Tuesday, 16 June 2009

Taxes and Pre-Commitment

On 3 June I wrote to Dr Mark Zirsak (Chair of the Victorian InterChurch Gambling Taskforce) setting out the text of my last blog. Here's his reply:
On the issue of taxes, the Taskforce has adopted a position that over time we want to see Government dependence on pokies revenue reduced, but not in order to deliver more profit to the gambling industry. The pokies industry has been grossly undertaxed in Victoria and has been able to extract monopoly rents. See the review that was conducted under National Competition Policy by Marsden and Jacobs, which estimated that Tatts and TABCORP were both extracting internal rates of return after tax of 20 - 25%. We want harm minimisation measures, and these will result in a reduction in revenue, but of the losses from gamblers we believe that there is greater community benefit from higher taxes rather than higher profits to the industry. Your position seems to be to see an increase in industry profit through a reduction in taxes.

I do not know how you can say you are for pre-commitment and then say you are working with Clubs Victoria. Let me assure you that Clubs Victoria is not supportive of an effective pre-commitment system. I think what they say to Government is far more important in terms of their position on pre-commitment. Perhaps you could point me to a public statement that Clubs Victoria has made in which they outline the features of the pre-commitment system they would support. As a benchmark, here are the features the Taskforce would ideally want from a pre-commitment system:

- in legislation

- On all EGMs that are linked together

- All gamblers must have an access device and that device must be consistent for all EGMs

- A gambler cannot use an EGM without the access device

- When a gambler hits one of their limits they cannot gamble for the remaining time the limit applied or until they change their limit, which would be a minimum of 24 hours

- The pre-commitment system will allow for data tracking of all gamblers (although this will be de-identified unless the consent of the gambler has been given for identification)

I fact have a look at the Clubs Australia submission to the Productivity Commission inquiry and the section on pre-commitment. The Clubs Victoria policy person said that the Clubs Australia submission to the Productivity Commission represented the position of Clubs Victoria.

I would ask you to consider that it might be more beneficial to actually take the time to talk to other community groups in detail before you launch into public criticism on your blog site or on radio. You don't have to agree with the positions we take, but it might provide you with information so you are not doing things like aligning yourself with the industry body that, in the opinion of many, is most opposed to any reform around pokies in the state (even other gambling industry bodies complain about how opposed Clubs Victoria is to measures to curb problem gambling).
My view is that making pre-commitment compulsory will go a long way to lessening the harm that pokies cause to pokie addicts. If the numbers are correct and that a large part of the revenue the industry earns is earned from pokie addicts, then there needs to be incentive for the industry to adopt effective compulsory pre-commitment which will reduce their revenue. Raising taxes does not address solutions. Providing incentives will.

Dr Zirsak and I obviously do not agree. I believe that lack of effective incentive lead to the Victorian Parliament pushing effective pre-committment procedures off for another decade. Notwithstanding, Dr Zirsak's views and solutions should be widely distributed.

Debate is good.

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