Seanad debates

Wednesday, 14 December 2016

Horse and Greyhound Racing Fund Regulations 2016: Motion


10:30 am

Photo of Michelle MulherinMichelle Mulherin (Fine Gael)
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I move:

That Seanad Éireann approves the following Regulations in draft: Horse and Greyhound Racing Fund Regulations 2016,copies of which were laid in draft form before Seanad Éireann on 21st November 2016.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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This is about the regulations that are to be introduced. The most recent estimates available suggest the horse and greyhound racing industries combined underpin in excess of 24,000 jobs and stimulate economic output of approximately €1.6 billion. They receive financial support from the State through the horse and greyhound racing fund under section 12 of the Horse and Greyhound Racing Act 2001. My Department makes payments from the fund to Horse Racing Ireland and Bord na gCon. In the period 2002 to date a total of €1.03 billion has been paid from the fund to the horse and greyhound racing industries in accordance with the provisions of the Act. The cumulative upper limit on payments from the fund, provided for under the relevant regulations, has, therefore, been reached.

Exchequer funding provided from the fund is pivotal to the survival and continued development of the horse and greyhound racing industries. To give effect to the budget for 2016, the cumulative upper limit must be increased by regulations. The Estimates for my Department, passed by both Houses as part of the budgetary process for 2017, include an allocation of €80 million for the horse and greyhound racing fund. It will be distributed in accordance with section 12(6) of the Horse and Greyhound Racing Act 2001, with 80% going to Horse Racing Ireland and 20% to Bord na gCon. These percentages amount to €64 million and €16 million, respectively. To allow my Department to provide the moneys allocated in budget 2017, it is necessary to comply with the technical requirement under section 12(13) of the Horse and Greyhound Racing Act 2001 to increase the cumulative limit on the amount payable from the horse and greyhound racing fund by €80 million to €1.118 billion. This is being achieved by way of the regulations submitted today. The aggregate limit on the horse and greyhound racing fund was increased in this manner in 2004, 2009, 2010, 2011, 2012, 2013, 2014, and 2015.

With regard to the horse racing industry, it is estimated that the bloodstock industry provides 14,000 jobs and contributes almost €1.1 billion to the economy. In 2015 bloodstock export sales rose to €268 million in what was a remarkable year for the bloodstock industry. The industry is also estimated to account for up to 80,000 tourists to Ireland each year. They are among the estimated 1 million plus who attend horse racing each year in the country. Ireland holds a distinguished position in the thoroughbred racing world, being the biggest producer of thoroughbred foals in Europe and the fourth biggest in the world. Approximately 40% of the EU output of thoroughbreds and 11% of the total worldwide are produced in Ireland. The horse and greyhound racing fund has been pivotal in shaping the destiny of this dynamic industry. It has helped Ireland to become a world centre of excellence for horse racing and allowed Horse Racing Ireland to undertake a capital investment programme that has underpinned growth in the sector.

The horse racing industry satisfies all of the critical requirements for success in terms of employment and foreign direct investment. It is the type of export-oriented industry we need. The industry has been the flagship for the country and had an immeasurable influence on its international reputation in recent times. Government funding of this key industry presents an excellent opportunity to yield a high return on investment. Support for certain strategic industries is important to future economic growth and can provide widespread benefits for society, in addition to the economy.

With regard to the greyhound industry, the greyhound racing sector is also an important driver of employment and activity in both rural and urban areas. A report by Jim Power Economics in 2010 estimated that the greyhound industry employed over 10,300 people and contributed almost €500 million in economic output to local economies around tracks, which have a wide geographical spread. Bord na gCon reports that, since 2002, over 10 million people have attended greyhound race meetings. The board has an annual turnover of approximately €40 million. Funds generated from racing are reinvested in the industry through contributions to prize money and grants to various bodies involved in the greyhound racing and breeding sector, in addition to the promotion of greyhound welfare and the regulation of the industry.The challenge for the board is to encourage the development of a commercial greyhound racing and breeding industry built on a consumer-focused, high-quality entertainment product which meets the highest international regulatory standards. The funding being provided to the greyhound racing sector helps to sustain a long-standing tradition as the industry is part of the social fabric of the country and underpins economic activity in what are often less affluent regions. It has also contributed significantly to the improved facilities available at greyhound tracks around Ireland. Greyhound racing as an activity is inextricably linked to the farming community and, while it is undoubtedly part of the fabric of rural Ireland, it also enjoys a strong urban support base. The overall objective of the Government is to ensure that the horse and greyhound racing industries achieve their maximum potential and, in so doing, contribute to economic and social development. Governments of all persuasions have acknowledged the importance of these industries and have supported them through legislation and policy initiatives over a long period. Without this support, these vital industries would simply not survive.

Broadening the tax base is an issue that has been of significant concern among many politicians, in particular. The advent of new technologies and business models has challenged Government to re-evaluate the funding mechanisms for the industry. As part of its overall commitment to the industry, the Government has addressed, through legislation, the anomaly whereby remote and online betting operators were outside the tax net. The Betting (Amendment) Act 2015 came into force in April 2015 and brings betting exchanges and Internet and mobile betting providers within the scope of the existing licensing regime. It extends the existing 1% turnover tax on land-based bookmakers' activities to online and mobile bookmakers and implements a 15% commission tax for betting exchanges. These measures have had a very positive effect on revenue streams with significant increases being realised. Betting tax revenues have increased by €20 million in 2016 when compared with this time last year.

Both Horse Racing Ireland and Bord na gCon have operated through challenging economic conditions over the past several years and, in that context, the former Minster for Agriculture, Food and the Marine, Deputy Coveney, had the activities and operation of both bodies reviewed. The Horse Racing Ireland Act, which gives effect to the recommendations in the Indecon report, came into force on 8 February 2016 with certain sections commenced on 9 March 2016 and further sections due to commence in January 2017. The Act introduced a range of improvements in governance and accountability arrangements, many of which derive from recommendations made by Indecon consultants following their review of the sector. Indecon International Economic Consultants was also commissioned to conduct a review of certain matters relating to Bord na gCon in order to assess the suitability of the legal, governance and regulatory framework supporting the greyhound industry and to identify opportunities to maximise its commercial income. In this regard, my colleague, the Minister, Deputy Creed, will shortly bring forward the heads of a greyhound industry Bill to ensure the principles of good governance and regulation are clearly and unambiguously laid down in primary legislation. In broad terms, the Bill will seek to address the deficiencies in the existing legislation as identified in a report authored by the Joint Committee on Agriculture, Food and the Marine in January 2016, as well as in the Indecon and Morris reports. The Bill addresses the governance of Bord na gCon, strengthens regulatory controls in the industry, modernises sanctions and improves integrity with a view to building a reputation for exceptional regulation in the sector. The Bill will strengthen the Irish greyhound industry, enable it to deal with the existing challenges and maximise its future potential.

Without doubt, Horse Racing Ireland and Bord na gCon face significant challenges as they work to grow and develop the horse and greyhound industries in an extremely competitive market segment. I am, nonetheless, confident that these industries have tremendous growth potential with sporting, leisure, tourism and cultural appeal across a wide demographic, both national and international. The thoroughbred horse industry is a major driver in the economy and both industries breathe life and jobs into their respective communities from the grassroots up. The €80 million allocation is vital to help secure rural jobs and sustain communities. The Government plays an important role in considering policy and providing an input into legislation to nurture all potential growth. Given that these two industries have their respective footprints in many parts of rural Ireland, I am confident that it is the goal of all of Members present to fully realise the contribution of these sectors to the economy, employment and the social and cultural fabric of this country.

The degree of success of these initiatives is dependent on the hugely important contribution made by the horse and greyhound racing fund. Section 12(13) of the Horse and Greyhound Racing Act 2001 provides that a draft of these regulations must be laid before both Houses of the Oireachtas and a resolution approving the draft be passed by each House before the regulations are made by the Minister. Accordingly, I ask for Members' support to ensure that Horse Racing Ireland and Bord na gCon receive the funding provided for in budget 2017 and that the very important role of these industries and the economic activity generated by them are sustained into the future. I commend the motion to the House.

Photo of Paul CoghlanPaul Coghlan (Fine Gael)
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I ask all Members to be brief. This debate has been ordered to finish by 3 p.m. and the Minister of State has three minutes to respond. The Members will keep it as tight as they can.

Photo of Paul DalyPaul Daly (Fianna Fail)
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I welcome the Minister of State to the House. My party will support the motion on the horse and greyhound racing fund. As the Minister of State rightly pointed out, Ireland is a world leader in this industry, which is what this is. While there is often a false perception about and an opposition to the allocation of such funds to what is perceived in the general domain to be a glorified sport, the Minister of State has pointed out with reference to the facts and figures that this is a major industry, particularly in parts of rural Ireland where neither industry nor employment are ten a penny.

There is an old adage which states that to accumulate, one must speculate. The fund makes an investment of €80 million in the sector with €64 million for the horse racing industry and €16 million for the greyhound racing industry at an 80:20 breakup. With that money, we are supporting an industry with an annual economic output of €1.6 billion according to the latest figures. In any man's language, it is a good reward for any investment. In this case, it helps to provide employment for up to 24,000 in rural areas. I ask those who think the investment should not be made whether they would prefer if the money had to be spent to fund social welfare payments to compensate those people if their jobs did not exist.

Racing plays a major role in our tourism industry with an estimated 80,000 tourists coming to the island annually with the primary goal of attending racing festivals. Those racing festivals also make a major contribution to their respective local economies with an estimated €260 million being spent annually in the likes of Killarney, Galway and elsewhere. The investment is reaping enormous rewards. The argument will be made that the horse racing industry would survive without this money. While that is possibly true, without this injection, our national industry would be an also-ran. By virtue of the stimulus and support provided by the fund, we are world leaders in this industry with Irish exports of bloodstock at €268 million. That is a serious input into our economy.

I had a number of issues but the Leas-Chathaoirleach asked me to be brief. I welcome the Minister of State's statement that the greyhound Bill will be forthcoming. I had intended to raise the matter but he got to speak first and cut me off at the pass. We will support the motion.

Photo of Pádraig Mac LochlainnPádraig Mac Lochlainn (Sinn Fein)
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Sinn Féin recognises the importance of the horse racing and greyhound racing industries to Ireland and notes the cultural and economic benefits they contribute to the country, as well as the enjoyment they provide to many.Our concern is with the level of funding and the manner in which it is used when we consider far more needy areas where the funds could be used. For example, €7 million would guarantee a school transport place for the tens of thousands of students but a review yesterday refused that. We are talking about multiples of €7 million here. It could be spent on such matters rather than dishing out huge prize money and building fancy bars.

Bord na gCon claims it contributes €500 million to the economy while Horse Racing Ireland claims to contribute €1.1 billion. If they can claim these vast sums of money, how can we justify providing huge annual contributions to both industries which are dominated by very rich owners and trainers? Our citizens - those lying on the streets and on hospital trolleys - deserve better. The Government often talks about priorities; I know where my priority would be in this regard. Corporate governance of both industries also raises questions as highlighted with the reappointment of CEOs against State rules and the building of champagne bars. I have raised the matter of the reappointment of the CEO, as has my party. My colleague, Deputy Martin Kenny, raised it in the Dáil and yet the reappointment stands despite its breaching rules and salary caps. The Minister of State and his senior colleague, the Minister, Deputy Creed, are responsible for this reappointment, for the breaking of State rules and for the continuation of cronyism, which it smacks of.

Given the reasons I have outlined, among many more I could have gone into, my party and I cannot support funding at the level suggested for these two bodies. I intend calling a vote on the matter in recognition of my concern and that of my party. Funding is perilous at the moment and I consider this funding could be used in a manner much more beneficial to the citizens of our State.

Many Senators have voiced their concerns about funding and corporate governance issues in both industries. I hope I can count on their support in the vote.

Photo of Michelle MulherinMichelle Mulherin (Fine Gael)
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I welcome the Minister of State to the House. In these modern times when we have so many ways to stimulate activity into the economy and we have so many high-tech jobs and pharmaceutical jobs, it is fantastic that the tradition of horseracing and greyhound racing, which have been with us for centuries as part of our history, is to the fore allowing us to present ourselves on an international stage. The figures the Minister of State has laid before us prove that we are making a success out of something that is dear to so many people's hearts. There is much pride in our bloodstock that is in such demand considering the size of our country. We can be proud that horses and jockeys from this country feature internationally.

As has been said, Bord na gCon and Horse Racing Ireland have been funded every year since the Horse and Greyhound Racing Act 2001. This is a technicality in that the consent of the Houses is required for this €80 million to be split 80:20 between Horse Racing Ireland and Bord na gCon. The evidence of the success of the investment is there. The Irish thoroughbred industry report update from 2013 gives the figures the Minister of State outlined of €1.6 billion in economic output and 24,000 jobs underpinned. We know those jobs are in the horse breeding and dog breeding sectors. In addition there are jobs in hospitality with 1 million people attending horseracing events with significant numbers also visiting our greyhound tracks. People are getting entertainment and it supports the hospitality sector and international tourism; it is good all round.

The area of corporate governance is very important. When we are giving taxpayers' money it needs to be spent in line with what we envisage for it. I am delighted that arising from the recommendation from the Indecon report we saw the Horse Racing Ireland Act come into law. There will be further legislation as has been mentioned - the greyhound industry Bill.

Betting is a big feature of horseracing and greyhound racing. I would like to see the Government introduce a gambling control Bill which has been discussed for some time. The Minister of State referred to the Betting (Amendment) Act 2015, which deals with taxation. Some of legislation that regulates betting from a social point of view is 80 years old and some of it is 50 years old. We need to make it fit for purpose and protect vulnerable people, especially minors, who might get a gambling addiction. Considerable work needs to be done there and the Government should give it priority.

Photo of Denis LandyDenis Landy (Labour)
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I welcome the Minister of State to the House. My party will support this funding. I acknowledge the number of jobs that are created through the horse industry and greyhound industry. While some people feel it is an opportunity for buying champagne in luxurious bars, as someone from a rural area, I recognise that it is an opportunity for people who may not get employment in their own areas to be employed. I am surrounded by dog breeders, owners and trainers as well as horse breeders, owners and trainers in Tipperary. Every day I see young people who have been able to stay and work in their own communities. Some of them have broken out into training dogs or horses. They have gainful employment, participate in their communities. They are around to play GAA, soccer and other sports in their communities and make up teams.

I do not live in a parallel universe. I am surprised at our Sinn Féin colleague. I am quite friendly with many Sinn Féin people who are involved in the dog industry and who are looking for the Bill the Minister of State mentioned and which I hope he will steer through. The Minister of State referred to a report from the Oireachtas Joint Committee on Agriculture, Food and the Marine last January. The Minister of State, as Chairman of that committee, guided that through the committee during 2015, when I also sat on the committee.

I do not pretend there are no problems in the greyhound industry; there are many problems there. There are problems with governance, integrity, substance misuse, semen control and stud control as well as many other problems. The report broadcast over four or five days on RTE's "Drive Time" programme highlighted the problems. Cutting of the supply of money to the people in the industry who are trying to tidy this up and make a proper living from it and bring integrity back will not solve these problems. It will be done by introducing legislation as we intend to do. I do not speak as a Government Member but as somebody from the Opposition who has an interest in this. I have had many discussions with the Minister of State and I know he intends to do it. We will have one opportunity to do it, starting immediately after Christmas. We need to get this right because the industry is dying on its feet. As I said on radio the other day, if we do not get it right and bring the confidence back into the industry, it will die.

The horseracing industry had the same problems. We need to remember that the people working in that industry are represented by associations, such as the Irish Stable Staff Association, Irish Injured Jockeys and the Irish Racehorse Trainers Association. All those people have organisations within the horseracing business to stand up for them and to speak for them. It is not as though people are downtrodden. I have frequently raised the entitlement of members of the Irish Stable Staff Association to proper wages, etc., and that is moving along. However, cutting off the supply of funding for the industry would not solve anything and would put more people on the dole. We will be supporting the legislation.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I thank the Members for their contributions. In order to allow the payment to go through it is necessary to comply with the technical requirements of section 12 of the Horse and Greyhound Racing Act. It is achieved by way of regulations submitted to both Houses and then approved.I have no axe to grind. I keep a few sport horses, but not thoroughbreds or greyhounds. I am not directly involved in the industry.

During the last Dáil, the committee which, as Senator Landy said, I chaired dealt with the pre-legislative scrutiny on the Horse Racing Ireland Bill. The industry was thoroughly examined by the committee. There are a couple of salient facts. As a result of the committee's considerations and deliberations, and following its recommendation, staff were allocated a position on the sub-committee in order that they could have a voice on the board of HRI.

The vast majority of thoroughbred and non-thoroughbred mares are owned by people with four mares or fewer. Major sheikhs or multinationals are not involved. The vast majority of stallions are in yards with no more than two stallions. Those are the facts.

As has been said, the industry has attracted 80,000 visitors from overseas, primarily for horse racing rather than greyhound racing. It is considered a sport that brings in a lot of revenue. The industry is thriving in some areas of the country. It provides significant rural employment, and if there are issues around the conditions of some employees, that needs to be addressed under employment law.

Nobody would ever say that greyhound racing was an elitist activity; it is anything but. The demographic spread of greyhound owners and breeders shows that people do not need to have a large amount of money or resources at their disposal. They require resources to transport and keep animals to a certain standard on registered premises. It is quite simple. The new legislation will deal with governance, regulation, integrity and improving the reputation of the sector. Other legislation concerning animal health and welfare is already in place, which can deal with many of the alleged and perceived problems that exist in the sector.

It is important that we examine the €80 million that will be allocated under the horse and greyhound racing fund and the revenue that is generated. More important than that is how we can fine tune and develop other aspects of the sector.

I agree entirely with Senator Mulherin about the gambling control Bill. I have been an advocate for it since it was first introduced by the former Minister, Alan Shatter, as a White Paper. The betting tax Bill will provide us with an opportunity to increase betting tax as long as we can capture it and not put some indigenous people involved in the bookmaking industry at a disadvantage. That is the trick.

Eventually, the net cost of the fund should be zero. In other words, the revenue returned to the Exchequer through taxes such as betting tax would equate to the amount of money that is given out. Money comes in to the Exchequer and is dished out through different Votes to various Departments. That is what we are trying to do here today. I appreciate that €7 million would provide rural transport, but the industry is primed, through the €80 million fund, to bring in revenue to the State to allow us to consider all of the other options.

Question put:

The Seanad divided: Tá, 30; Níl, 8.

Tellers: Tá, Senators Gabrielle McFadden and Michelle Mulherin; Níl, Senators Paul Gavan and Trevor Ó Clochartaigh.

Question declared carried.