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Treasury - Gambling Reforms

Cassy O'Connor MP  -  Monday, 6 September 2021

Tags: Pokies, Gambling Industry, State Budget

Ms O'CONNOR - Treasurer, right to information documents obtained by Meg Webb, MLC, confirm that your Government negotiated the casino EGM tax rate, at the latest, on 9 December last year - months before you went to an election and deflected persistent questions over the tax rate.

Why weren't you up front with Tasmanians about what the casino pokies rate was during the campaign, given that it was a matter of significant financial and public interest?

Mr GUTWEIN - I think I was up-front with Tasmanians.

Ms O'CONNOR - At what point?

Mr GUTWEIN - I pointed out very clearly during the campaign, because we took a policy to the 2018 election and that settled the policy position. That was the policy that would ensure that the state would do better, pubs and clubs would do better, and Federal Hotels would do worse. That was the policy intent and that was what was delivered.

When I was asked this question during the election campaign, I made the point on a number of occasions that you could not judge this policy by focusing on a particular tax line. It was about a bundle of taxes. The Cabinet, subsequent to the election, finalised the legislation that has now been out for public consultation, and it will come back to Cabinet again for a final decision some time later this year.

Ms O'CONNOR - I see what you did there, Treasurer. The fact is, you knew what the casino pokies tax rate was in December last year. Your Minister for Finance has confirmed that in Legislative Council Estimates, yet you made a clear choice not to be open with the Tasmanian people about that casino tax rate, which is at about half of what Federal is paying now.

Mr GUTWEIN - This comes back to your focus on individual tax lines. In the legislation, there is almost a tripling of the tax rate that has been applied to Keno statewide.

In relation to the broader tax position that I was asked about on a number of occasions during the campaign, I made the point that the state would do better. That is a statement of fact. Pubs and clubs would do better, and Federal Hotels would do worse, and that is exactly what the legislation delivers.

Ms O'CONNOR - I challenge you on 'the state will do better'. Having generations of Tasmanians consigned to mental poor health, poverty, child abuse, neglect, family breakdown is not doing better. On what basis was this tax rate of 13.9 per cent for casino EGMs determined, and when did you decide on that rate? Was it at the December meeting, or did it go to Cabinet?

Mr GUTWEIN - As Treasurer, I was tasked - both prior to me becoming Premier and also remaining Treasurer, and after becoming Premier - with finalising those matters, which I did.

Ms O'CONNOR - The question was, why did you decide on the casino tax rates that you did?

Mr GUTWEIN - With regard to the markets and what we did with the 2018 policy, we said we would benchmark against models around the country. We looked at a range of different models with regard to demographics and the size of the markets -

Ms O'CONNOR - You went to Far North Queensland.

Mr GUTWEIN - The north Queensland model is the closest to the Tasmanian circumstance.

From memory, we have actually had about a 30 per cent increase in the tax rates required in north Queensland because of the fact that we apply a community service levy, which they don't. We also adopted the statewide Keno rate, which will be a growing revenue stream over time for the state.

Ms O'CONNOR - Treasurer, as Premier why did you refuse to disclose the EGM casino tax rate to the Tasmanian people before or during the election campaign and yet consulted with industry? So industry knew about the tax rate you'd negotiated but the Tasmanian people and their parliament didn't. That was by design. Why did you make that decision?

Mr GUTWEIN - Because it made no difference to the overall policy outcome that we were talking about. In fact it delivered the policy outcome that we had taken to the election in 2018, that was that the state would do better, pubs and clubs would do better and Federal Group would do worse. That was the policy intended in 2018. That's what I spoke about.

Ms O'CONNOR - That's an interesting metric you apply to whether or not a question in the public interest should be answered, whether or not it makes any difference to the policy outcome. Transparency is an important policy outcome and transparency is something that you, since becoming Premier, have talked about a fair bit even though there's been no real discernible change.

You made a decision not to be up front with Tasmanians about what the casino pokies tax rate was, or any other of the financial arrangements around your future gaming policy. Did you know it would go down like stink? Was it a deliberate decision because neither you would answer the question and nor would your Finance minister?

Mr GUTWEIN - That legislative pack and the final bill that went out for public consultation was not considered by the Government until after the election. Under normal circumstances, if Ms Hickey had not decided to leave the Government and destabilise what was a very good Government up to that point, we would not have been running to an election. The plan always was that we would have introduced and brought that legislation forward this year. You have an interest in it -

Ms O'CONNOR - I used to be a journalist and I also have an interest in the truth.

Mr GUTWEIN - and I understand why you have an interest in it, but as I have said, focusing on one particular tax line does not tell the whole story. That legislative package is now out and available for Tasmanians to provide their feedback on -

Ms O'CONNOR - After they voted.

Mr GUTWEIN - and importantly, the parliament will make the final decision. The parliament will be the arbiter of what those tax rates are.

Ms O'CONNOR - We know the Tasmanian Hospitality Association has both your Government and the Labor Opposition in their back pocket and we can tell how that legislation is going to go.

Treasurer, your policy is to allow simulated racing events for gambling. It has not undergone any harm minimisation risk assessment. Your department of Communities Tasmania has argued -

The introduction of simulated racing games into hotels, clubs and other gaming venues has the potential to cause gambling harms.

Communities Tasmania has previously expressed concern regarding the visibility of Keno in family sections of hotels and clubs. The introduction of simulated racing games in similar areas may have similar impacts in terms of normalising gambling for children and minors.

Are you concerned about these impacts and have you read this submission? What is your justification for introducing a new form of gambling in Tasmania?

Mr GUTWEIN - You made the comment in the House when it was first raised that the simulated racing would occur. I can't think what debate that was in, but I do recall you making the point that is a good thing -

Ms O'CONNOR - I probably said I would rather see a simulated race than horses being tortured. In this state we will see both, of course.

Mr GUTWEIN - I don't think you were as colourful as that in what you said in the House. You did welcome it.

Ms O'CONNOR - No, I didn't. You need to stop verballing me.

Mr GUTWEIN - I don't think I am. I will refer to it.

Ms O'CONNOR - I am asking you about the Communities Tasmania submission and the harm that is caused.

Mr GUTWEIN - I have not received any feedback yet in relation to the consultation that has occurred. I am sure I will get a summary at some stage. I don't share Communities Tasmania's view on Keno in pubs and clubs.

Ms O'CONNOR - It is not Keno; it is simulated racing.

Mr GUTWEIN - No, but you made the point that they mentioned Keno. I see it as being no more of a concern than what I do Keno.

Ms O'CONNOR - It is another form of gambling and another way to take money out of people's pockets.

Mr GUTWEIN - I did note that in the Greens alternative budget, you found a way to take a further $100 000 a year over and above the tax take that we have in our Budget.

Ms O'CONNOR - Oh, did we? We must have hit the big corporations.

Mr GUTWEIN - You were arguing that you would shut down pubs and clubs but you would still allow -

Ms O'CONNOR - We would tolerate them in casinos.

Mr GUTWEIN - poker machines in casino and your tax rate actually went up.

Ms O'CONNOR - Why is this about us and not your terrible policy?

Mr GUTWEIN - What sprung to mind when I saw that is that seems a little hypocritical because you are taking more tax and more money out of people's pockets when you argue so vociferously that we should be taking none.

Ms O'CONNOR - That they should not be in pubs and clubs. Oh wow, that is Orwellian, but carry on.

Mr GUTWEIN - Statement of fact. It is true that there is almost half a million dollars worth of additional revenue that you are going to take from the gambling industry.

Ms O'CONNOR - $400 000.

Mr GUTWEIN - Whose pockets does that come from?

Ms O'CONNOR - It comes from people who go to casinos to gamble. Comes potentially from people with a lot of money.

Mr GUTWEIN - You don't think that there might be migration from those that like to play and have a flutter on the pokies, that might wander into a casino?

Ms O'CONNOR - It is about minimising the harm.

Ms O'CONNOR - Back to the department of communities, which deals with Human Services. The department of communities has argued -

The introduction of fully automated table games in Tasmanian casinos may potentially cause gambling harms. As FATGs do not require a dealer, the opportunities for appropriately trained staff to identify and address signs of problematic gambling behaviour amongst players is reduced. Additionally, the introduction of FATGs provides the potential to increase the rate of play, thereby intensifying gambling engagement and increasing the potential for gambling harms.

Treasurer, are you concerned about these impacts? What's your justification for this position, and, given that the draft legislation has no harm minimisation measures in it, how are you going to respond to that?

Mr GUTWEIN - In terms of harm minimisation measures, we have said we will double the CSL. The additional funding that the state receives will enable us to do that. We will target those funds appropriately to ensure that we minimise harm, and importantly, bring social capital as well. As I said, I haven't seen communities' response. I'll receive a summary of the feedback that we've received on the consultation of the bill, and we'll take those matters into account.

Ms O'CONNOR - Following on from that, your Government, the Federal Group, and your corporate ally the Tasmanian Hospitality Association have used employees or jobs in the sector as a political weapon against those who oppose your gambling policies. Despite this, your government policy is allowing fully automatic table games in casinos. Have you undertaken any examination of how many employees your new policy framework will make redundant?

Mr GUTWEIN - In terms of gaming, I point out that your budget that you announced last week, and as I say I've always -

Ms O'CONNOR - Our budget isn't going to become law in Tasmania.

Mr GUTWEIN - You've always argued that one day it will. One day, maybe.

Ms O'CONNOR - Yes, one day. Probably not in my lifetime, politically.

Mr GUTWEIN - The point is that you, on one hand, are slashing jobs in pubs and clubs by virtue of your actions and then you raise a new game on the floor of the casino as being a major issue. I am not concerned that the introduction of that game would lead to job losses.

Ms O'CONNOR - You acknowledge though, Treasurer, that during both the 2018 and the early 2021 election, but particularly 2018, it was the jobs that Federal Group, the THA and the Liberals in Government or campaigning, were arguing about. This policy will lead to fewer jobs in the hospitality sector, won't it? Before you deflect to our alternative budget, remember we are not debating this budget, we are debating your Budget.

Mr GUTWEIN - I am happy to discuss my Budget. Our gaming policy position will underpin jobs across the hospitality sector. It will provide more autonomy for pubs and clubs and greater income which will lead to -

Ms O'CONNOR - That's right, because you are taking more money out of people's pockets for longer.

Mr GUTWEIN - In fact, we are taking less money out of people's pockets than what you propose in that document.

Ms O'CONNOR - No. We are taxing the Federal Group.

Mr GUTWEIN - Yes, you are. You have more money. Whose pockets do those taxes come out of?

Ms O'CONNOR - I don't know. There is about $2 billion in their bank account, so who knows?

Mr GUTWEIN - I think we will have to agree to disagree on that.

Ms O'CONNOR - Treasurer, back to your criticism of our alternative budget, so the record is clear with the question attached, if you tax a higher proportion of EGM expenditure, players are not losing more money, venues are only making less profit. The question is, under Section 2 of the proposed new Part 7 to Schedule 5 in the draft gaming control amendment bill -

An existing licence holder may be allowed to acquire gambling equipment in the lead-up period, prior to the new licensing arrangements being in place.

There is no prerequisite that this licence holder has been granted a venue licence under the new regime prior to being allowed to purchase EGM equipment. Is this because you already know who you intend to grant new licences to?

CHAIR - Before you answer that Treasurer. Ms O'Connor, you correctly pointed out that we are here to scrutinise the Government's Budget. I am sure you don't need me to tell you that if you lead with a reference to your alternative budget in the question, you leave yourself open to the Treasurer responding in kind by coming back to it.

Ms O'CONNOR - Sure. I wanted him to understand our policy rather than misrepresent it. I am particularly interested in how people can get EGM equipment before the new licensing arrangements are in place. It is mindboggling.

Mr GUTWEIN - Unless Mr Root wants to provide some further information, I will take that on notice and I will respond back. That was a very detailed question. Both the Chair and yourself have provided me with ample opportunity to talk about your alternative and the migration that would occur if you closed pubs and clubs into casinos for people who want to spend their money there on those machines. Quite rightly, you have indicated you would see -

Ms O'CONNOR - Less profit for venues.

Mr GUTWEIN - revenues stay broadly the same, in fact, increase under you. That is a question of detail. I do not have that available to me.

Ms O'CONNOR - This is one of the features of the amendments - the draft bill allows for a venue or a person to acquire poker machines and EGM equipment before the new licensing arrangement is in place. Why?

Mr GUTWEIN - As I have said, that is a detailed question and I will take it on notice -

Ms O'CONNOR - It is a matter of policy.

Mr GUTWEIN - and I will provide you with a response.

Ms O'CONNOR - Okay. Treasurer, your draft bill allows you to direct the commission in relation to the endorsement of gaming machine authorities. Do you recognise that this is a recipe for corruption? I am not pointing to you in that manner, although the arrangements make it possible for a future treasurer. Why do you believe it's appropriate to give the Treasurer this power?

Mr GUTWEIN - Again, matters of detail - I don't have the bill in front of me, nor the advice that surrounds it. I'm happy to take it on notice and provide you with a response, unless Treasury wants to provide -

Ms O'CONNOR - These are matters of significant public interest. Auto refreshed for another 20 years.

Mr GUTWEIN - Regarding the first question, in terms of buying equipment or other matters, I'll take that on notice. The question you've asked in regards to authorities, I'll take that on notice as well.

Ms O'CONNOR - I'm very disappointed that you don't know the details of your own policy.

Ms O'CONNOR - Treasurer, your draft Gaming Control Amendment (Future Gaming Market) Bill 2021, exempts current licence holders from having to demonstrate the applicant's premises as suitable for the management and operation of gaming machines or for Keno or both, that the applicant has a legal right to occupy the premises which are the subject of the application, the size, layout and facilities of the applicant's premises are suitable and the proposed security arrangements are adequate.

Treasurer, in order to apply for a licence, it appears these exemptions apply to any venue the operator wishes to apply for regardless of whether that venue is currently licensed for gaming. Why is this exemption for existing licence holders in your draft bill?

Mr GUTWEIN - I presume because it is expected they are meeting the law as it currently stands at the moment and that will roll over when the new arrangements take place.

Ms O'CONNOR - That relates to the previous question you asked me to put on notice about why venues can purchase EGM equipment despite not having a licence. There is a set of assumptions in your gaming market policy about the venues that will be given licences, isn't there? That the existing venues will all receive licences?

Mr GUTWEIN - Should they want one, yes. As long as they have been acting lawfully then they will receive a licence.

Ms O'CONNOR - Can you confirm that these exemptions, this particular bundle of arrangements, were the ones that were argued for by Federal Group?

Mr GUTWEIN - No, I can't confirm that. They haven't argued that with me.

Ms O'CONNOR - Is it your understanding that it was the Federal Group and the THA's preference that these arrangements be in place which exempt current licence holders from having to demonstrate things I listed before?

Mr GUTWEIN - If someone wants to open a new premise, then they need to go through the community interest test, which we have introduced. I am pleased that we have. They would go through that process. If they are an existing gaming venue then there will be a new regulatory regime that applies, but they will automatically roll over into it, as long as they haven't been acting unlawfully.

Ms O'CONNOR - You talked about how you thought your Government was perfectly clear with Tasmanians about what the future gaming market policy would be, and that was your justification for not detailing any of the financial aspects of it before or during the election. Neither did you tell the people of Tasmania that there would be simulated horse racing or employee-free table games. Do you acknowledge that the package in the amendment bill is not the package you told the Tasmanian people would be delivered, at whatever point you were being honest about it?

Mr GUTWEIN - No I don't. In the policy we took to the 2018 election, hotels and clubs do better, the state does better and the loser out of all of this would be Federal Group. That is the policy we have delivered.

Ms O'CONNOR - That’s not quite true. Your policy did not contain fully automated table games and your policy did not contain simulated horse racing, did it?

Mr GUTWEIN - Those two matters could be applied for at any time. I feel that I have been frank and upfront with the Tasmanian people in terms of our gaming policy.

Ms O'CONNOR - When?

Mr GUTWEIN - I've been speaking about it for the last three years.

Ms O'CONNOR - Except during the election campaign.

Mr GUTWEIN - I had a lot of opportunities where I spoke about gaming during the election campaign. I made it clear that the policy we would deliver would be the policy that we took to the election in 2018. Those outcomes were that the state would do better, hotels and clubs would do better and for Federal Group the monopoly would end and they would do worse.

Ms O'CONNOR - You didn't tell Tasmanians that there would be the eternity clause in the legislation which allowed for 20-year licences to be handed in after five years and then rolled over at a further 20 years. You didn't tell Tasmanians that this legislation would embed poker machines on this island for eternity, as long as there are humans here?

Mr GUTWEIN - The point that I made during the election campaign was that we would release a full package. It would be available for public consultation. That is occurring at the moment. We have received feedback on it and parliament will be the final arbiter.

Ms O'CONNOR - Yes, but the parliament has been stitched up by the THA.

Ms O'CONNOR - Treasurer, I want to talk about the community support levy and what your Government's thinking is, going forward. There's no clarity in the draft amendment bill about how the CSL will be distributed. As you know, the CSL has provided for all the human cost of poker machines, and it has provided some positives. What's the thinking on how the CSL will be distributed, and to what purpose?

Mr GUTWEIN - In terms of the doubling of that CSL, I expect we would consult with the sector. At the moment there's a breakdown of the current CSL. Some of it goes to sporting clubs and associations, and to support other grants, but then part of it is reinvested in other measures as well.

I think it's a good opportunity between now and 2023 to have a discussion with the sector and look at how we might expend that doubling of the CSL. I do think that supporting Neighbourhood Houses and small community infrastructure builds through rents is sensible, but I'm certain there'll be some in the sector with a firm view about how they'd like to see that increased CSL spent. We'll consult and then make decisions.

Ms O'CONNOR - My understanding is that there's a bit of concern across the sector that the consultation on the future CSL distribution is being very narrowly targeted. Are you aware of these concerns, and are you aware of who is being asked their view on the future distribution of the CSL?

Mr GUTWEIN - Not at this stage, but now that you've raised it I will ensure that I am fully aware.

Ms O'CONNOR - Okay. Just as the CSL's distribution now is prescribed in legislation as 25 per cent, 25 per cent, 50 per cent , to avoid future misuse of those funds and potentially distributing them during an election to various sporting clubs, is it your policy to see the CSL distribution prescribed in legislation?

Mr GUTWEIN - I had better take advice on that.

Ms O'CONNOR - I'm surprised you don't just say yes to that question, to be honest.

Mr GUTWEIN - In terms of the expenditure of those funds to sporting clubs in the lead-up to elections, I'm presuming that you're pointing at another government, not mine.

Ms O'CONNOR - Not necessarily, but we'll get to that later.

Mr GUTWEIN - Very good. I will need to take advice on it. I don't have anything in front of me at the moment.

Ms O'CONNOR - I just need to clarify this for the community sector and for people who may benefit from the CSL distribution in future. Are you suggesting that how the CSL is spent might not be prescribed as part of the regulatory framework?

Mr GUTWEIN - If you want confirmation that it would be prescribed and spent in certain areas, yes it will be. It will not be in any way, shape or form used as a discretionary fund of government. It will have a prescribed purpose.