will be nothing whatsoever to prevent the Government or the Minister, Deputy Hogan, from paying for a sewerage scheme out of good causes money, as it is an aspect of the natural environment.
It could possibly be a good cause for a rural area but I am sure it is not what people had in mind when they were planning this, although perhaps it is. The money can be used for any such other objectives that the Government may determine from time to time, so the money could be put into any Department. I am not suggesting this is something new-----
I am not suggesting this is something new or that the Government is changing the system radically, because it is not. This has always been the case and the Government from time to time decides it will spend the money on what one would imagine are good causes, such as a specific grant scheme for sports or buses for the elderly or the disabled through the Department of Health. If he wants, the Minister can tell me I am totally wrong, but I do not believe I am too far wrong.
One way to open the whole system up would be to provide that every decision to grant money for good causes be published in Iris Oifigiúil, which I understand is not currently the case. I am not trying to take the political glory away from Government Deputies, as it is part of the scene that they can make these announcements when in government, and that is fine.
We could be, eventually, but I hope not yet. Officially, there should be some record, at some point after everyone makes their local announcements, to show where the money is spent. If it is just being spent on sewerage or health facilities that should really be paid for out of general taxation, while that may be for the good of the community, it is not what people would imagine when talking about good causes. They would have assumed it meant, for example, a specific cancer nurse providing a specific service funded by the national lottery, but I do not believe that is the way it operates in practice. I invite the Minister to enlighten me and tell me I am wrong. If he does, I will withdraw what I said.
Section 44, which we have not reached yet, states that moneys are paid into the Central Fund by the national lottery. The Government then "shall", not might, apply that money for particular purposes, and the purposes are then listed in the Bill - for example, sport, national culture, the arts or health. I added "natural environment" at the request of Members of the other House, where a coherent case was made for that.
The system is transparent in that every year there is reporting of what the national lottery moneys are spent on and one can put down a question to any Minister about what lottery money is applied to in his or her Department. It is not applied to staff in the Department of Health, needless to say. With regard to the natural environment, I would envisage the funding of pathways, walks and so on. With regard to sport and recreation, we all know the fantastic investment in sports facilities as well as in the arts throughout the country. It is a fairly transparent process. One can ask at the end of every year how the money is distributed and it is certainly not siphoned off to any other purpose because under the law it "shall" be applied for one of the purposes that are listed in the Schedule.
In the Revised Estimates that are published, the Senator will see the expenditure that is funded by the national lottery under every subhead. Could it be applied for some reason? I suppose there is no prohibition on it, if there were some crisis in health funding for the elderly, for example, where we might all agree this is what should be done, particularly given that we have lived through a crisis period. There are rational decisions that can be made at the time. However, if it is not one of the items listed here, we would have to change the law. If it is one of the listed items, it needs to capture the spirit of what is intended. There is transparent publication of where the money is going, so there would be a debate if the allocation of money was deemed to be inappropriate.
Will the regulator have a part to play in this? There has been, up to now, a bit of boundaryless meshing of where lottery moneys come in and where they go, not in a dishonest way but with a general boundarylessness. As I said earlier, there are accusations out there, be they true or not, that certain constituencies get more than others. While I do not mean that in an accusatory way, people have that perception. Having worked in a part of the city that needed lottery funding very badly for 25 years and was often at the bottom of the pile, I want to know if the Minister envisages that the regulator would have a part to play in how these lottery funds were distributed, in fairness and objectivity, which might allay Senator Byrne's fears?
No; I would not envisage a role for the regulator. The lottery regulator's job is to regulate the operation of the lottery, not the distribution of moneys, which must be done in accordance with the law. Everything that is involved in politics is regarded somehow as being open to suspicion. I found-----
I meant suspicion in the sense of particular constituencies being favoured and so on. The bottom line is that at least decisions made by politicians are accountable. One can put down parliamentary questions, call in the Minister or have a committee hearing. Often, we set up boards that are independent, and they are so independent that they are unaccountable. Even in terms of appointments, I find that independent appointment boards are often so independent that there is no rationale for their decisions, or one cannot get behind them. At least with a politician, one can say "Why did you do that?" or "Why is there a preference for one over another?" By and large, there has been a reasonably fair distribution of money. I suppose people sometimes look for political kudos for things that are happening in the natural course anyway, and we are all guilty of that. I believe the system is robust. To answer the question directly, no, I would not give the regulator any role in determining where the money is going. Let us keep that to ourselves in a democratic assembly.
This amendment was tabled in the Dáil also and the Minister spoke on it. I would like to reiterate the point that one of the major concerns of taxpayers and citizens is that the level of moneys going to good causes will be maintained and this was the reason behind trying to specify an amount in legislation. I understand the Minister has not settled on a precise formula regarding the moneys that will go to good causes. However, will he elaborate on or give us some information regarding when he will make known the formula? This would be of benefit to many of the people, communities, good causes and charities that have benefited from lottery funding over the years.
In respect of retailers, the proposed change in the lottery represents a fundamental shift in the lottery model. It would be good practice to provide all of these people with certainty in as far as the Minister can. Will he give us some detail on the formula he proposes for the future?
During the debate people have asked me why I am so upset about all of this because I should be aware that the moneys for good causes will be ring-fenced. I know that, but the fact is the Irish people own the whole lottery, not just the good causes. Therefore, it is not as if we are gifting back the good causes to ourselves. Why is it the 30.5% is not specified in the Bill? Is that because it will increase to 40.9% or because it will be a moveable feast? That is the question with regard to the operator. It needs to get its profits, which are ring-fenced. However, if they do not happen, what happens the money for good causes or the amount of money for scratch cards or the lottery itself? Will the cost of buying a lottery ticket go up?
It is important that I give some clarification on this. I am anxious to maintain the income flow to good causes. I indicated the amount for good causes would be of the order of 31% of lottery sales, because that was, more or less, last year's pay-out. That figure is not in this legislation nor in the original legislation because it is determined in relation to the prizes and so on. I have asked my officials to consider what would be the most robust way of ensuring that if the lotto grows, we will continue to get a good income flow for good causes. That will be in the licence and the licence will not be subject to change. Neither the operator nor the regulator will be in a position to alter that once it is fixed.
I intend to construct it so that the good causes contribution will be linked to a percentage of what is called the "gross gaming revenues", which is basically the sales less the prizes. The reason I am doing that is that the variety of games offer a different prize fund. Despite what we might think, most people play the lotto to win a prize, not to support good causes. However, there is a comfort in being able to say one's money is going to a good cause and that is important.
It is important that it goes to good causes. The main point in playing is the chance of winning something. As the lottery has changed, the different games have developed a different prize structure. Some offer prizes in excess of 50% of the take, up to 55% in some of the games. Therefore, rather than have a fixed 30% of all going to good causes, I have suggested a fixed percentage of an overarching amount of sales, less prizes. That is what I am working on currently. The advice I have received is that this is the way all the modern lotteries are structured and that this will maximise the take for the good causes, particularly as the lotto grows and different games are advanced and approved by the regulator. I will write that into the licence and it will not be subject to change thereafter.
I would like to support Senator Reilly's proposal regarding this section. The Minister will recall that seven or eight months ago when we were speaking on Senator O'Donnell's motion on the lottery, I spoke about the retailers of Ireland. We must remember that the lottery was born in our little post offices, in small and rural retailers and in our corner shops. Thank God, many of those businesses still exist. I am somewhat confused, however, by the need for Senator Reilly to make her proposal. Perhaps I am suffering from amnesia, but I thought the Minister had taken on board -----