Responsible Gambling Bill

I move, That the Responsible Gambling Bill be now read a second time. I am pleased to present this bill to the House.

Gambling is a complex area that has strong and competing interests. The bill addresses these interests in a fair and transparent manner. May I say, at this stage, that I am grateful to the United Future party for the constructive approach its members have taken to the bill. The gambling sector is currently governed by more than one piece of legislation. Each has different objectives and treats gambling providers in different ways. This bill is the result of a review conducted in 2001. It repeals the Gaming and Lotteries Act and the Casino Control Act, and creates a single framework. Aspects of racing are also included within the framework. The bill has four main objectives: to control the growth of gambling; to minimise the harm caused by gambling; to ensure that gambling is primarily used to raise funds for the community; and to ensure community involvement in decisions about the availability of gambling.

The bill was introduced in February 2002. It was read a first time and referred to the Government Administration Committee on 26 February 2002. The committee considered over 1,400 submissions. This clearly illustrates the high level of public interest in this area. I would like to take this opportunity to thank the members of the committee, including past members, for their hard work and dedication in considering those submissions, debating the issues, and making many improvements to the bill. The bill is the result of many months of hard work and dozens of Cabinet papers. These papers are available on the Internal Affairs website so that people can see what Ministers considered and what decisions they made. Putting this material on the website is one aspect of our efforts to make sure the review was as open and transparent as possible. Despite this access, and the provision of a large volume of plain English information, a number of members of this House have continued to give out inaccurate information. I can tell the House that sitting opposite is Judith Collins, who told people that the Government would take all the money and have it distributed by the Lottery Grants Board. Nothing could be further from the truth. [Interruption] Oh yes, the member did. People got upset when members went around feeding misinformation, when the review material was on the website for everyone to see. All those secretaries who wrote the letters know the truth.

💬 Clayton Cosgrove: They made it up.

They made it up again. In particular, those members told community and sports groups that the bill will centralise the distribution of profits from non-casino gaming machines. I have made a number of statements about this in the House, in the media, and publicly to reassure people of that. Of course, the National Party will say that it was responsible. National Party members have never had responsibility on this bill, and Judith Collins, as a junior back-bench member, has a lot to learn.

I will now talk about what the bill does do. The bill sets out a risk-based approach to gambling. It classifies each type of gambling, according to potential harm. Gaming machines are very high risk. The bill imposes a more strict and stringent licensing regime, and is harder on gaming-machine operators. The committee has proposed many amendments to the bill. Some of these are new initiatives to support its key objectives, and some of them are minor technical issues. I am pleased that the committee has endorsed the basic framework of the bill. I am also pleased that the committee adopted the key principle from the Gaming and Lotteries Act, which is that non-commercial gaming is permitted only to raise funds for community purposes. This is very important when it comes to gaming machines.

The bill introduces an enhanced system of distributing gaming-machine profits to the community. Many people and organisations that made submissions on the gaming review were concerned that gaming-machine profits could be used for inappropriate purposes. Many submissions called for greater accountability. The bill incorporates a variety of new measures to address some of these concerns. For example, all gaming machines must be connected to an electronic monitoring system, and there are powers to specify maximum costs and minimum returns to community purposes. I would like to draw members’ attention to key amendments proposed by the committee to increase the public accountability of the distribution process. For example, societies will be required to publish how they distribute profits from gaming machines, where to obtain application forms, the process for dealing with complaints, and details of both successful and unsuccessful applications.

The committee also strengthened the provisions to keep people associated with commercial venues out of the grant distribution process. The provisions that ensure greater accountability may not sit comfortably with all non-casino gaming-machine operators. However, in my view, the need to limit the potential for abuse is paramount. We, as a society, will all benefit from a gaming-machine regime that is seen to have integrity, and that is transparent and fair.

Consultation on the bill also left me in no doubt that local communities want a greater say on the location and scale of gambling opportunities in their area. The bill supports the view that communities should be able to weigh up the benefits to their community funding, against the harm associated with gambling. The bill does this by requiring territorial authorities to develop gaming-machine venue policy, in consultation with their community. This policy must specify whether gaming-machine venues can be established in the district and, if so, where. The policy may also restrict the number of gaming machines that may be operating at a single venue. The committee has strengthened this section of the bill.

The committee has also proposed amendments to enhance the bill’s harm minimisation initiatives. The bill establishes a Gambling Commission. Some of its functions include considering appeals against certain decisions of the Secretary for Internal Affairs, and dealing with casino licensing conditions. The committee expanded its role to include providing advice to me, as Minister of Internal Affairs. It will advise me on the performance of its functions and the administration of the Act. The committee also proposes that the Gambling Commission should report annually to me, as Minister of Internal Affairs. I will present that report to Parliament. These are sensible amendments, which the Government is pleased to support.

The committee also recommended prohibiting new gaming machines with banknote acceptors. This includes both casino and non-casino machines. The Government appreciates the reasoning behind this proposal, but we have decided that we will permit those machines to incorporate banknote acceptor devices with a maximum denomination of $20.

I have concentrated on gaming machines in this speech because that is the greatest area of public concern and interest. However, the bill simplifies smaller, low-risk community fund-raising like raffles and housie. Most of the fund-raising may be conducted without a licence, provided the relevant rules are followed. Members will be please to note that, for next year’s Melbourne Cup—and I am sure the Speaker will be interested in this—sweepstake prize limits will have increased to a total of $500. I would like to advise the House that I intend to introduce a Supplementary Order Paper to the bill at the Committee stage. In addition to the banknote acceptor issue I raised earlier, the Supplementary Order Paper will cover issues that arose from the committee’s consideration of the bill, as well as a number of technical issues. I am pleased with the broad shape of the bill as amended. I believe it represents a giant leap forward in addressing the competing interests involved in the sector, and creates a pathway to work together for the benefit of the whole community. I commend this bill to the House.

It seems that the Minister is a little bit upset with me. That probably has to do with the fact that he is no longer in charge of the Responsible Gambling Bill. Although he is here today in the House to talk to us about the bill, the fact is that it has gone way past him. Other Ministers in Cabinet are dealing with this bill. It has gone to people like Trevor Mallard, and even further up than that. That is because this “Minister in charge of Internal Affairs, Leaky Buildings, and Agent Orange” is so completely out of his depth that he has to stand here today and make out as though he is in charge.

This bill was actually delayed, by an awfully long time—by 4 years. Part of that delay was caused by the fact that Labour was trying to cook up a deal. At first the deal was with the Greens, and I would like to thank Sue Bradford for putting out a press release and letting people know what the Greens wanted in relation to their deal. I see that she is nodding in acknowledgment. She has a brand new press release out today, which I have in front of me. So she let us know what Labour was doing with the Greens, and we were able to let sports clubs, charities, schools, and arts groups know exactly what was being planned. So if there has been a delay this year—and there has—it has been because of the great work of the National Party in Opposition letting people know what was being cooked up.

What happened? First, Sue Bradford let the cat out of the bag. Once we had told the people, Labour then had to go cap in hand around Parliament, around all the parties, to try to get someone to do a deal with. I understand that Labour is still doing its deal with United Future, and that, one day, this bill might get through to the Committee stage. Of course, it has to, because the moratorium on the establishment of new casinos finishes very soon—in fact, in just a couple of months. As the Government has come out and said it does not want any more licensed casinos because of the evils of gambling, we have to get this bill passed, or else the Minister will be going.

💬 Jim Peters: Is that right?

That is absolutely right. One of the issues with problem gambling—and we can all be concerned about problem gambling—is that it is not restricted to pokie machines or to casinos. If this Government had any thought at all for problem gambling, then in the last 4 years it would not have allowed the number of gaming machines out in the community, outside of casinos, to grow from 12,000 to 25,000. That is a disgrace, from a Government that came into power back in 1999, bleating on about the evils of casinos. All the licensed casinos in this country have fewer than 4,000 machines in total, but this Minister has sat there, doing nothing. He has allowed another 13,000 machines to be installed out there in the community, while he sits here, telling this Parliament that he thinks about problem gambling. Well, if that is what he knows about problem gambling, he does not know a lot. Problem gambling does not affect just people who use gaming machines. It affects people in the racing industry, and people in the sharebroking industry. Certainly, I have noted the Greens’ comments—and I agree with them—that the Hon Michael Cullen is always wanting to gamble our superannuation funds in offshore interests. If that is not gambling, what is?

The two biggest problem gamblers that this country has ever seen, apart from the Hon Michael Cullen, are the lawyers Renshaw and Edwards, who, between them, gambled away a total of $33 million on speculative deals, and on horses as well. It was all paid back by the lawyers of this country. They gambled $33 million, and not a pokie machine in sight, yet who is being punished? It is pokie-machine operators, charities, sports clubs, and schools. This Government, in the last 12 months, has increased the gaming levy that it has got from the machines. The hospitality industry tells me that it has had a huge increase, from $30 million to $90 million. That is a $60 million increase. What has the Government done with it? There is all this talk in the bill about problem-gambling levies, but what has the Government been doing with the $60 million? Under this bill, problem gambling is now a disease—and that is a nonsense. No gambler any longer has any personal responsibility, because under this bill gambling is always someone else’s fault. It is probably to do with genetics or a disease.

When I first went into the Casino Control Authority as its chairman I was very anti-gambling. I really cannot understand anyone who wants to gamble, at all, because I think it is a complete waste of time. But, having said that, I also learnt that between 2 and 6 percent of people who gamble are problem gamblers, and even the 6 percent of gamblers talked about are being talked about by the people who get all their money from casinos and gaming machines, because they are paid from them and provide services based on them. So they have an interest to find a large percentage of profit. The numbers of problem gamblers are in an extreme minority. I personally find it a disgrace that a Government that likes to rave on and on about problem gambling and its evils is quite happy to have its members go around supporting prostitution and its evils, as if, somehow or other, the sin of gambling is more depraved than the sin of prostitution. Personally, I find that view a disgrace. It shows that the Government is really about money. It is about wanting to grab money from pokie-machine operators, charities, schools, sports clubs, and art centres, because this Government does not trust people to be able to arrange their own affairs. It does not trust people to be able to organise their own funding—it does not trust its people. The fact is that most people can get along very well without the Government, and they enjoy doing so. That is why so many of the submissions to the select committee were about leaving the money locally—leaving it where it is—and letting people make their own arrangements.

I am pleased to be able to say that before I came into Parliament, and since the time I first brought up the issue of frauds and pokie machines in the National Business Review—a matter that has previously been brought into this House, again by the Green member, my friend Sue Bradford—I said that the Department of Internal Affairs had to get on to the matter and start using its powers to get rid of the fraud and the rorts in the gaming-machine industry. Thankfully, that problem did not affect all the machine operators, or even anything other than a tiny minority, but those people ruined a lot of the business of pokie machines. The Department of Internal Affairs, thankfully, got its act together and got itself a very competent compliance director, Keith Manch—I must say that I was on the panel that appointed him—who got tough on the problem and started to do the job that the department had, unfortunately, not done for years and years. It is really great to see the industry cleaned up, able to come out with its codes of conduct, and very satisfied that the work is being done.

One of the final points I would like to make today is about the Gaming Commission, which is a great idea and it should definitely be approved. The problem is that it has no teeth and no staff, and it will absolutely be a puppet of the Department of Internal Affairs. That is wrong, because there needs to be a distance between the department and the commission. Without that distance the department, with its taxing abilities, its ability to take away licences, and its ability to control everything that is going on, will become an empire that will kill the gaming industry in this country—to the extent that it will impose all sorts of costs. That is not a good thing.

I have a final point about this moratorium. The moratorium on casinos will not stop problem gambling, and such moratoriums never have. But what it does do is give Sky City in Auckland a monopoly. That company must be laughing all the way to the bank, as must be its shareholders. It means that there will be no competition in Auckland. In many ways the Sky City operation is a great operation, but it does not deserve to be a monopoly.

This is the first opportunity that I have had to comment on this bill. I want to make a few preliminary comments about the bill before I get into some of the changes that the select committee made to it and some of the changes that United Future would still like to see. No one would dispute that there is a need for an overhaul of the legislation. The present regime is not only confusing and spread thinly amongst too many Acts but also it has become obsolete and is no longer relevant. The law has become the business end of a donkey, and fails to deal with the technological innovations and forms of gambling that now dominate the sector.

United Future is now pleased to see the consolidation of gaming statutes into a single integrated piece of legislation that entails a coordinated, complementary, industry-wide approach. Under this bill, all forms of gambling are now consolidated into five classes, to cover casinos, gaming machines, lotteries, housie nights, organised raffles, and so on. As far as class 1 and class 2 gambling are concerned, I have to say it is pleasing to see that we can now hold an office sweepstake on Melbourne Cup Day without the politically correct brigade preventing us from having the simple pleasure of placing a bet and enjoying ourselves at least once a year.

The bill seeks to limit opportunities for crime and gambling, and to ensure fairness and integrity in gaming. The bill also intends to maximise profits of gaming to the community, as well as, for the first time, introduce an element of community involvement in the location of new gaming venues. Possibly the most contentious issue in the bill has been the future of the non-casino gaming industry. Concerns relating to the casino moratorium have been sidelined compared to the amount of interest and passion that the pokies seem to have generated. I suspect, like most of my colleagues, that we have been bombarded by lobby groups and representatives from associated sectors that rely on pokie money, local government representatives, sports groups, pro-gaming lobbyists, anti-gaming lobbyists, people who want less pokie regulation, and people who want fewer pokies.

My colleague Judy Turner recently received a letter from a local organisation in her area expressing concern at the proposed tax increases on gaming profits—in this case, from the local neighbourhood support group. This is hardly an isolated incident. Members of this House will, no doubt, have been flooded with letters from all sorts of community organisations that are now funded, in part, from gaming-machine profits. Let us be clear: United Future is in no way opposed to this. Money should go to such organisations. But is it not more than a bit disconcerting that organisations that provide some of the most basic services that one would expect in any First World society—emergency services like St John Ambulance, emergency helicopters and air ambulances, or research into lung disease and cancer—must now rely on profits from the gaming sector? The non-casino gaming-machine sector has grown rapidly over the last decade. Gaming machines have increased from 7,700 in 1994 to 25,221 as of this June. Today there are 129 societies and 579 clubs that, together, raised about $770 million last year. That figure represents approximately a 30 percent increase, in only a year, on the amount of money lost by gamblers and raised for the community. This increase has had an unfortunate social cost.

The Committee on Problem Gambling Management, a cross-sector body representative of all industry interests, reports that in 2001, 5,000 new clients sought help for problem gambling, the bulk of whom were addicted to pokie machines. More recently, the problem gambling helpline has reported a 21 percent increase just in the number of callers, prompting an extension to its services so as to be available 24 hours a day. We are pleased to see that, counterbalancing that, the bill does promote harm minimisation and ways of addressing problem gambling. It is all too easy for some just to condemn the machine operators, and condemn society’s trusts and clubs as money-hungry operators, known only for their uncaring infliction of gambling problems and dodgy financial practices. The industry is far from perfect—it admits as much itself. But several developments have reshaped the industry in major ways. There have been licensing changes by the Department of Internal Affairs. There has been the impact of foreknowledge of the upcoming provisions of this bill. There has been the provision of the voluntary code of practice by the Charity Gaming Association. Its members can account for about two-thirds of all machines, and it has already meant a more accountable and transparent process than the doomsayers suggest.

This bill is intended to ensure that these standards are enhanced and adhered to right across the sector. So instead of condemning the operators, it might pay to keep in mind all those sporting, community, emergency service, and cultural groups that benefit from the proceeds of the industry, as we might otherwise suffer a lacuna in the fabric of our civil society. Certainly, no Government could fill the void. It is my view that we must strike a reasonable balance between these two competing interests. We cannot ban gaming machines, yet we must maintain a sensible and responsible approach to some of its more harmful effects. United Future has worked hard, and will continue to work hard, with the Government to that end.

The Government Administration Committee made a number of changes to the bill, some of them good, and some that could have been a little better. We are pleased to see that the provisions of accountability and transparency between societies and pub operators have been reinforced. We applaud the extension of guidelines for territorial authorities to define the scope they and their communities have to play in determining the location of future gaming sites. I also note the work the committee did on ensuring accountability in the grants process, as well as the new requirement for charities to publish how their grants are allocated. If a charity frivolously funds the local league club’s trips to play in Aussie, it will soon become apparent.

In summary, United Future supports the second reading of this bill, but further support will be conditional on changes brought in during the Committee stage. We definitely flag our concerns with regard to a fair and open process for determining the problem gambling levy; no centralisation of profits—money spent locally should be returned locally—and greater independence of the gaming commission. United Future considers that the committee acted unconstructively with regard to banknote acceptors, without any opportunity for submissions at all. As a consequence, we would like to see a common-sense approach to banknote acceptors, and therefore push for its inclusion. There are a number of issues that we would still like to progress with the Government, and we will be progressing them with the Government. We will have a look at the bill during the Committee stage to see what can be done, and that will basically determine our future support for this bill. When the chips are down, members can always bank on United Future to bring in common sense.

This bill has many very good aspects that clear up a number of issues relating to methods of gambling across a wide spectrum of gambling in New Zealand. The main purpose of the bill is to tackle the proliferation of gaming machines or, as we like to refer to them, pokie machines, and also the growth in problem gambling.

However, clubs nationwide, and particularly sports groups and trusts, are convinced that the new law will cut funding to their bodies. Although the Government may be trumpeting other objectives, the reality is that this bill involves the centralisation of the distribution of gaming-machine funds, and will have serious consequences for sports, cultural, and service organisations. Centralised distribution systems, tangled in red tape, will siphon money away. Funds involving such large amounts ought to be distributed by independent community representatives, and the process of distribution needs to be open, fair, and accountable to the community. The bill in its present form does not meet those normal standards of transparency and accountability. The granting allocation process remains non-transparent and unclear, with different and sometimes unknown criteria used to make grants decisions.

New Zealand First cannot support any attempt by this Government to divert funding traditionally used to support local community activities into quasi-political causes sympathetic to the Government cause. The potential for political patronage is a real concern. Distribution to community projects via a centralised quasi-governmental agency, subject to political appointments and pressures, will not meet community needs. The chances of money raised in provincial New Zealand being returned from the centralised fund back to provincial New Zealand are virtually zero.

I refer to an example: my next-door neighbour’s little boy plays in a soccer team, and the team needs new clothes. It is only a small group and is unknown to the central bodies, so it will not receive any funding. It will be put into a huge pool and will end up missing out.

💬 Hon George Hawkins: That’s absolute rubbish.

The Minister is screaming out “Rubbish”. I ask the Minister to think about the way he has laid this bill out. It is set out so that individuals and small community groups will not receive the funding they deserve. The funds will be siphoned off into bigger projects—ones that are sympathetic to the Government’s cause. We have had plenty of examples of that already. This Government has proved itself to be that way inclined. The real cost of gambling is hidden because the effects are often manifested in other ways.

Community groups and social services are finding it increasingly difficult to access community funding other than that derived from gambling. Successive Governments have given greater emphasis to the role of the community in providing social services, yet they have failed to provide the funding, which forces local communities to rely on gambling profits. We only have to look at one very classic example—the rescue helicopter. It is not funded by the Government, therefore it relies heavily on donations, and it is increasingly being required to rely on gambling profits. To provide the funds that are really needed, they had to go to extremes, and unfortunately it all came unstuck. These are not optional services; they are essential services, and they should be funded directly by the Government and not have to rely on gambling profits taken straight out of pubs and clubs. That is not the way to fund those essential services.

The bill effectively creates two tiers of pokie-machine licences. The Government has capped the numbers of machines in certain areas, and reduced the number of pokie machines that can go into new venues. Although the bill caps individual machines, it does not cap the overall number in an area covered by a particular local authority, because local authorities are expected to put guidelines of their own into place. Those guidelines, and the public input into those guidelines, can take place only at the time councils and the local authorities formulate them. Once those guidelines are in place, this bill prevents public input from that point on. The public cannot provide any further input into decisions to reduce the number of machines in a particular location. The bill provides no time limit on pokie-machine licences, so a licence cannot be revoked by the community or local council, even when there is a change of ownership, or there is evidence that the machines are causing problems in the community. Those machines cannot be removed once they have been issued with a licence.

Many submitters argued that local authorities will lack the teeth to have a genuine say in the level of gambling in their communities, and unfortunately that is a major hole in this bill. If the bill progresses in its current form, local communities are the ones that will suffer because they will no longer have any say. They will miss out on funding because of the way that the centralised funding process will take place, and they will miss out on having their say on how many pokie machines will be allowed in their communities.

As the country has seen an increase in gambling, so gambling duties have increased, but this Government is adding an additional charge in respect of problem gambling over and above those increased levies and duties. One of the methods by which it hopes to reduce problem gambling is to take out banknote machines. Restricting banknote machines is not going to reduce the volume of gambling. People will find other ways of circumventing the lack of banknote machines, so there is absolutely no need to limit their numbers.

Another issue raised with us was the restriction on gambling via the Internet. There is no means by which gambling can be set up on the Internet, but that will not stop people gambling on the Internet. They will just gamble off shore, and any revenues gained from that will automatically go off shore. What is the point of that? The Government will not gain any revenue from offshore gambling; therefore, it has restricted that form of gambling.

I want to round up by saying that this bill has some very major flaws. I am disappointed that the Government is centralising the distribution of funds from pokie machines, the revenue from which will then go to the people who support the Government. It will go into a central fund and be distributed to those who have the biggest arguments for funding, but not to the local communities from which the money was withdrawn and gained from.

I have to answer some of the clear inaccuracies in the speech made by the previous speaker. This bill is designed to provide clearer accountability, and to ensure that the money does go back into communities. If the member would make the effort to read the bill, I am sure he would reach the same conclusion.

I congratulate my colleague George Hawkins on bringing this bill back into the House and overseeing its development. The current gambling legislation is out of date, and the Government is taking the necessary steps to address the rapid developments in gambling in recent years. I am confident that we have achieved the appropriate balance that is needed to ensure that we preserve the benefits of gambling, while at the same time delivering comprehensive measures to reduce the harm from gambling. For many people gambling is an enjoyable recreational activity, and we accept that.

About one-third of the revenue from non-casino gaming machines is put back into the community in the form of community grants, and the Government takes those factors into consideration when it looks at those issues. But problem gambling can be a destructive addiction that pulls families and communities apart. Lately it seems that we have only to pick up the occasional newspaper to see the evidence of the harm that problem gambling can cause society. On a daily basis, counsellors are seeing individuals who have defrauded their employers, lied, and carried out a lot of other unfortunate actions to feed their gambling habits.

Gambling opportunities have increased hugely in New Zealand over the past decade, which has meant that this Government has had to do something about the growing problems. We have six casinos in which to gamble, and poker machines can now be found from Kaitaia to Bluff, and even so far afield as the Chatham Islands. We have seen the number of machines go up from 8,000 in 1994 to more than 25,000 this year. That is a significant increase that we have to accept. The number of people seeking help through the telephone helpline has increased markedly, as well. In the same period, the number of people receiving personal counselling has tripled to almost 3,000 clients. Today almost 80 percent of problem gamblers admit that gaming machines have been the primary source of their problem.

The Responsible Gambling Bill is legislation that, for the first time, is designed to ensure that the benefits of gambling to the community are balanced against the growing issue of problem gambling in New Zealand. Furthermore, by taking a public health approach, New Zealand will be a world leader in that field. The Ministry of Health’s integrated problem-gambling strategy will incorporate three main elements to help problem gamblers and their families. As I said, they are a public health approach, funding problem-gambling services, and building up knowledge of problem gambling and what we can do to help people in need. The public health approach focuses on prevention. It aims to prevent gamblers becoming problem gamblers in the first place, and to raise public awareness of the risks associated with gambling. The funding of problem-gambling services will assist gamblers and their families who have been harmed by gambling. The ministry will take on a coordinated approach across all those services, linking them nationally, regionally, and on a local basis, as well.

Problem gambling can affect rural areas as well as urban areas, and it is important that people right throughout the country have access to assistance wherever they need it. The ministry is currently undertaking a needs assessment of problem gambling that can work in with its strategy. We have some strategies in place. Currently, we have a population survey programme, including the New Zealand health survey, the health behaviours survey, and the Pacific drug and alcohol survey, which are all designed to assist people in need. That work builds on the extensive consultation carried out in 2002 on the draft national plan for minimising gambling harm. As part of that consultation, we held meetings up and down the country to find out the best way of assisting people in need.

💬 Clayton Cosgrove: How many meetings did New Zealand First hold?

Not too many, given the lack of understanding of the bill currently before the House. I hope that members will make the effort—it is quite a big bill—to read through it and see that we have reached a good point of balance between ensuring that the benefits of gambling come back to the communities—as Mr Catchpole was seeking—and that we move ahead to address the growing problems associated with gambling in this country.

Problem-gambling services will be funded through the problem-gambling levy, which is a levy on the profits of the gambling industry. The levy for each gambling sector will take account of the harm caused by that sector, according to data from those seeking help for their gambling problems. It has been scientifically assessed that some forms of gaming with a shorter cycle time, like poker machines, have a greater tendency, unfortunately, to tie people to addiction. That is the reality, and we must address that.

I would like to thank the Committee on Problem Gambling Management for the fine work it has done over past years in addressing the issue of problem gambling. Its work will be surpassed by the commission, but it has done an invaluable amount of work in building up programmes to assist people who need help. That committee’s positive and helpful approach in dealing with the Ministry of Health will ensure that a seamless transition takes place when we shift responsibility to the Ministry of Health and the new commission.

It is heartening to see that gambling problems are now being recognised both in this bill and by industry groups themselves. Many industry organisations have taken significant steps to address the problem. The Charity Gaming Association’s code of practice, and the TAB itself, which has a host-responsibility programme, are just two examples of how the gambling industry is moving to address the issue of problem gambling. The comprehensive approach of this bill to maximising the benefit and minimising the harm caused by gambling is something that both this Government and the New Zealand people can be proud of.

Before I conclude, I would like to make a few comments in reference to my responsibilities as Minister for Racing. The bill formally recognises racing club activities as authorised purposes. That means that racing clubs will be able to apply gaming proceeds to promoting, controlling, and conducting race meetings. The bill also allows the TAB and racing clubs to operate gaming machines in TAB agencies, and on course, in their own right—provided, of course, that they satisfy the overall licensing regime.

I would like to put on record that it is a privilege for the racing industry to be allowed this opportunity to expand, but it must use that privilege responsibly. I am sure it will be part of the measures we have put in place through this bill to reduce the harm of problem gambling. Alongside other measures in the bill, that provision demonstrates our commitment to the racing industry. As Minister for Racing, I am happy to say that it will be a very positive move for the industry. We want to see it thrive, but, again, we want to minimise the harm caused by problem gambling.

I would like to thank United Future for its cooperation. There are still issues that we disagree on, but we have managed to work through some of them with that party. I also thank the Green Party. This bill has been promoted by my colleague George Hawkins, and I am sure that its passage through the House will give us good legislation that will both promote the benefits of gambling and address the issues around problem gambling.

I rise on behalf of ACT New Zealand to oppose this bill. I found the previous speaker’s speech very interesting. He described the bill as a good balance. I notice that the first reading was on 26 February 2002, which is quite some time ago—in fact well before I came to this House—and the fact we are only now having the second reading debate would indicate, I think, that there are some fundamental difficulties with this bill. We heard from the National member that the bill has been passed from Cabinet member to Cabinet member, and that does not seem to have done much good. The previous speaker, the Hon Damien O’Connor, thanked United Future members. He will have to thank them a lot more because it would seem that, having not given the bill their unconditional support, they still have great concerns with it. He also thanked the Greens, which is quite surprising. I do not think he realises that the Greens are proposing to oppose this bill, too. But, anyway, he will find that out in due course.

This bill has been introduced by an authoritarian Government that does not trust the citizens of this country. It wants to control the activities undertaken by New Zealanders, especially in areas where it thinks that people might be enjoying themselves or having some fun. The bill is aimed at giving far too much power to the State. ACT believes that New Zealanders should be free to spend their money as they choose. We know that a small number of people do have difficulty with gambling addiction, but the majority of New Zealanders should not be put at a disadvantage as a result of a small few, and I will come to how those people should be treated soon. This bill proposes to create a whole new structure of unaccountable bureaucrats in the Department of Internal Affairs. The current system is by no means perfect, but we believe that it is infinitely superior to what is proposed.

At the moment the Casino Control Authority is responsible for licensing and regulations, and underneath it sits the Department of Internal Affairs. The proposed structure has a gaming commission at the top, and we have heard from the National member, who knows a thing or two about gaming, that that is a good thing. However, it has no teeth, very few staff—and what will it achieve? Also, this gaming commission will be controlled by the Department of Internal Affairs and the Minister, and ACT is certainly opposed to that. Any commission must be independent. There must be a reasonable amount of distance between the gaming commission and the Department of Internal Affairs. The commission would have a limited licensing function, and it would deal with appeals. Underneath the commission is a huge horizontal layer of bureaucracy—the Department of Internal Affairs, responsible for everything involved with gaming; from gaming policy through to enforcement, licensing, regulation, and the servicing of the gaming commission and the servicing of the Lottery Grants Board. This structure is a great cause for worry. It will result in a lack of transparency and, like so many other Government departments that we have seen of late, a lack of accountability.

The distribution of funds from gaming machines is one of the major problems arising from the bill, and one that has had a lot of time devoted to it in the speeches we have heard so far. ACT is in favour of the status quo. The current system provides good checks and balances that ensure distribution is transparent and fair. That is very important, and it is paramount when we talk about money that is being distributed to the community. Trusts and charities are accountable to the department, and also to the public. The State, either in the form of central government or local government, should not have a role in distributing these funds, we believe. The temptation is always to grab these extra funds, in the form of taxation, and there is certainly plenty of evidence of this Labour Government doing that to date. We have had 16 new levies or taxes since Labour has come to power, and here is the opportunity for this to happen yet again. Charitable trusts, by and large, distribute money efficiently and fairly, and this is the most important point of all: pub charities, and the other organisations that are responsible for distributing these funds, know their communities best. They certainly know them much better than the bureaucrats in Wellington ever will.

The Minister, George Hawkins, said recently that the Government is determined to control the growth of gambling, minimise the harm it causes, involve New Zealanders in decision making about gambling, and ensure that gaming profits benefit the community. He has said that the Responsible Gambling Bill aims to achieve those objectives. Well, I think he is reading a different bill from the one I was reading. Certainly the bill I was reading did not talk about that. But I wonder whether his motivation comes from looking out of his own electorate office in Manurewa. I paid a visit to Manurewa recently, and parked across the road from George Hawkins’ electorate office. Do members know how many gaming outlets there are within a 1.5 kilometre radius of his office? There are 18. I visited at 3 o’clock in the afternoon, and had a wander around.

💬 Hon George Hawkins: How much did you spend?

I did not spend anything because I value my money. We wandered around, had a look, and virtually none of the machines were free. At 3 o’clock in the afternoon they were virtually all full. Also, interestingly, two more gaming outlets were being built or furnished. They were being set up. There was some urgency for this, because they thought the bill was about to have its second reading. It is some time down the track now, and we know about the fundamental problems that exist, but they thought they had to get their outlets outfitted very quickly so that they could install 18 machines, as opposed to nine. [Interruption] It is obvious that the Minister is worried about his own electorate and the problems that exist there.

Most of us have had letters—I certainly have—from small sporting groups, cultural groups, soccer clubs, tennis clubs, and the like. They are worried about their financial viability with this bill going through. They rely heavily on the proceeds they receive from the funds that are distributed locally. It is interesting to look at the smaller sporting clubs, such as soccer clubs and tennis clubs. We are constantly told by this Government that there is an obesity epidemic and a diabetes epidemic, particularly among children, in this country. Children are not exercising enough. We all know this—but what is this Government doing? It is now going to deprive the small sporting clubs that provide sporting opportunities and exercise for our children, on Saturday mornings and other days, by curtailing the funding available to them through gaming machines.

I have also had a lot of correspondence from groups like the Returned Services Association. I have a very interesting letter from the Mount Maunganui branch of the association. It sums up beautifully the concerns that many such organisations have. It is a larger Returned Services Association, one of the largest in the country I believe, with a membership in excess of 5,000. The letter says: “We and all other clubs have always acted responsibly in our gaming-machine operation.” They claim to be meticulous in that regard, and they say they have been regularly audited by the Department of Internal Affairs, and have received a clean report on every occasion, and even praise for their systems. They go on to say that their methods have been used by the department as an example for other clubs, and they point out that gaming revenue is an essential component of income for their club and for others that they know of. They also provide welfare assistance to their members, as a result of the funding they receive from gaming machines, thus relieving the burden that would otherwise fall on local authorities or on the Government.

Of real concern about the proposed legislation are the compliance costs, and, of course, there are many. There is the threat of increased duty. The Minister refuses to rule out, in answers to questions I have asked him, the possibility that the duty may go up from 20 to 25 percent. Also, there is talk of electronic monitoring, which is going to cost the clubs dearly. The changing of banknote acceptors is also a concern to them. Anybody who thinks that allowing the machines to take less money will make any difference at all is just not living in this world. People will just change their money and have smaller notes, which they will continue to use in exactly the same way. At the moment the Department of Internal Affairs has adequate powers to discipline the bad boys, or the cowboys, which the Returned Services Association explained to me. But this is only a minority of those operators, and, by and large, the system that operates at the moment does provide transparency.

I would like to wrap up by talking about problem gambling. It is interesting that the first person who even dared to mention the Ministry of Health, and the changeover from the current problem gambling committee to the Ministry of Health being responsible, was the last speaker. Nobody else has mentioned it, because we all know what a terrible job it is going to make of it. The problem gambling committee currently responsible for problem gambling has representatives from the industry and also from groups that are responsible for treating those with addiction. There is some tension between the two, but it works well.

It is always interesting to hear ACT members on gambling. They are experts, particularly when it comes to the economy, and they have a leader who was able to gamble with the whole country’s economy for quite a period of time. Fortunately, that period has gone. The Progressive party, being a responsible party, supports the Responsible Gambling Bill. We expect the law change will make a positive contribution to enhancing the safety of our communities. It will tackle one of the well-known contributions to the incidence of poverty afflicting some parts of our society.

As a member of Parliament with dual citizenship, I draw on my deep Australian roots to know something about gambling. Following in the tradition of dual citizens who are Australians, and giving the benefit of their erudition to this Parliament and previous ones, I can say that I like to take bets at the races and other sporting events. I even bet with my children on the All Blacks games, and because of my dual citizenship I am able to change my bet at half-time, depending on who is winning. But ever since arriving in Parliament 7 years ago, I have been aware that for some families gambling is not a simple issue of personal choice or individual freedom. The ACT party—and increasingly the National Party since its adoption of ACT’s key values and policies—talks a lot about choice and freedom. But, of course, every party represented in Parliament is a descendant of the liberal tradition that deeply values individual freedom and liberty.

As serious parliamentarians, we on this side of the House, in the Labour-Progressive coalition, also take into account the liberty and freedom of the children of those afflicted by chronic gambling problems. Life is never as simple as ACT party rhetoric or ideology implies. Most people would agree with Progressive’s view that the role of a responsible Government is to protect and enhance the well-being of all citizens. That includes the most vulnerable amongst us. My colleague Jim Anderton and I campaigned in the 1990s to support policies to minimise harm arising from problem gambling. The election of a centre-left coalition in late 1999 allowed us to deliver on that commitment, and the Responsible Gambling Bill was introduced to the House 2 years ago.

In October 2001, 2 years ago, there were 2,095 gaming-machine sites in New Zealand, with 20,597 machines. At 30 June this year, there were 25,221 gaming machines located in 2,122 gaming-machine sites. I look forward to the Committee stage of this debate, for consensus by Parliament to put in place measures to limit the explosion in pokies that New Zealand has experienced in recent years.

The legislation is a good example of MMP working. To get anything done in the House, we need 61 votes. In this case, it has required the cooperation of three parties, Labour, Progressive, and United Future, to get us above that critical threshold of 61 votes. It could have been more, but the Green Party sulked on this issue. The thing about MMP is that we negotiate; we try to get the most for the people we represent. This legislation is a progressive step in the right direction—in terms of where it goes, not in terms of politics—and is enough of a step that we can give it our support. I make the point that the bill is going forward because it has the support of the Progressives, with Labour and United Future. That gives us 62 votes. If we were to vote against it, the House would be evenly divided, 60-60, and the bill would be lost. But the thing about MMP is that we negotiate to get the most for the people we represent. This legislation is a progressive step in the right direction, and is enough of a step that we give it our support.

We know that pokies are the most addictive form of gambling, responsible for perhaps 70 percent of problem gamblers. A quarter of regular gaming-machine users experience gambling problems. There is a link between the number of pokies, the total losses on them, and the level of problem gambling. The parties that do support this bill know that what they are doing is a positive response to what community groups and anti-poverty campaigners are telling us. The community groups have been telling us for years that there is no question that gambling is a harmful activity for some people.

The purpose of the bill is to facilitate responsible gambling and ensure the integrity and fairness of games. Its intention is to limit opportunities for crime, dishonesty, and exploitation of the vulnerable by facilitating direct community involvement in decisions about the provisions of gambling. The bill introduces measures to enhance the accountability and transparency of the gambling system and improvements to the level of community input into determining the number and location of non-casino gaming machines. In short, this bill is an important part of the wide-ranging campaign to tackle poverty and make our communities safer.

When the Responsible Gambling Bill first appeared on the scene in October 2001 the Green Party was full of hope and enthusiasm about the progressive reforms we believed the Labour-Alliance coalition Government was introducing. Disturbed by the ever-growing numbers of non-casino gaming machines and rocketing rates of problem gambling we looked at things like the moratorium on new casinos and tighter regulation of pokies, and pledged our goodwill and support for this bill.

However, we then entered the select committee process. I sat on the Government Administration Committee for the duration of its consideration of the bill, and what an extensive and revealing experience that was. Although my background of working in the unemployed and beneficiaries movement had given me plenty of real life acquaintance with some of the problems associated with gambling, especially among low-income people, I had never before been so fully exposed to the realities of all sides of the gambling industry in Aotearoa - New Zealand. I think what shocked me above all else was one particular day that we spent listening to submissions in south Auckland. On the one hand, we heard people from the pub charities telling us how wonderful and good for the country their work is, and on the other, people from problem gambling services showed us maps that pinpoint precisely how the proprietors of pokie machines absolutely and deliberately establish them in the poorest parts of our cities, towns, and suburbs.

Many pokie parlours are deliberately situated and geared to attract mothers who have just walked their children to school, and beneficiaries with time on their hands and too little cash in their pockets. These places are established with the express purpose of extracting what little cash is left, whether a person is on $150 a week or $1,000 a week. The damage that is being caused to individuals, families, workplaces, and communities is a national disgrace. It has been made worse by the fact that we have had Governments that have deliberately allowed this situation to develop. We do not suddenly have over 27,000 pokie machines in New Zealand just by chance.

When the current Government took office at the end of 1999, and was advised of the major social and economic problems caused, particularly by the pernicious nature of pokie-machine gambling, there were around 16,000 machines in place. As at April 2003 there were 27,340, an increase of around 11,000. There is now a ratio of one pokie machine to 146 men, women, and children in our country. We think of America as the home of the casino and the slot machine, but even America has a ratio of 1:400, a figure that only one district in New Zealand, Waitakere City, can proudly beat. Even the previously untarnished Chatham Islands now has pokie machines—the mind boggles—and provincial areas like Taranaki and the Bay of Plenty continue to see significant increases. The prize for the highest ratio of machines to head of population goes, surprisingly, to the Kaikoura district, at one pokie machine for every 61 residents, with Queenstown and Thames-Coromandel chasing close behind.

What does all this mean, one might ask, and why are pokies such an issue? Statistics from last year show a 24 percent increase in the number of people seeking help with gambling addictions directly caused by gaming machines. Over 80 percent of new clients looking for assistance from problem gambling services last year attributed their problem to the pokies. Worryingly enough though these figures are, inside them lies another distressing trend; the fact that there has been a massive increase in the number of women seeking help for gambling addiction. In 1997 only 28.6 percent of problem gamblers receiving counselling were women. By 2002 they made up nearly 50 percent. The proportionately greater impact on children and families can easily be imagined, even by those who are not directly engaged in our ever-burgeoning problem gambling industry. The fact that this is happening at a time when the number of machines has risen by 11,000 leads any sane person to one conclusion only; that the proliferation of gaming machines in New Zealand has had a direct effect on the numbers of people afflicted by gambling addiction, and all the subsequent social, economic, physical, and psychological damage it causes.

I know the Government will be quick to respond by saying that this so-called Responsible Gambling Bill is a fine and totally adequate answer to the problem. As I said earlier, at first the Green Party, too, thought that this bill provided most of the answers, and that perhaps a few amendments during the select committee process would fix up the rough edges. However, this was not to be. As time went on it became increasingly clear that this bill, marketed as the solution to the social ills created by the proliferation of pokie machines and casinos, simply did not go far enough. By the end of 2002 the Green Party decided to withdraw its support for the bill. Since that time we have been working closely with a number of church organisations and community groups, and with Local Government New Zealand, in a bid, first of all, to ensure that all pokie machines and sites, not just those licensed after 17 October 2001, are covered by the bill in terms of local body control.

We believe that local councils and local people should be able to have the ultimate say over whether and where pokie parlours are established and maintained in their district, and how many machines there should be in their district, if any. The Green Party contends that it is simply not good enough to allow local councils, and through them, local people, only some say over how many pokies there are in their neighbourhood and where they are placed. The bill makes progress in terms of requiring territorial local authorities to adopt a policy on gaming venues, like casinos and pokie parlours, but they will have control only over the approximately 5,000 machines whose venues were licensed after October 2001. The up to 20,000 machines at venues licensed before that date will not be subject to councils’ new gambling venue policies. We are calling on a Labour Government, which supposedly supports principles of greater local control over local issues, to consider revising its ambivalent position by the time this bill comes back to the House for its Committee stage.

The second area where we are calling for a change of heart from Government is in relation to the distribution system for the proceeds of non-casino gaming machines. A report just out from the Lotteries Commission shows that Lotto sales are continuing to fall as a result of pressure from other forms of gambling. The drop in profits means that the payout to the worthy organisations that the Lotteries Commission supports will also continue to fall. The commission’s statement of corporate intent, tabled in Parliament just last week, estimates that its net profit for 2002-03 will be around $106 million. Last year the profit was $113 million. Only $103 million will be handed out to community groups this year. That is a big drop from the $140 million that the commission was able to make available to a myriad of worthy groups in 1999.

Over the last two decades Governments have put higher and higher expectations on the community sector to carry out functions formerly provided by the State. Contracts are rarely enough to fully fund activities, and hard-pressed organisations often rely on Lotteries Commission funding to help with even the requirements of bare survival. Meanwhile, the pub charities that distribute the proceeds of non-casino gaming machines around the country are now doling out around $200 million a year, and that amount is rising.

A major research project carried out earlier this year, looking at where the funds from commercial pokie bars are distributed, showed that very few of these profits are reaching the community organisations working in communities whose needs are greatest. The study reported that sports groups, predominantly traditional male sports, got over 50 percent of the funding, while all other types of organisations, including arts and culture, and all the different kinds of community activities, got the rest between them. We would like to see all, or even part, of this $200 million-plus a year taken out of private hands and allocated by a mix of national, regional, and local distribution committees. We are not advocating, as some have claimed, some kind of totally centralised bureaucratic distribution system. Rather, we would like to see equity between national and local allocation, and fairness between types of activities funded. The Green Party is not against sports and recreation, either. What we do seek is equity between these different types of activities.

We want a process that is fully and publicly accountable, where applicants have a fair chance of being considered, and where the choice of who gets funded is not dependent on the arbitrary whims of the administrators of pub charities, who obviously will always give preference to the type of organisation with which they feel a natural empathy, and all too often to those who come to drink in their bar.

I make a last heartfelt plea to Labour MPs to consider changing their minds on this bill. Labour still prides itself, at least sometimes, on its support for low-income workers, beneficiaries, their families, and the organisations that serve them. I just cannot fathom how Labour’s social justice principles can be lined up with its continuing heartless backing of the privatised distribution system of this enormous amount of money, and its failure to give local government the power to control pokie numbers and venues in their own districts. I hope that Labour MPs will look at this bill again before it comes back to the House, and consider amending it so that it goes beyond being a half-hearted attempt at responsibility.

I rise to support the bill. I want to pick up from where my colleague Damien O’Connor left off, and that is to correct some of the gross misinformation that has been put around by National Party colleagues and also by a colleague from New Zealand First. If he read clause 92—it is not in big print, but it is there—he would know that his assertions about centralised funding are not true. National Party members have gone around the country, as have other members, scaring the living daylights out of good community and sporting groups, saying that they will lose their money for the football boots, the football jerseys, and all the resources that those community and sporting groups rely on. That simply is not true.

I am pleased that National Party members do that. They did the same with the charities’ proposals, and when that was dealt with, all those groups that they ran around scaremongering and stirring up realised that they were telling porkies. We know that when this legislation is put through, again, those groups, like the Belfast Rugby Club in my electorate that I am privileged to be an honorary member of, will know that Mr Brownlee and his kind told porkies, again. They will know that.

I want to make this very simple point. For the benefit of Mr Catchpole, this is how the funding regime used to work in the old days. The applicant would apply through the pub. The pub would then pass on the application to the trust. The trust would then make the decision, and in many cases the cheque would go from the trust back to the pub—the pub not having made the decision—and then be handed back to the applicant. There was not a lot of accountability in respect of how much went back to the applicant, because many of us know the rorts that some publicans—not all—engaged in.

💬 Gerry Brownlee: Name one.

Given Mr Brownlee’s funding sources in the last election, he would probably know more about those sorts of things than I do. Under the new system the pub is cut out. The pub was never the decision maker at any time under the legislation. The trust was, and it remains so. Therefore, the Belfast Rugby Club would make an application directly to the trust. The trust, as it did before, makes the decision and sends the money straight back to the applicant. What we ask for is more accountability, transparency, and openness so that we know what applicants apply for, and that they get it. I was told of an example where a publican said to an applicant: “I know you want $5,000. Why don’t we just fill in the application for $10,000.”, and they got a backhander through the back door, or so I am told by some reputable sporting clubs.

We are saying that local nepotism has gone but, to answer the charges of the Opposition, the decision maker under the old legislation—the trust—will be the same decision maker today under the new legislation. With all the scaremongering of Mr Brownlee, and all the bluff and bluster to try to scare the heck out of sporting and community groups, their bluff has been called.

I look forward to this legislation being passed. We will introduce things like electronic monitoring so that the so-called rorts cannot happen again. We will ask applicants to provide some evidence of how they spent the money, so that if they did apply for money for footy jerseys, we can see that it was spent on footy jerseys and not on political campaigns or on a few beers down at the local. Why are we going to clean up those rorts? I would have thought that every member on the opposite side would want that to happen, because it means that the more rorts that are cleaned up the more money that can be saved, and the more money that can be put back into the community and sporting groups that we as members of Parliament want to support and see enhanced.

There are other provisions in the bill, such as powers to check. I know that some members of the ACT party might object to this, but there is a power to check the honesty of people associated with the operation of gaming machines. I would have thought that Mr Catchpole and Mr Brownlee would support a provision like that. Why are they not supporting the bill? The bill has a provision to increase audit powers significantly. I would have thought that this House would support that provision. The bill provides for new offences and stronger penalties.

I conclude by saying that the erroneous assertion that has scared the living daylights out of many sporting and community groups, that somehow the Government will grab the money and it will all go to Wellington, is not true. If members read clause 92 concerning the structure of how and who will make the decision they will see that under the old legislation it was the trusts, and it is the trusts under the new legislation. The difference is that the nepotism, whereby the old publican used to become involved, has gone. That means no more rorts. That means more money for community groups. I would have thought that anybody in this House with some community spirit would support that. I support the bill.

That was an address from a sore loser. I make it very clear to this House, and to anyone who wants to listen, that if it had not been for the campaign of Opposition parties, the Government would have proceeded with its proposal to centralise funding from pokie machines. We would have seen all sorts of Mickey Mouse projects, dreamt up by Labour members of Parliament, receiving a flow of funds that should rightfully be returned to the community.

The previous speaker talked about the rorts he knew of. When he was challenged he said that he sort of heard from someone that there might be, there could have been, and maybe there were rorts. Would members not think that if he knew of rorts he would have used the privilege he has in Parliament to name the offenders, so that everybody would know just how big that problem has been? The fact is that it has not been a problem. There are ratbags in any industry, and this legislation will not stop them. Clever people will get around the electronic monitoring, with a bit of clever computer higgery-jiggery. They will rort the machines, and that is a fact. Unfortunately, Mr Cosgrove says that that is the prime reason for putting this huge bureaucratic impost on an industry that is just about returning funding to the community.

I want to take up the issues raised by Sue Bradford. One would swear that there was never a problem gambler in this country until we had pokie machines. That is wrong. I remember the days when this country used to close down at 10 o’clock at night. It is not that long ago. I am sure that Madam Deputy Speaker remembers those days, as well. Just about every weekend a couple of rugby clubs in my local district, or other sports clubs, league clubs, cricket clubs, swimming clubs, or whatever, ran illegal casino nights. They were huge. People would go along, slap down the cash, the dice would be rolled or the wheel would be spun, and there would be winners and losers. It was quite illegal, but it happened. People lost money, and there were problem gamblers in those places.

Card schools in New Zealand used to be big deals. Traditionally, pay day was Thursday, and on Thursday night anywhere in this country one could find numerous card schools where people bet their pay packets. Some years ago I even saw a dart game played for the weekly pay packet. To suggest that somehow all that was OK, because there were no pokie machines, that it was all simply just a bit of fun in the past, but now we have this huge increase in problem gambling simply because of pokie machines, is a nonsense. I do not want to hear Mr Cosgrove saying that it is the housewives in my district—because that is what he says about the housewives in his district—who spend the housekeeping money on the pokie machines.

I say to Mr Cosgrove that years ago—and not too many, I say again—housie used to be played in the cities and towns throughout this country, and thousands of dollars were invested, supposedly, by those who played it. I can remember people sitting at our rugby club’s housie games, with five or six cards in front of them. They would pay $3 a time, and it was all over in 5 minutes. They stuck their hands up, and would turn up with another $20 worth of cards.

I say to Mr Cosgrove that that is all gone—and it has gone because of pokie machines; I accept that. But he should not come into this House trying to mount a case for there being more problem gamblers in this country now, because of pokie machines. The reality is that we now have more people dependent for their livelihood on finding problem gamblers. I do not in any way suggest that if a family is affected by a problem gambler, their case should not be treated with some sympathy. It can be a terrible addiction. There is no question about that. But people should be careful about where the blame for that lies.

I make a prediction. I see in this bill that the annual amount that is taken by pokie machines and made available to problem gambling organisations goes from $5 million to $20 million—a fourfold increase. I will bet my bottom dollar that in a couple of years’ time, with this $20 million taken off the sports fields and out of the cultural clubs of this country, we will be able to say that problem gambling has gone up fourfold, because there will be a whole raft of people out there depending on that statistic being presented.

I am very concerned about the statements Mr Cosgrove made regarding the way in which the distribution of these funds has been handled in the past. I go down to sports grounds every Saturday, and I see so many coaches out there, giving of their time freely to allow the children in this country to have a good experience in a sports team, or perhaps even in an individual sport. I am staggered at the number of times those sports coaches tell us that they are able to do so only because of the grants they get from the distribution from pokie machines. What Mr Cosgrove is saying is that, somehow, something has been wrong with the system that has allowed all this to happen.

💬 Clayton Cosgrove: Not with all those people—with the publicans.

He is saying that because the local publican got to sign off a form, or perhaps just hand it on, somehow that fellow is a bad guy.

💬 Clayton Cosgrove: Some are.

I want to tell Mr Cosgrove that that is simply not the case. The hotels and other places where gambling machines are placed throughout this country, particularly in rural areas, end up being the anchor point in the community. That is where people go, that is where they gather, and that is, largely, where they get their community spirit from. For Mr Cosgrove to say that everything is simply going to come right with gambling in this country because we have changed the way in which the distribution is done, is a nonsense.

This bill is a bureaucratic disgrace. No one objects to electronic monitoring—that is simple. But I say to Mr Cosgrove that I can tell members the story of two ex-policemen who are employed by the Department of Internal Affairs as inspectors for these machines. They turned up at a local community down in Southland, went to see the publican, had a bit of a chat to him, and then said: “Unfortunately we’re not going to get our flight back to Auckland unless we get to Invercargill by a particular time. So can we just say we’ve been here, we’re satisfied with your operation, and we have to go?”.

This country does not need that sort of expense being imposed upon it. I want to know what community organisation missed out on funding because the Department of Internal Affairs employed two ex-detectives to drive about the countryside enjoying themselves, and ride in a plane from Auckland to Invercargill, and from Invercargill back to Auckland, just so that the Minister would be able to say that a good audit process is in place. It is a load of rubbish. Certainly, there should be electronic monitoring—that is easy—but members should not believe that there will not be those who try to get around it, because there will.

I ask another question. If this bill is so important and this has been such a cornerstone issue for the Greens, United Future, and Labour, why have they allowed it to linger so long at a select committee, and why have they allowed the numbers of pokie machines to rise from some 16,000 to over 27,000? That has been the effect of all the hysteria and paranoia exhibited by the Government and by Government supporters. This bill will not do anything to reduce problem gambling in this country. It will not do anything to stop people taking money they cannot afford and investing it—and I use that word somewhat ironically—in pokie machines. This bill will, unfortunately, make a significant difference to the local communities. They will miss out on the funding that will now go into the bureaucracy of administering the requirements of this bill, and those requirements will not make a blind bit of difference to the way the industry operates.

I speak as the chairperson of the Government Administration Committee, the select committee that looked at this bill. I am really sad that the previous speaker has not read the submissions, as there were over 250 of them.

💬 Gerry Brownlee: And the member has!

I am glad the member is laughing. There is a huge variety of opinion. I am sure that member has listened to one or two people in his electorate, but he has not had a considered review of the legislation.

I will answer the member’s question about this legislation being a long time coming. An inquiry was held many years ago, which Peter Dunne was in charge of. We had 9 years of a National Government, during which time I sat on a committee that had one or two bits of legislation that, as Mr Tisch will remember, never even came back to the House. Then we had a very good Minister, George Hawkins, appointed and an inquiry was held relatively quickly. Next we had a comprehensive bill—and the Speaker will note that it is at least an inch thick. It deals with everything from racing, to housie, to pokie machines, to lotteries.

The legislation that came before the select committee was very comprehensive. We heard the submissions. We received many reasoned submissions, ranging from people who agree with Mr Brownlee to those who have very strong religious convictions and very strong social opinions about what should happen, not only in relation to gambling but also in terms of the distribution of profits. I say to Mr Brownlee that I think it would help if he were to read some of those submissions, or even read the report of the select committee, before sounding off too loudly in this House.

💬 Gerry Brownlee: I’ve done that. Don’t be so offensive.

Well, it was not evident from the member’s speech. That was all I could go on, as the member did not refer to the report.

There are a number of really controversial issues, including those relating to the moratorium and casinos. The most controversial issue, as we have heard from the speeches so far, related to pokie machines, which have proliferated in this country tremendously. Today I looked at a graph showing that the numbers have increased dramatically in New Zealand. That has been of concern to very many people. Lotto money is going down and there is an increase in gambling on pokie machines, and that is of concern to those people, and even to people who are receiving profits from those machines.

The bill is about the number of pokie machines, the control of pokie machines, the advertising of pokie machines, and the types of pokie machines—whether they take notes or coins. It is also about electronic monitoring so that we can tell where those machines are and what is going through them. If Mr Brownlee thinks there has been no problem in the past, then he has been living in another world. Mr Tisch has done a good deal of research for the National Party, which I am sure we will hear about when he speaks. He understands many of the problems and was supportive throughout the bill on a number of issues. The major issue that Mr Brownlee talks about is the distribution of the money from pokie machines. Many, many submissions were received on that issue.

Sitting suspended from 6 p.m. to 7.30 p.m.

The select committee recommended that we change the title of this bill to the “Gambling Bill”, largely because it covers a wide range of gambling—everything from housie through to casinos. One or two people felt that not all gambling was responsible and thought it would perhaps be better if we called the bill the “Gambling Bill”, to be sure.

The bill is large and very comprehensive, being at least 1 inch thick. As I said before the break for dinner, it contains issues about the problem gambling levy that has been chosen. It abolishes the Casino Control Authority and sets up a Gambling Commission that has a degree of independence. However, as many speakers have said so far, the biggest issue is about the distribution of the profits from the pokie trusts. A number of issues around that were looked at. There were submissions that said the distribution from the trust should be done by the Lottery Board. Other submissions said it should be done by local government and territorial authorities, while others said the Community Organisations Grants Scheme should do it. It does seem that nobody trusted any organisation absolutely to do the distribution.

However, in staying with the trusts the committee did recommend two major themes: that the trusts should be corporate societies and should be transparent in their structure; and that there be greater transparency around the distribution. That goes even from the filling in of the application forms, because, as Mr Brownlee has said, the situation now is that people will go along to a publican and get a form to fill out. That form does not necessarily need to go any further; we heard rumours about the fact that some of those forms ended up in rubbish bins—they did not get sent to the trusts people were applying to. It was also felt that some organisations would not want to go into a pub. There are some women’s organisations, under-age girls marching teams, and so on, that would not, or could not, go into a pub to pick up the application forms. So the committee suggested that the application forms should be available generally, as with community trusts.

The committee also recommended that when there is a requirement for the distribution to be published, the trust should publish not only who gets it but also who does not. It would then be much more transparent as to what was happening to the money and to whom it was going, so that if people missed out in any year they would be able to see whether they would be eligible the next year. There would also be community pressure on the trust, because despite what Mr Brownlee said previously, the select committee heard plenty of evidence that showed that rugby tended to get a higher proportion of the trust funding, and that sports engaged in largely by men were more likely to get funding than sports engaged in by women. We heard that in the distribution process, sports were likely to get more money than the arts, education, or social organisations, such as women’s refuges, and so on. Somebody said: “If you’re a Somali soccer team and you don’t drink, you’re not likely to get a great deal of funding out of the present system.” So we have built greater transparency into the bill. Although we have stayed with the distribution process, and we know that the division of the money remains the same—one-third going to Government, one-third getting distributed, and the other third being used for administration—we have built greater transparency into the bill.

The other thing is that local government was very concerned about where pokie machines and gambling venues would be. Clause 91 requires local government to have a plan about where the machines will go and where the venues will be. We have also built into clause 91 the type of consultation there has to be around that plan, and stated that there has to be public consultation. Some of the information that has been given already in this debate has been misinformation. Various sports clubs, and so on, will not miss out on money. The proportion of the money to be distributed remains the same. As I said, a third will go to Government, a third will get distributed, and a third will be used for administration. What we will perhaps see is a wider range of distribution. Some of the organisations that were not getting funding before will now be eligible for funding, and that funding will be more transparent.

I thank those who were involved in the committee. The people who were involved when the bill was reported back to the House were Pansy Wong, Steve Chadwick, Russell Fairbrother, and Sandra Goudie. I also thank people from the previous committee, which included Grant Gillon, Arthur Anae, Tim Barnett, Luamanuvao Winnie Laban, the Hon John Luxton, Tony Steele, and Lindsay Tisch for the very good job they did. I am looking at Mr Tisch at the moment, and I thank him, because he did do a good deal of research. He bothered to go out of his way to find out exactly what was happening and who was involved, which is more than Gerry Brownlee did. I know that Mr Tisch will have read the report, and I know he read the submissions.

Here we are, 3 years later, and we have a bit of a Bible here. The bill has 333 pages, containing 333 clauses and six schedules, making it great bedtime reading.

💬 Dianne Yates: Nine long years, and you didn’t do anything.

I did sit in the Government Administration Committee and hear all the submissions; I was a party to that. But for all the good intentions that came forward, National will not be supporting this bill. Everybody likes to have a flutter, and I certainly like to have a flutter, but this bill does not go anywhere.

The bill is a contradiction, in the sense that on the one hand it wants to limit gambling, yet on the other hand it states to some organisations, like the racing industry, that they can have pokie machines, and that the TAB can have pokie machines. It also states that in situations where there are some clubs that could join together for the sake of their long-term viability, with the Minister’s discretion the number of machines could go out to 30. I am not opposed to the racing industry having its own pokie machines; I support that. I am not opposed to the TAB having machines. I took very close notice of what the Hon Damien O’Connor said when he talked about the racing industry, because he said that he wanted to do what is best for the racing industry. But there is a view out there that because racing clubs will be able to have pokie machines, they will not be able to source funds and money from other charities or groups that have machines. That is a major concern, because not every racing club will go and put its own machines in. A club may meet only once a year, so the economics of going out there and putting a machine in would be a nonsense.

I will turn to harness racing, because I want to quote from what the Minister said at Alexander Park on 18 July. If the situation should change, his words will come back to haunt him. This is what the Minister said: “There are no certainties over the final content of the gambling bill until it has passed through all stages.” That is fine. He went on to say: “There are still ongoing discussions on a number of issues, but I am optimistic that racing will get a fair deal.” The only deal that the racing industry is interested in, in terms of pokie machines, is one whereby it is able to retain the money from pokie machines for racing stakes, and the industry is not limited in any way in going out and sourcing money.

💬 Hon George Hawkins: Go and be happy.

The Minister should go back and watch some of those television programmes. It is important that racing clubs are able to source funds from other traditional areas.

I have no problem in terms of the issues where there have been some discrepancies—and the discrepancies came through loudly and clearly. I applaud the measures where the Department of Internal Affairs has come in and looked to put in place some accountability, transparency, and monitoring measures. It was interesting to read the article in the Dominion Post on 31 July entitled “Clubs lose licences in pokies crackdown”. I have no difficulty with that, if there are abuses of the system; that is the point that needs to be made. The Department of Internal Affairs needs to have the resources to go out there and monitor those things. We do not need to have an Act of Parliament to change the present legislation in order to do that policing. We should give the Department of Internal Affairs the resources it needs to make the policing of the law work. I have here an article from Gambit in July that states: “Action taken against 34 gaming machine societies and sites, plus 236 formal warnings.” That is great. If organisations, societies, and trusts are breaking the law, they need to be held to account. I have no difficulty with that, and National has no difficulty with that.

What we object to is that this legislation, which is supposedly to control gambling, at the end of the day will not work. Our position is very clear, indeed. We want transparency and some accountability, but we think that this bill is a complete overreaction. We have seen such overreactions over the last 3 years. There is a premise that when one legislates one will fix problems, but it does not work like that, because one cannot legislate for human behaviour. It does not matter what sort of conditions one puts in place, one cannot legislate for human behaviour.

I want to bring forward some of the issues that we will debate at length during the Committee stage, because they are very, very important. The first one relates to bank note acceptors. The bill states that note acceptors will be removed. The Minister, in his speech at the beginning of the second reading debate, said that the Government will allow note acceptors, to a maximum of $20. There is no international experience that shows that doing away with note acceptors will limit the amount of gaming that exists. Plenty of research shows that that does not work. It will not reduce gambling, at all. Customers will simply change their notes for coins. There is no research or experience overseas that supports the idea that removing note acceptors will limit gambling. In addition, there are e-bet cards that I would be able to use in a machine. Instead of putting a note in, I could put my e-bet card in. In fact, there are a few dollars left on it—

💬 Hon Dr Michael Cullen: What’s the number?

It is a good number, too. It might actually win—I am a betting man. So we still have the opportunity to do that.

This bill does not stop Internet gambling. There are already over 1,000 sites. I could sit in my lounge at home and log on to any gambling site on the Internet. This bill does not acknowledge that. It does absolutely nothing in terms of limiting that or trying to police it, because it cannot be done. In fact, in the United Kingdom the authorities tried to put controls on Internet gambling, and found that after 12 months of those controls being in place they had to reverse their decisions. There is currently a new system operating in the United Kingdom. It is run by an organisation called Betfair UK. The same system is available here in New Zealand. It is known as “exchange betting”. It works by someone putting up $100, and the commission on that bet is 1 percent only, which is a pretty good deal. However, the experience overseas is that problem gamblers, or people who have some information from insider trading, are able to take up the bet. Already, £75 million per week goes through that betting system.

I want to highlight one area of concern, which I have tabled Supplementary Order Paper 64 on. That is the formula for problem gambling. It has been mentioned in previous debates that the problem gambling levy rose from $5.8 million to $9.8 in October last year, has risen to $12 million this year, and will rise to $20 million within a couple of years. There is absolutely no justification for having an increase in the problem gambling levy of that magnitude. What happens now is that the providers and the people within the industry sit down around the table, say how much they need, and agree to share the money out and to make things work. That system has worked extremely well.

But under this bill the Ministry of Health will have ownership of that levy. The Ministry of Health has not progressed the issue of problem gambling in any way, and that is one of the major concerns. I tabled Supplementary Order Paper 64 some time ago, and it looks at how we can refine the formula and have the flexibility in it that will allow a better distribution of, and better accountability for, the problem gambling levy. It is very important that we ring-fence the levy and make sure that the money that is going into the problem gambling area is used for that purpose, and is not abused open-endedly, which, I am sure, this bill will allow for.

I do have another concern, which relates to the setting up of the Gambling Commission. One area it does not include is the racing industry. The commission therefore has major shortcomings.