Financial Review Debate

Before the House rose last night, I had the opportunity to talk about growth and investment in the economy and about the huge compliance costs that businesses are facing. Today I want to concentrate on a very important part of the economy in the Piako electorate, which I represent, and that is the racing industry. The House has recently passed the Racing Bill, which National supported. [Interruption] I tell Dr Cullen that we were happy to support the Racing Bill, because it dealt with an important process in terms of governance. However, the legislation does not improve the lot of racing. It does not put any more money back into the industry.

One of the disquiets the racing industry has today is the huge cost of both compliance and accident compensation. We note on page 70 of the financial statements that the Accident Compensation Corporation has made a profit of $243 million, but in the year 2001-02 the levies on the racing industry increased from $3.61 to $5.48 per $100 of earnings. That was a 52 percent increase for that period. Today the new rate being mooted for 2003-04 is $7. The accounts show the Accident Compensation Corporation making very good profits, yet at the same time the racing industry is struggling for its viability and being penalised—especially the trainers—by having to pay huge accident compensation levies.

The information I have received through parliamentary questions shows some discrepancies. When I have spoken about this in the past, different versions have come from the corporation. A letter dated 6 March states: “What is not evident from the data for the 2002-03 year is that the risk group has been restructured to include sports and services to sports, which is now a riding classification.” That change was one of the factors that contributed to the levy increase between 2001-02 and 2002-03. In answers to questions I have asked in relation to the huge increase in levies on the racing industry, I have been told that the costs have gone up because of increasing accidents. In fact, that is not right. The letter I have from the corporation confirms the reasons for the costs going up. Perhaps at a later stage the Minister will be able to answer these questions.

We are now seeing that groups involved in pony clubs, equestrian events, and cross-country riding are being included in the horse racing industry. As a result, there is a huge increase in the levy in terms of the restructuring of the reclassification—now up to $7.03 per $100 of earnings. This is not right. It should not be happening. The point I make is that it is not fair that industries that are playing their part by paying their taxes and contributing to the overall growth of their communities, are being very heavily hit.

An example I would like to bring to the attention of the House is that of trainers in Matamata. They are training 32 horses. They get paid $37 a day in training fees, and on top of that they get 10 percent of the winnings—if the horse wins. Their accident compensation levy for this coming year will be $15,000. The particular operation I refer to employs seven people, but only three of them do track work. The other four muck out—cleaning out the stables—and doing the administration. Yet the fee being struck is the same across the board for those seven employees. In my view, that is not acceptable. Here we have an industry that is so important, but it is being penalised because of the restructuring that now includes the much bigger group.

If we were to look at what the 7 percent levy means, we would find that somebody who is employed full time—2,080 hours a year, multiplied by 7 percent, which is equivalent to about 146 hours—will be off work for 18 days per year, because of accidents. In reality, the racing industry is being penalised. It is being restructured to include other groups outside the realm of the horse racing industry. National is concerned about that. We have articulated our concerns in previous debates. The situation has become worse, not better, because we now have a rate that is going from $5.48 to $7.03. Who is paying it?

This Government should be held accountable for these unacceptable increases.