Racing Industry Bill

I move, That the Racing Industry Bill be now read a second time.

Racing has a long and proud history in New Zealand, and this bill closes the circle started by Sir Thaddeus McCarthy with his royal commission report in December 1970—this is the report here. As an industry, racing is seriously important to our communities and regions, and past studies say it contributes $1.6 billion to the economy each year. There are 14,000 full-time racing industry jobs and nearly 58,000 jobs which participate in the industry in some shape—from bets to equipment suppliers. There are 15,000 owners, 800 trainers, and 200 jockeys. Not only is New Zealand bloodstock world class, it’s a significant export earner. The world-class quality of this industry has no better example recently than the Cambridge Stud horse Hello Youmzain, winning the Diamond Jubilee Stakes at the Royal Ascot this week. That was a genuine world-class result.

Yet it’s been well-documented our racing industry has been underperforming over recent years. Addressing and reversing this decline has been my focus as Minister for Racing, given weight with racing policy being part of the coalition agreement. The Government’s first step was to commission the Australian expert John Messara to conduct an industry-wide review. We then formed a ministerial advisory committee, which pulled together our own domestic experts to examine next steps. These measures led to the precursor Racing Reform Bill which passed through this House last year, creating the first meaningful change this industry has seen in a long, long time.

Significantly, the New Zealand Racing Board was replaced with the Racing Industry Transition Agency (RITA) to start a reform programme. Officials also worked on developing further the Messara recommendations. And now we have before us the Racing Industry Bill, the substantive legislative response to the Messara report. This bill revokes the Racing Act of 2003, and it provides a new governance structure for the racing industry. It creates TAB New Zealand as the sole betting provider for racing and sport and empowers the three racing codes to take responsibility for the future growth of their respective industries. The bill also establishes the Racing Integrity Board as an entity independent from the racing codes, which is responsible for all integrity functions for the industry.

When introduced, we said we would listen to sound submissions. In order to address historical property issues that have contributed to the industry’s decline, the bill introduces provisions to ensure that surplus racing property is vested back into the industry to enable its future growth, but the provisions related to racetracks have been carefully considered and are well balanced. They ensure there’s good progress and process and protection for community interests. The Transport and Infrastructure Committee received written submissions from 922 submitters. That was supplemented by many oral submissions; the vast majority expressed general support for this bill. The committee has unanimously reported the bill back to the House with proposed amendments, and I thank them. The Government has accepted these amendments. We always believed that if we listened to the submitters we could have an improved legislative product. The interest and productive contribution submitted to the members of the select committee are welcomed, and my parliamentary colleagues should be thanked for their consideration of these matters.

This Minister has been vigilant with following the progress of this bill, both listening carefully to industry and also receiving a consistent stream of advice from officials. The Government’s objective has always been to achieve racing legislation responding to the intent of the Messara review and to respond to the feedback of the industry, and this Government has delivered that with a bill which reflects the Government’s sense of direction. The Government believes the racing codes need the tools to better manage their own destiny rather than be bound by legislative impediments. The Government also welcomes the provisions for Racing New Zealand within the bill to be a collaborative entity of the codes. The Government also supports reduced ministerial involvement in the industry, as many in the industry have called for. The overarching intent of the bill is to be able to create the opportunity for the clubs, codes, and TAB to foster their own future.

It’s important to advise the House that since the select committee reported back, further amendments have become necessary as a result of COVID-19. The required changes will be addressed by the Government through a Supplementary Order Paper at the committee of the whole House stage. The Supplementary Order Paper will amend the bill as reported back to allow the current RITA board to remain as the inaugural TAB NZ board until such times as new appointments can be made under the new legislation. This recognises the delays to the passing of the bill caused by COVID-19 would have meant that appointing a new board would occur in the pre-election period. I’ll leave the decisions on the substantive appointment to the TAB NZ until after the next election. The Supplementary Order Paper will also temporarily extend the Minister of Racing’s transitional powers currently provided for in the Racing Act to allow the Minister to give direction to TAB NZ for the immediate post-COVID recovery period.

As you will be aware, the Government has delivered a significant rescue package for racing in the wake of COVID-19. This investment has created a similar period of industry adjustment in which a closer degree of Government involvement is appropriate given the scale of taxpayers’ investment. While the use of these powers may not be required, their retention allows the Minister to assist the TAB NZ board by providing clear directions through what may be a challenging time. This provision is temporary and time-locked to the COVID response. The Supplementary Order Paper also makes minor technical changes to the bill that have come to light since the select committee process. These are all within the intent of the bill and the changes made by the select committee.

In conclusion, let me commend this bill to the House. It amends urgently required reforms, it gives industry the tools it needs to revitalise itself, and it’s a catalyst for a better future for the racing industry. In short, it closes the circle after 50 long years since December 1970. Many of these reforms in the Thaddeus McCarthy report are in the Messara report, and they are in this bill. We cannot afford to waste another 50 years to try and fix this industry up. We need to fix it up right now, this week. To accept the status quo and to do nothing would only lead to a notable decline. This bill will turn the industry around and get racing back on track.

I’m pleased to note that the industry is already responding and good work is under way to achieve these goals. And by the way, we got a marvellous letter today from all the codes that shows that collaboration and cooperation has broken out across the whole industry, and a letter was written to me today, dated 23 June, 2020, which I’m happy to make available to the media of this country. Accordingly, and early, I commend this bill to the House.

Thank you, Madam Speaker. I agree with the Minister for Racing: we need to fix this right now, this week, and I’m pretty sure we’ll get some way down the path of fixing it right now, this week. But, before we do, I want to go back a little in history—and, unfortunately, I, like the Minister, was around in 1969 and very well remember the report that pretty much resembled the report that was given to the Minister last year. That’s one of the tragedies of the racing industry, and I think we do need to go back a bit in history just to get a view of where we’re at today and where this bill is, hopefully, going to take us to in the future.

If you look at the previous Racing Act, it was somewhat restrictive on the Minister’s ability, whoever the Minister was, to do much to assist the racing industry, frankly. It had to be done through other means—via tax or whatever. This bill, in my view, goes a long way to giving the industry back the prerogative to run themselves. I think it’s most important, as we get to that point, that the industry does this in a collegial manner, and I’ll outline a little more about that in due course. But one of the problems the industry’s had throughout its history, in fact, is that the three codes have been fragmented. In fact, the individual codes have been fractured within, and it has caused some problems in the industry. I don’t think you can blame the Parliament entirely for that, but certainly some of the legislation we’ve had in the past backing the industry’s position wasn’t necessarily constructive.

I want to talk for a minute about the select committee process, which I found surprisingly collegial. I’ve never sat on a select committee that remotely resembled that select committee. It was bipartisan. I want to congratulate Darroch Ball on his chairmanship of it. He didn’t interfere much, and he was extremely collegial, as I said a moment ago. I also want to congratulate Jan Logie, who did an awful lot of work in the background and assisted the Transport and Infrastructure Committee, quite significantly, I think, with some views that needed to come to the committee. They came to the committee in the form of submissions, but she also went out of her way to get to understand an industry that’s not that simple, and I think that was pretty significant.

The select committee listened to and took note of submissions, and then set about implementing many of the changes requested by the submitters. I might add that I think if a few more Ministers and select committees operated in this manner, we’d produce a whole lot better legislation in this House. On many occasions, I think we could do that much better than we have, and I think—as I said a minute ago—this select committee and the process we went through was hugely constructive and has come out with a bill that, in my short travels around the country in recent weeks, I think is appreciated by the industry. Hopefully, they’ll get on with the job of getting over their differences, basically, and making this thing work. I’ll just touch on that a little bit further on too.

I also want to compliment the officials, because, as anyone who sits on select committees—and I don’t want to be critical of officials for a minute—often finds, officials have a view on how things should work and they like to get their own way, to some extent. But I thought, in the process of this bill, they went out of their way to assist the committee to get to the point we wanted to get to, and that particularly applies with respect to clauses 19 to 26, which relate to the property issues, which were very challenging for, particularly, some of our smaller communities but also for our other communities.

I hope the passing of this bill will put the once great racing industry back on its feet and allow us to give the horse breeders of New Zealand an opportunity to invest with confidence and show just how good they are. They are some of the best in the world. We have some of the best conditions for breeding horses in the world, and it’s an opportunity for us to make the best of that, and I think it’s important. It’s one of those industries, of a few that stick out in New Zealand, where we’re clearly as good as anyone in the world and we can excel wherever we go in the world with those horses. And the Minister referred to one of those a minute ago. I think it’s very exciting opportunity for the industry, and I just hope that they’ve got enough, I guess, strength and horsepower left to make that work for them.

The industry came to the submission process with a large number of concerns about the way the bill was initially written. They were keen for it to follow the Messara report in a much closer manner than perhaps, when it was first presented to the Parliament, it did. I don’t want to be critical of the Minister at all, but they were quite keen to remove the Minister from some of the influence the Minister could have in the course of the legislation being implemented, and, actually, you can see why, because, as with anything, you can get Ministers appointed to these things that understand them and you can get Ministers appointed to these things that don’t understand them and that don’t want to. So I think the more an industry can remove itself from the processes of Parliament, the better off they are.

The first place that we had quite a discussion on was around the appointment of the TAB board and how that was to be processed going forward. I think it’s most important that the industry—all sectors of it, including the sporting sector—have a collective view of what they see the TAB board’s future being. If they do that, they will have the ability to nominate people, who the Minister will then appoint with confidence. If they don’t get their decision-making collective on this, they’re not going to give any Minister the confidence to go with the appointment processes as is intended by the bill. So it’s intended by the bill that, effectively, that appointment process will enable the collective bodies to get their heads together and appoint and nominate people who are appropriate to take the industry forward. If they don’t do that, then that’s going to be challenging for any Minister. That was the first issue we dealt with.

The second issue was one of intellectual property. The original bill, effectively, gave the intellectual property of the industry to the TAB. Now, the intellectual property of the industry is not necessarily owned by the codes or anyone else. The intellectual property of the industry is, effectively, owned by every sector of the industry, because the breeders have a portion of the intellectual property, the racing clubs have a portion of it, as do many other people—from the trainers to the jockeys to whatever. They all “own” the sector of that intellectual property. The challenging thing for the industry was, it was, effectively, under the bill, granted to the TAB. Now, if you looked at the larger racing clubs in New Zealand, for example, it could be that they may have wanted—if the TAB doesn’t survive—to contract themselves out individually. If they didn’t own their own intellectual property, they wouldn’t be able to do that. So that was resolved, and, actually, was resolved thanks, to a large extent, to the tenacity of my colleague Andrew Bayly, who understands intellectual property better than I certainly do and better than most people do. He had some very strong views on that. So I think that that was a good outcome, and I think it’s an outcome that the TAB now accepts and fully understands.

I’ll talk very briefly about Racing New Zealand. When the bill came to the Parliament, there was the ability for Racing New Zealand to form itself, effectively. Now, Racing New Zealand is a combination of the three codes. They had the ability to form themselves, but there was no direction under the bill for them to be formed. One of the concerns, I think, that certainly I had—and I’m sure that other members of the select committee had as well—was that the three codes have never been able to collectively form themselves into anything, historically. Interestingly, they came and submitted on a united front to the select committee, which I thought was unusual. In fact, it was certainly unusual by industry standards. They came and submitted collectively, and that gave us a false sense of security, because, knowing the history of them, I felt, and I think the select committee certainly felt, it was necessary to form Racing New Zealand in legislation, which, effectively, gave them the opportunity to put their body together. They then, collectively, will represent the codes, hopefully—that’s the idea of it: collectively represent the codes—in their negotiations with the TAB and with everyone else they deal with, including the Minister. I think that will work too. So that was another provision that we inserted into the bill.

I want to talk briefly about—because I’m running out of time—the sale of surplus racetracks. This was by far the most contentious issue that the committee had to deal with. It was the subject of probably 90 percent of all of the submissions, and particularly from those racing clubs that felt they were the subject of the bill’s design. We had a lot of discussion about this, and I think our aim was to give those communities the ability to protect their property—and I say their property, and I mean that—in one form or another. Small communities build up assets of all sorts to make their community work, and, in this case, it’s a racecourse that we’re talking about. It was necessary to ensure that those communities were protected going forward and that that asset was protected, either for that community or for the industry, whichever the clubs felt was the right way to do it. I’m sure this will be documented as we go further down the track, in a much better manner than I have. But it is a very important part of the bill. It’s a piece of the bill that we feel we’ve got right, and we think it will give a balance to all those racing clubs going forward.

Now, I’m clearly going to run of time, but I just think it’s a very good piece of legislation, and I think it will set the industry up for the future. I’m confident that it will, obviously, pass here. We certainly support it. Thank you, Madam Speaker.

I rise to speak in support of the Racing Industry Bill, but I do have a few things to say about the process by which we got here. In particular, I speak on it because it concerns an asset in my community—Avondale racing club—deeply; it concerns it deeply. You see, in the Messara report, the Avondale Racecourse was identified as one of those possibly surplus venues. It might be surplus to racing, but it is not surplus to the Avondale markets. It’s not surplus to the school sports teams that play there on a Saturday morning. When I was down there at the racecourse yesterday morning, talking about it with someone, there’s about 12 or 14 sport pitches there which are used in my community. It’s not surplus in terms of being a large green space in the midst of an urban area, which is used by all sorts of people for exercise, for fresh air, and just for being in the green. That racecourse matters deeply to my community, and as the bill was introduced, it was, to be honest, under threat. It was one that was clearly going to be designated as surplus and sold off—to no benefit to my community.

But the select committee process worked. The select committee process worked to ensure that this extensive community asset built on land that was gifted not to a racing code but gifted to the Avondale Jockey Club cannot just be disposed of just like that. Instead, in terms of the select committee process, the bill now has within it what I think is a really good basis for the racing industry, the racing codes, the racing clubs, and the communities that surround them to move forward. The bill introduces a process of review in which a racing code and a racing club must try to negotiate. If that fails, a reviewer is appointed who is acceptable to both the racing code and the racing club, and that reviewer must undertake a process looking at what is intended to happen with the surplus venue, to what other purpose it could be used, to what extent there are other not-for-profit purposes tied up with the racing venue, the legal or beneficial interests of iwi, whether it’s used as a trading venue, what the value of the land and buildings is, and whether it’s used by clubs that don’t actually have an ownership interest in the venue. The proposal is put forward by the wider community as to what use there should be for that venue.

If I was to characterise this—taking it away from specific provisions—what this is, in this revised bill, is a very, very clear directive to the racing codes and the racing clubs and the communities which surround them, to get together, to talk, to negotiate, to really understand each other’s positions, and to make sure that the outcome of any process is a fair one that respects all the interests.

So that’s what I say to my community, to the members of the Avondale Jockey Club, and to the racing codes. Let’s talk—let’s talk; that’s what this bill tells us to do—and reach an outcome that works for everyone, including the racing industry, which really does need to be set on a more secure basis as we go forward. Because there is this strong process of negotiation and talking introduced by the Transport and Infrastructure Committee, and one which, I know, the sponsors of this bill are happy to work forward with, I support this bill.

Thank you, Madam Speaker. It’s a pleasure to be talking on the Racing Industry Bill. I think, as we all know, the bill was originally introduced by the Minister for Racing back in December 2019, and followed a very well-considered report prepared by John Messara, who has played an instrumental role in reforming the Australian racing industry. He came to New Zealand and spent some time looking at the New Zealand industry, which, unfortunately, over time has been going backwards. His wide-ranging report focused on a whole range of issues, from governance issues right through to the ownership of tracks; also just how things are done here in New Zealand, particularly the betting arrangements.

It’s clear that the industry needs to be able to reorganise, regroup, to be able to move forward. And of course, as most of the former speakers have mentioned, the New Zealand racing industry is a wonderful industry and employs a lot of people, 50,000 people. It’s a big money earner, from exports, and it brings a lot of profile to New Zealand and also, as I said, export dollars.

But the reality is that simply for people who want to own and race a horse in New Zealand, it is almost at a point where you—in virtually most cases—you lose money on that venture, unless you are lucky enough to perhaps win a group 1 race, and that will recover your cost. But very few horses are in that situation. So we have an industry that’s in trouble.

So it was interesting, after the bill had been introduced in December, walking around Karaka saleyards in February. I could not believe the reaction that I received from many owners and many breeders who were attending those sales, because what the industry was saying to me, and to many others, was quite simply: if you read the Messara report and then you looked at the bill that had been introduced late last year, it was diametrically different—it was almost as if the people who had prepared the bill had not read the original Messara report—and there was a plea for help. So out of that process, the select committee has gone to work to make substantial changes to this bill, and most of it’s been canvassed before.

I do want to acknowledge some members of the Transport and Infrastructure Committee, not only my colleague Ian McKelvie, particularly, and Tim van de Molen, but also the members from the Government. We worked proactively and consistently—basically over the last six, seven months—to get the bill into a shape which really reflects the Messara recommendations.

The key parts, I think, can sort of be distilled down. We have three elements in the racing industry: we have the TAB at one end of it, which is around betting; at the other end we have the three codes—thoroughbred racing, trotting, and greyhounds—and in between there is sort of a loose grouping that was provided for in the original bill, but not specifically catered for. And so the efforts of the committee are really focused on all of those three areas.

The first one was around the TAB, which is about undertaking betting, and the first change that was made was this question of the intellectual property that my colleague Ian McKelvie spoke of. This is the IP, the intellectual property owned by all of the industry, and for some reason that had been put into the control of an operating entity called TAB. In the event that the TAB went bust, or ceased to operate, or whatever, that IP would be permanently locked in that vehicle and whoever actually picked up that vehicle, should it go into receivership. It’s 101 in any business structure never to put IP into an operating entity. So that was the first change that was made and it also reflects that the IP is owned by “the” industry and I say in all its component parts.

The second thing was around the governance of the TAB and this is a crucial bit. This is the bit that drives the money into the racing industry. It drives what the racing stakes are and therefore drives the profitability of actually owning a horse and actually underpins the breeding of horses in New Zealand, which is a fantastic industry here. The key thing—and there’s been a lot of concerns about the governance of the TAB, and so what we brought into play with the TAB are two things. One is how the board is constructed to operate that TAB going forward. And basically, what the rules are now are there: one, a representative from the three codes—racing, trotting, and greyhound—and they have an absolute right to have an appointee on the TAB, although the people that they nominate must have adequate and sufficient skills to be able to be on that board. And then there are four other appointments, possibly, quite likely, one from sporting organisations and then some independent board members. So basically, it is to make a board that has the necessary skills but also reflects the interests of all the underlying ownership of the TAB, which is really the three codes.

The other thing we’ve put in place was an accountability from the TAB back to the codes and I’ll talk more about that in a second. But that was a crucial bit because what we didn’t want to set up was a commercial organisation with a commercial board without adequate framework in place to make sure that they really were driving and looking after the industry that, essentially, owns them from behind. So what we then did is that in the middle—the original bill had provided for a possibility of an independent organisation being set up to represent the three codes. In John Messara’s report it actually specified that this should be set up so there was a collegial approach and professional approach.

So we changed the bill from it being one that could be catered for in the future to specifically set up that body called Racing New Zealand and gave it a specific purpose, which includes not only setting race meetings and the rules around that, also around judiciary roles in terms of racing—a whole raft of sort of different roles. But one of the most crucial roles was for Racing New Zealand to make sure it held TAB accountable. So there was a process around agreeing a statement of corporate intent or the objectives of the TAB and also a business plan. So we’ve got interlocking accountabilities between the TAB and this Racing New Zealand representing the three codes. And that’s a crucial part to making sure you’ve got adequate tension between shareholders and operators.

The last thing was around the codes themselves and they are now enshrined and have their own operation, but also have the right to have appointees on Racing New Zealand. And I think that will provide a sort of a good framework—a corporate, commercial intention—to make sure that the TAB operates in the best interests of the racing industry, but at the same time allowing it to get on with its own operations.

The last thing is around the sale of racing tracks. I think the big strategic issue for the committee was there are some tracks that should be sold in New Zealand and there are some tracks that shouldn’t be sold in New Zealand. And somehow we had to devise a process to reflect that. And so of the most paramount importance for, particularly, smaller provincial clubs was to see the loss of those clubs and the loss of those racing facilities. And one of the crucial things is once you lose racing clubs or racecourses where training takes place, as soon as that training disappears, the industry folds and disappears around it. So we were very mindful of making sure that the small commercial clubs in provincial areas could continue to operate and would continue to operate even if they were downgraded from a full racing club down into a training facility.

But we also wanted to make sure that we protected those with very strong community interests. There are many, many good examples. Marlborough is one of the most interesting ones where A&P shows are held regularly at the racecourse. There’s joint ownership or overlapping ownership. There are lots of courses where there’s such a strong community interest that to see those courses sold off would be the wrong thing to do and therefore we have a process that’s lined up and caters for that. But there’s also a process where courses may want to be sold. And I think we’ve struck the right balance, and I certainly commend the bill and look forward to the committee of the whole House process when we can discuss it in more detail.

I remember taking my grandmother back to Charleston many years ago, and she pointed out where the racecourse had been there. There’s no evidence left of it, but she talked about what an important part of the Charleston community it was at the time, and I’m reminded of that now, as now that Charleston problem has become a problem for many other communities in New Zealand.

As we’ve heard today, many of those racecourses physically dominate not only the town, and are an intricate part of the town, but also the race meetings themselves. This bill isn’t just about saving the racing industry. It’s about making sure it can thrive again and be the part of communities that it was in the past, producing the winners we’ve seen and the international reputation we’ve seen, and, importantly, making sure that it remains a part of New Zealand culture. I commend this bill to the House.

Thank you, Madam Speaker. It’s with great pleasure that I speak in support of the Racing Industry Bill in the second reading. As a former racing Minister, I only had a few months in that role, and there wasn’t really time to enable us to make the changes that were needed within the industry. I was just going to congratulate the New Zealand First Minister at this time, Winston Peters, who has done a fantastic job over many years of being an advocate for the racing industry and has made this bill go through Parliament. So I just want to thank him for actually doing this, because on behalf of the industry, it has been something that’s been looked forward to for a long time.

I’m going to give him a little bit of a brickbat, though, at the same time, because it has been the end of a parliamentary term before we actually get to the stage of passing this. On the desk, when he took over the ministerial position, he had the ideas that were needed to actually go ahead. So it has taken a long time. It’s taken a long time, but we have got there in the end, and that’s good. [Interruption] It’s good to see there’s that vocal support amongst the Parliament, because racing has felt for a long time that it hasn’t had the recognition in the parliamentary process that it felt it deserved, and to see that we’ve got active members of this House engaging in this debate today shows that it is now something that people are very much encouraged to take an active interest in.

I just want to thank all members of the House that have been on the Transport and Infrastructure Committee, that have done a fantastic job in getting it to the stage, and especially to the National members, especially Ian McKelvie and Andrew Bayly and Tim van de Molen, that have been so active in making the changes to this bill to make sure it is practical and achieves the goals that the bill was actually intended to do. Although I wasn’t on that committee, I understood that it was a bill that needed a lot of work to be done on it, and it was Andrew Bayly and Ian McKelvie and Tim van de Molen that did that hard lifting to change it, to make sure it is practical and successful. So thank you to our members of the committee that were on the bill.

When we look at racing, and when we look at what’s happening here at the moment—you know, I think Andrew’s speech was very good where he went through the TAB and the intellectual property part of it and how important that is to distinguish so that there is that ability to maintain that intellectual property should anything happen to the TAB. That’s a fundamental part of the change that you’re seeing coming through in the bill now, and that’s something that I know Andrew spent a lot of time in really pushing from his commercial background. The governance arrangements of the TAB and also Racing New Zealand are to reflect the major players of the industry, being the three codes, but also to reflect that the TAB actually has a big role in sports betting, and also the independent role of others on that board as well—it is important to give it the strength that it needs to carry on. The arrangements between those two boards around the accountability between them to give more support to decision making, and also to give the codes a feeling that they are being listened to and they have a TAB that works with them and for them, I think is something that they have been looking forward to especially.

Then we look at the individual codes and their role of appointing to Racing New Zealand, and that’s another part of the changes that we’ve seen throughout the process that’s a core of the bill. Then we get to the sale of surplus tracks, which had been a major issue and still is a major issue, especially when tracks feel that they haven’t received the ability, or the licence, you could say, to operate, not having race dates. That puts them in a very difficult predicament in managing their operations and, effectively, challenges them about the ability of their racetrack to continue. That is a difficult process, and there’s still a lot to be done in that area. I know that the committee has spent a lot of time in a very detailed process of looking at a number of tests to determine whether there should be the transfer by Order in Council of surplus venues or to allow parties to renegotiate their position. There is trying to be, in those tests, a degree of comfort to those clubs, that if they don’t have the race dates that they require, there is a process there so that they can have some negotiation and look at their individual circumstances.

So this bill is long overdue. It is something which the racing industry has been looking forward to for a long, long time. Every time we delay this bill, the racing industry loses money. As Andrew Bayly said, it’s an industry that has a proud history, and as the Minister said, it actually has very proud achievements in just the last day or so. You know, it’s an industry that has a bright future ahead of it if we’re looking at a productive, primary-based New Zealand economy that’s going to take on the world and succeed. We are good at breeding horses, we’re good at training horses, we’re good at racing horses, and we’ve got the best people that can manage horses, buy horses, and look after horses in this country. The success and passion of those people deserve a Parliament that passes legislation that’s in their best interests, and that’s the really important bit that I think—they will be looking at this Parliament and saying, “Finally, we’re being acknowledged and something is being done to try and stem the flow of losses and the difficulties the industry was facing so that we can actually celebrate the successes and rebuild an industry that is world class and has a tremendous future ahead of it.”

So this is a good day for racing in New Zealand, to see Parliament coming together and supporting this bill. I know that the sector will be very pleased to see members of Parliament coming in with that support, not only through this legislation but in their support of the hard work that those people do every day because they are passionate about their horses and they’re passionate about the industry they’re part of. They’re good, keen New Zealanders that really do work hard and try and do the very best for—

💬 Barbara Kuriger: Employ a lot of people.

Yeah, there is a lot of employment, but there are a lot of employees there that work really hard, and to see Parliament supporting them, I think that will be something that they’re very pleased to see. We recommend this bill to the House and thank everyone involved for getting it to the stage that we can get support from all the parties, effectively, that are the main players and get this bill through. Thank you, Madam Speaker.

E Te Māngai o Te Whare, tēnā koe, thank you. Can I congratulate the Transport and Infrastructure Committee for the huge amount of work that they have done on this bill. I wasn’t a member of that select committee, but my colleague Jan Logie was. About a quarter of the submitters had quite significant concerns about Subpart 2, I think, of the bill, which is the part concerned with where clubs may be dealing with surplus venues that the code wants and the provisions around how, particularly, those smaller racing clubs, the smaller racetracks—Mr Greg O’Connor mentioned the Charleston racecourse, no longer in existence—how that whole transfer process works.

I notice in the bill that the select committee has completely rewritten clause 26 and some of the subsequent clauses to recognise the concerns of, particularly, smaller communities where their racetrack is used for a number of other events. In Kaikōura, for example, Seafest takes place there. In Kūmara, the Coast to Coast race uses the Kūmara racecourse. So the committee has done a very good job, I think, in responding to submitters’ concerns and putting in place a number of criteria that the Minister has to consider before making a recommendation for an Order in Council which would transfer “surplus” assets like a racecourse from the club to the code.

The Messara report recognised that there needs to be some rationalisation in the industry, but there has been concern that these significant hearts of the community in some areas could be, in the interest of efficiency, in the interest of rationalisation, transferred to the code to the detriment of the community. So that is a very comprehensive list now of criteria, and also just the way the select committee has changed the process. The Minister for Racing must appoint a reviewer before recommending an Order in Council—a person with appropriate experience. And the cost of this whole exercise of considering whether a venue should be transferred to the code must be met by the code rather than the club concerned. And yes, it is noted that some clubs don’t have their own racecourses—they still organise meetings at other racecourses, but the work that the select committee has done on reshaping this bill, the comprehensive recommendations in the report back, and the many changes are really an example of select committees working really well to take on board the concerns of submitters.

The Green Party is, reluctantly, supporting this stage of the bill—cautiously, I think, is a better word—because of these changes that have been made, and also because of the dialogue we had with the Minister for Racing in the early stages about strengthening the harm minimisation provisions in the bill. One of the TAB New Zealand’s functions is to look at the whole development of products or when they’re developing new products to look at how gambling harm is going to be minimised and what measures are going to be put in place to do that. So the requirement too to have on the TAB board people who’ve got an understanding of problem gambling and how you minimise harm is quite critical, and the fact that we have regulations which go through some specific processes to minimise gambling harm. So that’s been a significant improvement in the bill from the start, but really do commend the work of the Transport and Infrastructure Committee and Jan Logie.

The Green Party’s support for this bill will not stop us continuing to campaign to have a ban on greyhound racing—that was outside the scope of this bill, but as we’ve seen with recent media coverage nearly 300 greyhounds were put down in 2019 because they couldn’t be rehomed. The greyhound racing code is one of the codes covered by the bill, but the fact that Aotearoa New Zealand is one of only eight countries in the world which still allows greyhound racing speaks to an inadequate attention to this fundamental animal welfare issue.

The other key issue is that with this tension in the racing industry between the bigger venues with more sophisticated facilities and better tracks, those tracks will often be harder. That puts more risk to the horses going on those because of the harder surfaces. So we really want to encourage the industry to continue to look at how it can improve animal welfare, particularly for the horses, and the Green Party support for this bill is because it does not prevent us continuing to campaign for an end to greyhound racing in New Zealand. So we are supporting it cautiously.

Thank you very much, Mr Speaker. I stand today too to support the Racing Industry Bill and, as my colleague David Bennett said in his contribution just recently, a lot of the work and credit that has gone into this bill is due to the efforts of Ian McKelvie, Andrew Bayly, and Tim van de Molen. In fact, I did not sit on the Transport and Infrastructure Committee, but I understand from my colleagues and from the updates that I’ve sat in on over the course of the select committee process that this bill is almost unrecognisable now from what it was when it was first introduced. As Ian McKelvie referenced in his speech, whoever drafted the bill had clearly not even read the Messara report, it was so far removed from the advice that was given and paid for.

There are, as we’ve heard, some significant recommendations that are being enacted in this bill. One of those is the establishment of Racing New Zealand, and that was a strong recommendation from the Messara report. In that, we have the three codes—Thoroughbred Racing, Harness Racing New Zealand, and the New Zealand Greyhound Racing Association—now working with a common interest to work with those codes on some common ground. Originally, that was going to be enacted via regulation, but the National Party members decided and recommended in the select committee that this needed to be enshrined in the legislation, and that gives it some enduring life ahead of it. It is not subject to any sort of political manipulation along the way.

Most of the speakers have referenced the issues that came up out of this bill which relate to the assets of the various clubs, and for myself, on the West Coast we have five tracks. We have one up in Westport; there is one in Reefton, which is a dual-code track; the Greymouth track; Hokitika; and the one closest to my heart and that I’ve had quite a lot to do with over the years is the Kūmara track.

Now, we know that these are far more than just racetracks, and, as the Green Party has acknowledged, these are very valued community assets. I know that the ones that are on the West Coast are used for a range of things, from weddings—the New Zealand Motor Caravan Association uses them to park up on. We have Scouts and Guides that use those facilities for their camps. The Coast to Coast, of course, is a very famous one that uses the Kūmara track every year as its camping space and briefing area but also local schools use their local tracks for cross-country, and what we need to remember is that all of these tracks across New Zealand are looked after and cared for and have been bought and paid for and developed over many years—over a hundred years, in some cases—by volunteers, and I think it’s very appropriate that Volunteering New Zealand is acknowledging our volunteers this week.

So I pay tribute to those people who have given selflessly for many, many years. I’ve got a very dear relative who is in his 90s now, who has recently retired from the Kūmara Racing Club. So a bit shout-out to Pat Fitzgerald, who has been doing that work as a volunteer, he reckons, for about 75 or 80 years. That is the kind of commitment that local people have to these facilities, and they didn’t want them to be confiscated, as was enabled in the original piece of legislation. So a huge amount of credit to my colleagues for enabling the disposal of these assets now in a very considered way that actually brings in the contribution of those community organisations.

I can recall about 13 or 14 years ago, in a former role, meeting with New Zealand Thoroughbred Racing to talk about the future of racetracks and the clubs. At that time, we could see that the bar was slowly lifting, making it more and more difficult for these local clubs and volunteers, who have limited income, to achieve the higher standards.

A lot of that was triggered from the health and safety regulation, so it was improving things like the running rail and track surfaces, and then it moved into things like the internal assets—so the shower blocks and toilets that the jockeys would use. They were all very understanding that we would want to lift that bar, but it made it more and more difficult for these clubs to remain viable, so we ended up in the situation of having quite a lot of tension within the clubs and pressure on them to continue to hold their race meetings. So we now have a very well-considered methodology for disposal of those assets, and, as I said, it does include a huge consultation with the club.

But I do have to confess that when I saw the first tranche of this piece of legislation, I was alarmed at the ability for the assets to be confiscated. I did go and talk to one of my local clubs who held a very large piece of freehold land, and I helped them broker a deal where those assets were sold to avoid the confiscation. So they’re now held for the community and for the long term.

We see in this bill that the motivation is around attempting to get the racing codes to be more profitable and to encourage more participation. I know, from sitting in on an Estimates hearing in a select committee last week that had the Minister there, of the Minister’s passion for ensuring that the industry does thrive, and I think we all do that, because we are all cognisant of the fact that there is a huge amount of employment that revolves around the racing codes here in New Zealand.

But we’ve also got a great track record for our stock that we breed here in this country and for the commercial return that that does bring to the country. So we do start with the breeders, and we have some of the best in the world in New Zealand. Then, we have the owners, and I’m not sure if any of my colleagues have ever been an owner or a part-owner of a racehorse, but—

💬 Ian McKelvie: That’s why we’re so poor.

Exactly, Mr McKelvie, that’s why you’re so poor. It’s because they are not what most people would invest in to make a great return, but they are something that people invest in because they do enjoy this sport. They enjoy the thrill of taking a horse to the track, and, as a former clerk of scales, which is a job that I did on our local track for about 10 years, I can attest to that.

The passion that the people in the industry have for the codes is extremely high, and that’s what keeps them coming. But the owners do require some return on their investment, and the stakes in this country are relatively low now and have been falling over time. So we do need to improve the return to the owners. But, of course, then we have the punters. Those people that go along to the tracks and those people that bet on the TAB, they’re all part of the mix of the racing industry here in New Zealand, but, of course, there are the trainers too, who dedicate massive amounts of hours, and the jockeys and all the drivers—whichever code we are referring to—they also get a huge amount of employment out of that. That’s not forgetting the stable hands, who take care of the animals and look after them, and even down to the transport operators that move the horses around to the various tracks and race meetings.

So there is a huge incentive for us to ensure that we look after the codes, that we make it more profitable, and that there is an improvement in the stakes so that the industry can continue to thrive. As a result of the changes that my colleagues have brought to the select committee, I believe that we have a bill now in front of us that will protect the industry and will give it some confidence, going forward. I have pleasure in commending it to the House.

This is a split call. I call Willow-Jean Prime—five minutes.

Thank you, Mr Speaker. I first just want to acknowledge the passion of the current Minister for Racing. It was very clear in the Estimates hearings last week, his passion. I also have sat through the debate and I have heard a lot of reference to the Transport and Infrastructure Committee and how everybody worked collaboratively to produce the best piece of law. I also heard that it’s long overdue, and I don’t want to prolong it any further. So I commend the bill to the House.

Thank you, Mr Speaker. Well, it is a great pleasure to speak on this bill. I, too, would like to recognise the contribution of Parliament’s own horse whisperer in Ian McKelvie. Ian has involvement in horses of all sorts from gallopers, harness racing, and some polo ponies. So he’s knows his horses inside out.

💬 Hon Grant Robertson: Is he any good with tips?

Well, he doesn’t share them with me. But should he, you’ll be first on the list. Well, look, this is a great bill now and it was a lot of work that went in. I think Ian’s in-depth knowledge of the horse industry, as well as Andrew Bayly’s commercial acumen as well as his involvement with horses, has knocked this bill into shape; not diminishing other people’s contributions, but I know they were the major contributors to the shape that the bill is in today.

There’s been a lot of talk about the details in the bill. I want to focus on the local impact in my area, which is in Marlborough, starting there. There’s been 150 years of racing in Marlborough, but the Waterlea course, where racing is currently held today—just recently celebrated 100 years of racing, when the first thoroughbred racing event was held in March of 1920, so it’s got a long history. It’s one of the courses that could have been badly impacted by the shape that the bill was in as it went to the Transport and Infrastructure Committee. The course is now struggling to get licences to race or dates to race, and now, in that situation, they could have had their assets taken and redistributed into the code. Fortunately, they have quite an active racing community. There are a number of horses trained there. The bill now quite clearly sets out that if it’s utilised for training, that would be a major advantage. It’s also its location. Geographically, virtually at the end of the Cook Strait means that a lot of horses overnight there in their transport, either north or south from island to island, and it’s utilised very frequently for that purpose.

Waterlea Racecourse is kind of unique almost in that it has an all-weather harness track and a grass thoroughbred track and it’s utilised by both codes, which jointly own the track. It’s also utilised significantly by community events. There’s a massive classic car event there, which fills up all of the car-park area, and hundreds of people, if not thousands, turn out to that. They also have motor homes that stay on that property and lots of other events in the racecourse. So it is a community hub and it’s proudly owned by the community.

A little further south, if we go two hours further south to Kaikōura, there is the racetrack there where the Kaikōura Cup is held every Marlborough Anniversary Day. And it’s the last hit out before the New Zealand Trotting Cup. So it’s a big event in the racing calendar, where those horses that will go on to shine at the trotting cup have that last outing competitively before then, and it quite often shows that the horse that wins will win the Kaikōura Cup. That event is well attended from people all over the country, actually, that turn out to watch that. They spend a great day right by the sea. Sometimes there’s the odd southerly that comes through, but generally it’s a beautiful day there. Again, this is a community track. It has the A&P show held in that event. The show jumping’s in the centre of the track and the sideshows and so on around the rest of it. It is often used for horse events throughout the year. So it’s a valuable community asset.

Had this bill not been knocked into the shape it was, it could have been taken and those seats vested in the codes. That would have been outrageous from a community perspective. Fortunately, National put that into shape and those two members that I particularly mentioned before were largely responsible for that; I really thank them for that. And with that, I commend the bill to the House. Thank you.

There’s been a certain amount of historiography going on today, where the Opposition claims credit for the good work of the Rt Hon Winston Peters, the Minister for Racing.

What this sector has been wanting for a long time is certainty, and David Bennett, a former Minister for Racing, said that the racing sector had felt like they hadn’t had a voice in this place. And that’s right, because for the nine years that that party was in Government, they didn’t have a voice, and I would like to pay respect to the Rt Hon Winston Peters for getting a bill into the House and getting it passed within one term because that party over there had nine years to do it and never did it at all.

So let’s just have a clear picture of what is happening here. This piece of legislation has been brought here, it has been passed, and the sector will now have certainty. And that is what the history books will read about this piece of legislation. I commend it to the House.

It’s my pleasure to take a call on this second reading, and, as you know, this side of the House is supporting this bill. The reform of the racing industry has been a long time coming, but I would say that unless the Transport and Infrastructure Committee, despite what the previous member, Kris Faafoi, has just said, hadn’t done its work, this side of the House wouldn’t be supporting this bill, because there were massive errors in it as it was first reported back.

It’s important that I, sort of, put a bit of context on my own perception of this bill, because I have been an avid supporter of the racecourse in Hastings and what was called the Hawke’s Bay Jockey Club and subsequently has changed to Hawkes Bay Racing. I have attended many of their events and I have supported them and had many meetings, including in my previous role, and I have watched over years as they have struggled. They have sold land off. They have had difficult years. They now have a grandstand, and many of you who have been there will know it’s older—probably has earthquake-strengthening issues that will have to be addressed. Their fundamental modus operandi into the future is going to be very difficult. Despite that, the Spring Carnival, as it’s known in Hawke’s Bay, is one of the events on the racing calendar of New Zealand.

We’re supported by two smaller clubs still in Hawke’s Bay. One is in Mr McAnulty’s sort of area that he looks after as a list MP in Central Hawke’s Bay: that’s a small racetrack there. Another one is the Napier electorate, looked after by the Hon Stuart Nash, in Wairoa. Both of those clubs are unlikely to survive in the current arrangement, or even to the future, because, simply put, there are not enough people supporting the industry, there’s not enough money in it, and things need to change. I’ve had conversations with the presidents of those various clubs about that, some of those have been quite unpalatable—but they are the reality. I acknowledge, in the Hawke’s Bay case, president Eliot Cooper for the work that he’s done in guiding us through the changes that are needed.

In Hawke’s Bay and the Hastings racing centre, I look at a beautiful piece of land in the middle of town, all zoned residential, with an older set of grandstands on it, but for the Spring Carnival it becomes a hub of activity where people love to go. But it cannot support itself under the current arrangement.

I also say that this is a big industry. We’re not just talking about the tracks and the odd race but the owners, the breeders, the trainers, and the jockeys. Simply put: if we don’t make these reforms, it’s my view that there will not be an industry in New Zealand in 10 years’ time.

I disagree with the previous speaker, Kris Faafoi, who said that previous Governments haven’t looked at this or done things about it. The Hon David Bennett got very close to bringing legislation before this House, but the election came along and he didn’t get it through. So now we are getting to it.

I have talked to and met—some quite bruising encounters with members of the industry about what needs to happen. But, fundamentally, if we don’t do this, this whole industry will collapse in 10 years, and it has a massive future for New Zealand if it’s sorted out.

I also want to acknowledge the volunteers that are involved, and some of this is difficult for them. So they are linked to a small club, whether that’s in Central Hawke’s Bay, in Waitakaruru, or in Wairoa—

💬 Kieran McAnulty: Great clubs.

They’re great clubs, and they have a community focus and people work for nothing for years to keep them going; they put sheep on them to keep the grass down, they mow the lawns, they run all sorts of things from them. Same in Hastings; it’s a bit more professional, they have a small secretariat of staff, but, none the less, a whole lot of volunteers on race day front up. So this is really important to them and their industry.

I do want to congratulate the select committee, despite being somewhat belittled by members on the other side about their role, because we have now arranged a place where most members of this House have a level of comfort, particularly around what will happen to the courses. That was a stumbling block; I think, up until that point, we had big issues.

I also want to thank John Messara for what he did in bringing his expertise from Australia to New Zealand. My understanding—and I’ll stand corrected—is that he didn’t get paid to do this; he volunteered to help New Zealand racing through its issues. I think we owe him a great deal of gratitude. I read his report, and, to be clear, I couldn’t find too many things wrong with it; what I did find was that when the Government tried to interpret his report and bring it into first reading, it was incredibly different.

I also want to say that, even in my home town of Hastings, 10 years ago we fundamentally looked at a review of Hawke’s Bay racing and the Hawke’s Bay A&P Showgrounds, to relocate them both at the showgrounds in a $30 million facility. We would redevelop the land where the Hastings Racecourse is currently on for houses, and that was a way at that time of keeping Hawke’s Bay racing solvent. Now, we couldn’t get agreement and there wasn’t enough money, but I point that out today because these challenges that the industry faces are not new; they’ve gone on for a long time. The thing that I found interesting in that particular series of negotiations was that we had very similar people that were running Hawkes Bay Racing as were running the Hawke’s Bay A&P Society—good, hard-working Kiwis that cared about their role, their facilities, but they lacked the money, clearly, to make it all work.

So, in terms of the real nuts and bolts of the bill, the TAB and how it works has been amended to ensure that all racing codes and sport bodies have the ability to make specific nominations, based on merit, to sit on the board. Fundamentally, that means that everybody can be represented or has a chance of being represented. Before that, I even had people come to me from sporting codes, who were very uncertain and concerned that the racing industry would dominate the TAB, they would dominate the flow of money, they would dominate how the money was spent, and to the detriment of other sporting codes—bearing in mind that many types of sports are now subject to some type of gambling on them. So this has been changed, and I think that’s for the better.

I agree with Mr Bayly, who knows more about corporate law and how things work than I do, about the fact that intellectual property should remain with the codes rather than being transferred to the TAB. That has been heavily supported by the industry, and the select committee has arrived at that, and that’s currently in the bill.

John Messara recommended a new board called Racing New Zealand to undertake a number of roles, including setting race meeting dates and to act as a bridge between the TAB and the codes. At this point, I want to talk about that tension, and I see it in Wairoa particularly—it’s probably in Central Hawke’s Bay, although I haven’t heard as much about it. In Wairoa, they have a wonderful race meeting—certainly once a year; sometimes twice a year—but the problem is that it’s a beautiful community outing but it doesn’t make any money. The stakes aren’t high enough; there aren’t enough races. The TAB, fundamentally, has decided that they won’t continue to keep being present on course and to televise the racing. Now, what that means is that, eventually, if the TAB keeps that going, then Wairoa will face a difficult future. So Racing New Zealand, as a new entity, has an ability to work between TAB and the codes to manage fairness and equity.

In closing, in the last minute or so, the surplus of racetracks—that has been a very contentious issue. So if you sit in my own electorate, my racetrack is fine. It will be fine and it will benefit from what this bill is trying to do. But if you go to Wairoa and Central Hawke’s Bay, then their future is less clear. The ability, as was previously put in in the first reading, to mean that, effectively, Racing New Zealand could hoover these courses up and sell them and do whatever they wanted with them was widely opposed—and so it should have been. But now we have new clauses which allow the racing club, if it doesn’t think it can make a go of it, to have an ability to vest the proceeds back to the code, but if there are grounds for significant community interest, then, effectively, you can appoint an independent reviewer that can independently review everything and make a recommendation back to the Minister. That is the great work that the select committee did. I give all members, on both sides, credit for coming up with that solution—because without that, I wouldn’t be able to stand here and support this bill as I do. Thank you.

As the only bookmaker ever to have been elected to this House, it is a great day to stand here and support this bill—a bill that will save the industry, or certainly take successive steps towards doing so. It was needed. It is a long time coming. It should have happened in the previous Government, but here we are today. I echo the comments of those who acknowledge the work of the Transport and Infrastructure Committee. I make one point to counter the claims of the Opposition benches: they cannot have made substantive changes by themselves, because they do not have a majority. What this demonstrates is that the select committee worked collaboratively. I think the National Party would have served themselves and served the racing industry better if they told that story of collaboration, because this is an important industry for the country and it is an industry that is recognised by all parties in this Parliament. Today is a good day. I’m pleased to see this bill continue on to the next stage.

Bill read a second time.