Saturday, April 19, 2008

Saturday Forum: Our nation's capital is also the nation's poker machine capital

Welcome to Canberra, delegates.

We in the Australian Capital Territory have long prided ourselves on our support of progressive causes.

The only state of territory to vote for a republic at the referendum (and overwhelmingly so), more than 60 per cent of us regularly vote Labor after preferences are distributed.

We introduced Australia’s first Human Rights Act, we were the first to recognise same-sex unions (until the Commonwealth overruled us) and our Chief Minister Jon Stanhope is only one to have stood up to the former Prime Minister John Howard over his Anti-Terrorism Bill.

Our households are keen on green power, recycled water and banning plastic bags.

But suddenly, on the issues that matter to the new Prime Minister, we are getting left behind.

The new wave of causes being pushed by Kevin Rudd seem less than attractive to the man who is by now Australia’s longest-serving state or territory leader...

Jon Stanhope is vocal in his support of the ACT’s poker machine operators.

He has told our Legislative Assembly that when most people play the poker machines “there is no harm done to anyone”. “Imagine Canberra without our clubs,” he has said.

He won’t cut the number of machines and he won’t ban automatic tellers from the venues that house them.

Kevin Rudd wants to do both. He is having success with other states.

Queensland’s Premier this week cut the cap on poker machines and stopped them operating before 10.00am. Victoria said it would remove ATMs from pokies venues in 2012 when it ends the billion-dollar pokies duopoly enjoyed by Tattersall’s and Tabcorp.

But our leader offered nothing.

And he hasn’t been to the forefront on electoral reform.

Kevin Rudd has proposed capping the size of political donations. The NSW Premier Morris Iemma this week said he wanted to ban them altogether.

The ACT was in the uncomfortable position of being upstaged by NSW – the state whose electoral sleaze was laid bare on Four Corners this week in a program entitled “Dirty Sexy Money”.

In the ACT the money to run the local Labor Party’s election campaigns comes predominantly from the operators of poker machines. In no other state is the ruling party so funded.

Tim Costello, who will be chairing a forum that will discuss gambling at this weekend’s 2020 Summit says our Chief Minister is “brought to you by the gaming industry, he's an extension of the gaming industry”.

The latest Electoral Commission returns show why.

According to their figures, in the last financial year $238,552 of the ACT Labor Party’s $587,123 of income came from just one donor – the Canberra Labor Club, a money-making machine that operates more than 400 poker machines at its venues in Civic, Belconnen, Charnwood and Weston Creek.

The Canberra Labor Club is the seventh-biggest political donor in the entire nation, and by far the biggest in the ACT.

The Electoral CommissionA says the ACT ALP’s next biggest donor is the Woden Tradesmen's Club, which happens also to be an operator of poker machines.

ClubsACT says there is nothing surprising about these donations to the ALP. Its President David Lalor wrote in The Canberra Times last year that the Labor Club was “set up to support the ALP”, just as the Hellenic Club supports the Greek community, the Ainslie Football Club supports the AFL, and the Vikings Group the rugby union.

But the electoral commission records suggest that the Canberra Labor Club hasn’t supported the ALP by fund raising in the traditional sense. Neither in the last financial year when the threshold for reporting donations to organisations such as the Labor Club was $10,300 nor in the previous two years when the threshold was $1,500 did it report receiving any donations to advance the Labor cause.

Instead it has operated as a business, operating poker machines.

The purveyors of businesses such as the Canberra Labor Club are treated more gently here than they are anywhere else in Australia.

This graph, sourced from the industry-funded Australasian Gaming Council tells the story. The ACT has more poker machines per head than does any other state in the nation, even the supposed poker machine capital of NSW.

At 20.7 machines per 1,000 adults, we have more than NSW at 19.5 and almost half as much again as does Australia as a whole at 13.

On average each ACT resident pumps $746 into the machines each year, the second-highest spending rate in the nation, behind NSW.

And yet oddly, the ACT has taxed the purveyors of poker machines much less than has the typical Australian state.

Taxation figures released this week show that the ACT Treasury made $31 million from gambling machine tax last financial year – around $90 per resident.

But Australia-wide the total was $140 per resident. In NSW it was $160 per resident.

Our government has been prepared to both tolerate more poker machines per head than any other state and to raise much less revenue from them (although it did announce a tax increase in its last budget).

And it has been also extraordinarily protective of the special position of clubs such as the Canberra Labor Club when it comes to deciding where the poker machines should be housed.

Every other state of territory has allowed poker machines in its casino. Not the ACT.

Every other state or territory that does allow poker machines in clubs, also allows a fair few in its hotels. Not the ACT.

Whereas in Victoria the poker machines are evenly split between the clubs and hotels, and in NSW the clubs have three times as many as do the hotels, in the ACT the clubs have 5,000 poker machines to the hotels 100-odd, according to the Gaming Council.

The ACT Labor Party - predominantly funded by the purveyors of poker machines - allows more of them to operate more than would be allowed anywhere else, taxes them more lightly, and appears to protect the operators from competition.

The Chief Minister maintains that for most of us of us his support for poker machines is harmless. He has told The Canberra Times that he sees them as “an outlet” and has asked: “Who am I to deny people their pleasure?”

There is much that is good about the clubs that operate poker machines. They keep ACT residents from going across the border to Queanbeyan to play the pokies as used to happen before the pokes were allowed in almost 30 years ago.

Around 500,000 of us are members of the clubs, although many of us have joined for the food rather than pokies and would probably be happier if their spinning wheels fell silent.

The ACT’s clubs are required to spend 7 per cent of their poker machine revenue on sporting and other community activities, even if they are required to pay less tax than they would have to elsewhere.

And we should be able to cope with a high concentration of machines better than the residents of other states. We earn more.

For that reason the amount we spent on pokies is low as a proportion of income compared to other states, although it is creeping up.

No more of our gamblers are “problem gamblers” than is typical in the rest of Australia, according to the Productivity Commission.

But nevertheless, perhaps because of our high incomes, we’ve proven ourselves to be particularly bad at handling the money we gamble with.

The Gaming Council says the ACT has the highest gambling and speculation related bankruptcy rate in the country.

While our population is a mere 1.6 per cent of Australia’s total, we account for 4.8 per cent of Australia’s gambling-related business bankruptcies and 5.8 per cent of gambling related personal bankruptcies.

Our government could act to reduce this toll, as Kevin Rudd wants. It could eliminate the use of $10 and $5 notes in the machines and limit them to coins. It could ban ATMs, which in many Act clubs are sited just metres away from the machines.

It could wind back the number of licences, and push up the tax rate to the Australian standard.

Refusing to accept political donations from the gambling industry might be a big ask, given that it provides half the ACT Labor Party’s income, but outlawing political donations of any kind, as NSW says it wants to, might not be.

An end to political donations (or at least a limit on their size – perhaps to $2,000 per donor) would ensure that the Labor Party’s local business-funded opponents were never able to outspend it, and should be electorally popular.

Jon Stanhope hasn’t left it too late to show leadership on both issues, but the doors are closing.

In seven weeks time South Australia’s extraordinarily popular “No Pokies” politician Nick Xenophon will join the Senate. He will be keen to forge alliances to wind back the pokies industry nationwide. The Prime Minister has already indicated that he is on side, and the 2006 WorkChoices High Court case established that the Commonwealth had the power to override the states when it comes to regulating corporations.

Should there be any lingering doubt about the Commonwealth’s power in this area, it could start by imposing tougher controls on poker machines in the ACT, where it has undisputed ultimate authority.

The ACT Chief Minister could avert this possibility by showing that he is as serious about winding back the influence of poker machines as are the Premiers of Queensland and Victoria.

And in the ACT’s May Budget he could push the tax take from poker machines up to the Australian standard.

Without action, the ACT and the ACT Labor Party are at risk of being punished financially.

With less tax taken from poker machines than the Australian standard, the ACT is setting itself up for less compensation than other states when the Commonwealth or the Commonwealth and the states in combination take action.

And with more than $200,000 of the ACT Labor Party’s funds sourced from one donor in the poker machine industry it is setting itself up for a collapse in revenue should donations be limited.

It is a good time to wean both the ACT and ACT Labor off their poker machine addictions.


Related Posts

Labor - whose party is it?

Ban large political donations. Starting here, starting now.

The city the poker machines ate.


7 comments:

Peter said...

David Lalor, the president of Clubs ACT writes in the Canberra Times on Tuesday April 22, 2008:

"No back-room deals here"

ACT clubs have provided gaming for Canberrans for more than 30 years in a responsible and highly regulated way.

Successive ACT governments (not just the ALP) have not allowed the explosion in gaming that has characterised NSW, Victoria, South Australia and Queensland in the past 10 years.

Obviously, Peter Martin ("Labor's gamble", April 19, pB1) has not been to these state capitals recently, where there are poker machines in pubs on practically every street corner (71,000) and 12,000 in the casinos with the profits from these machines going to support the lifestyles of massively wealthy individuals and private syndicates, and Australian and foreign owned corporations.

In contrast, community-based clubs in the ACT are not about making a profit for a few, they are about spreading their operating surplus across the community by investing in club facilities for the benefit of their members and in support of the broader Canberra community.

The ACT Government should make no apology that clubs are the only providers of gaming machines in Canberra the demarcation between the ACT's model of community-based gaming as opposed to privately-owned gaming is clear, unequivocal and defensible socially.

It is a distinction worth fighting to preserve. In fact, this is a situation that we believe the other jurisdictions would be more than happy to return to.

In response to the mantra "Not the ACT" when referring to the lack of poker machines in the hotels and the casino, we believe most Canberrans would clearly say, "Yes, and that is the way we want it to stay."

Peter Martin should not presume to speak for the hundreds of thousands of club members who go to Canberra's clubs for a range of hospitality and entertainment options, including eating, drinking (in moderation), social interaction, shows, to have a wager on the horses and, yes, the playing of poker machines.

In trotting out information that is either three to four years old or, in the case of the Productivity Commission, nearly 10 years old, Martin ignores many of the facts, including the most recent Socio-Economic Impact Study of clubs in the ACT compiled by the Allen Consulting Group, which shows that the level of gaming revenue in clubs has dropped over the past five years by almost 3 per cent and gaming revenue as a proportion of total revenue is down 8 per cent. We would suggest this is in marked contrast to the trend in other jurisdictions.

But despite the downturn in revenue, ACT clubs have continued to apply the proceeds of gaming to the provision of community and sporting infrastructure much of which would not otherwise exist, the most recent example being a $1 million three-year commitment with ACTTAB to support the Clubcare Program provided by Lifeline Canberra.

He fails to acknowledge that the ACT has one of the most responsible gaming environments in Australia with a strong mandatory code of practice, a cap on machines that has been in place for 10 years, no ATMs in the gaming rooms, note acceptor restrictions, trading hour restrictions, the responsible service of alcohol and gaming, and the list goes on. So much for the lack of leadership by Jon Stanhope and his Government in fact, some of the other states are just catching up in response to the explosion in poker machine access and privateering.

Martin draws a totally spurious analogy between developers and others providing funds to political parties in NSW with the completely transparent situation of the Canberra Labor Club, which was established some 30 years ago with the clear and openly stated objective of supporting the ALP in the ACT there are no back-room deals here!

Sure, the Canberra Labor Club earns some of its revenue from the operation of poker machines, which is by the way a totally legitimate form of entertainment in the ACT and in every other Australian jurisdiction. The fact that it is not earned from speculating on the share market or some other form of commercial activity or the more traditional sources of income for other political parties (donations from business etc) is somehow seen as unfair.

Successive ACT governments have backed a winner with the community-based gaming model, and there are no compelling reasons for the present Government to switch tack now. On the contrary, we believe it should be exemplified and taken up by the Prime Minister, Kevin Rudd, as the preferred model in Australia a faint hope in the face of powerful vested private interests.

David Lalor is president of Clubs ACT

Letters said...

Letter to Editor, April 22

WE ARE ALL INDIVIDUALS

I wish to disassociate myself from the opening paragraphs of Peter Martin's article ''Labor's Gamble' (Forum, April 19, pB1).

I may be a resident of the People's Democratic
Republic of the ACT, but that is as far as it goes.

Mike Heath, Greenway

Letter said...

Letter to Editor, April 22, 2008

Members' welfare

Peter Martin (''Labor's gamble'', April 19, pB1) pointed out the economic and political aspects of poker machines and clubs in Canberra.

He must have felt that he didn't need to stress social consequences of poker machines.

The bankruptcies he mentions representdeprived children, families torn apart, and wrecked lives.As he says, many of the community are members of clubs not for the pokies but for the food.

Club members benefit from subsidised drink and food prices and increased amenity at their facilities.It is not only the ACT Government that is riding on the backs of problem gamblers and their families.

It's ironic that the charter of clubs involves the welfare of all their members and that major clubs in Canberra have affiliations with the labour movement and the largest Christian church.

John Bromhead, Rivett

Letter said...

Letter to Editor, April 20, 2008

Ploughing the money back

IN RESPONSE to Peter Martin's article in yesterday's The Canberra Times (''Labor's gamble'', April 19, pB1), Martin forgets a very important part of clubs and pokie machine ownership in Canberra.

Clubs must by law, and in accordance with their constitutions, return all profits to members and in effect the community.

This is on top of the 7 per cent of community contributions that are made.

This return of profits usually takes the form of subsidised drink and food prices and increased amenity at their facilities.

Hotels and casinos return their profits to their private owners.

Why would anyone want the profit from poker machines going to private owners?

This is one good reason why the local government shouldn't need to tax pokies at the same level as other states.

The recent tax increases and legislation changes have already forced some clubs and community groups to fold.

Clubs in Canberra are run for the community, not private gain.

To also suggest that clubs and their facilities would exist and operate at the level they do if ''their spinning wheels fell silent'' is an absolute fantasy.

I agree that the local Labor party has an unhealthy reliance on donations from the Labor Club but some credit must be given to those who built the club up to support its cause.

A.Smith, Aranda

Letter said...

Letter to Editor, April 24, 2008

Notion of public benefit from poker machines defies logic

David Lalor argues the ACT community benefits from poker machines (''Public benefit from pokies'', April 22, p13).

The article is notable for its lack of logic, non sequiturs and even makes reference to a cuddly euphemism ''community-based gaming'', which we are told is a new preferred model.

I'm sure this is comforting to those who have lost their savings and loved ones as a consequence of gambling addiction.

Lalor's argument rests on two questionableassumptions.

Firstly, poker machines are a necessaryevil and it's better that profits go back to ''the community'' than to private owners.

Secondly, a ''few'' individuals must suffer for the many to benefit.

If we don't accept this argument to justify torture, why would we accept it when it comes to gambling?The article does not make any mention of the socially dysfunctional nature of poker machines.Come to think of it, David Lalor has the makings of a fine politician.

Paul Kringas, Giralang

Letter said...

Letter to Editor, April 25, 2008

Pokies and charities

It makes sense that president of Clubs ACT David Lalor would be in favour of poker machines (''Public benefit from pokies'', April 22, p13) as ACT clubs would expect nothing less.

Poker machines and gambling do create welfare dollars, as Lalor demonstrates using the ACTTAB $1million three-year commitment to Clubcare, a program provided by Lifeline.

This type of Robin Hood analysis, of the good things that gambling can do, is childlike as it tries to give credibility to something that is clearly wrong.

In addition, charitable organisations, in my opinion, must not sleep well knowing that the money collected to treat the needy is from gamblers, who are in greater need.

Both clubs and charities may need to rethink how they can best support those in need as we enter the new Kevin Rudd era, as he is prepared to listen concerning the reduction of poker machines in clubs.

David Cavill, Kambah

Letter said...

Letter to Editor, April 26, 2008

Plus side to pokies

While I have no wish to become involved in the poker machine arguement I would like to say that without the intervention of the Ainslie Football and Social Club with its poker machine revenues, the Canberra City Bowling Club would not exist today.

Instead its magnificent site in Braddon would be growing weeds or covered in units.

We came within hours of shuttingthe bowling club down seven or eight years ago because we could not pay our way.

An appeal to Ainslie brought a timely cash injection followedby other assistance.

All of this help kept us afloat while lengthy and difficult negotiations ensued before Canberra City became a member of the Ainslie organisation.

I for one will always be grateful to Ainslie for rescuing a community sporting club, which is now heading towards 80 years of existence in a pretty healthy state.

Without poker machine revenues Ainslie could not have saved us.

The person who headed Ainslie at the time and led the rescue mission was David Lalor, ridiculed in the letters column (April 24) for his poker machine/community benefits views by a Giralang correspondent.

Graeme Barrow, former president, Canberra City Bowling Club, Hackett

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