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.

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