Racing clubs not happy with Racing Bill seizure of assets provisions

Tim Antonio, the Chairman of the Dargaville Racing Club, has written an open letter to Winston Peters expressing concerns over the Racing Bill currently at committee stage in Parliament (it passed it’s first reading in December).

Included in it’s provisions is the power to stop a racing club from racing and to dissolve the racing club, and remarkably to transfer any assets to ‘the racing code’.

Many small racing clubs have been established and maintained by local communities. It has been proposed that twenty racing clubs be dissolved, and appear at risk of having all assets taken from them.

Image

here is the proposed Bill (PDF):

Click to access 362429780labourandnewzealandfirstcoalitionagreement.pdf

It is known that people with ‘racing interests’ have donated to the New Zealand First Foundation, which is now under investigation by the serious Fraud Office after the Electoral Commission found that donations weren’t passed on to the NZ First Party.

See RNZ: NZ First Foundation received tens of thousands of dollars from donors in horse racing industry

The New Zealand First Foundation has been receiving tens of thousands of dollars from donors in the horse racing industry in payments which fall just below the $15,000.01 at which party donations are usually made public.

As racing minister, New Zealand First leader Winston Peters has delivered significant benefits to the industry, including millions of dollars of government money spent on tax breaks and scrapping betting levies.

It has long been known that Peters has promoted some racing interests, and that some racing interests have already received tax breaks from Peters (the current Government). The Spinoff:  Winston Peters stages his own Moment of Truth, live on Facebook

“How do you respond to the horse racing industry donations to your party as the horse racing minister?”

“For 30 years,” Peters said, “I’ve been talking about the need to save this industry.” Why would there be any surprise that he was supported by individuals interested in the industry, and related companies, to the tune of $80,000 in 2017, according to RNZ?

Besides, Peters observed, the current racing policy is the result of an independent report by Australian racing expert John Messara. He omitted to mention that Messara’s report was submitted in July 2018, and two months earlier in May Peters had announced a $4.8 million in tax breaks for “high quality” horse breeders, which officials estimated may blow out to $40 million and which was the only tax cut in the coalition’s first budget.

The 2017 New Zealand Labour Party & New Zealand First Coalition Agreement gave Peters the position of Deputy Prime Minister and Minister of Racing, and commits Labour to…

  • Support New Zealand First’s Racing policy

That’s a remarkably open or blanket commitment.

Maybe Mr Antonio and others concerned about the Bill would be better targeting the Green MPs who also voted for the First Reading. But are they committed to supporting the Bill? Maybe. From 2017 New Zealand Labour Party & Green Party of Aotearoa New Zealand Confidence & Supply Agreement:

Relationship to other agreements

Both parties to this agreement recognise that Labour will be working with other parties both in terms of
coalitions and confidence and supply arrangements.

Labour agrees that it will not enter into any other relationship agreement which is inconsistent with this
agreement and the Green Party and Labour agree that they will each act in good faith to allow all such
agreements to be complied with.

It appears that the Greens are committed to allowing the Labour-NZ First agreement “to be complied with”.

But Mr Antonio would also need to appeal to National who also supported the Bill at its first reading. But National MPs have expressed concerns about the power of the Racing Minister and the ability to seize racing club assets.

Hon DAVID BENNETT:

Now, in the bill the Minister has made it very clear that he has the ultimate discretion over who will run the racing industry, going forward. That is a lack of accountability, a lack of ownership, and a lack of respect for those people that are in the industry. For example, the Minister can appoint the board to replace codes if he needs to do so. So the codes that may be out there, the racing codes of thoroughbred, standard bred, and dogs, can be replaced. Their boards can be replaced by the Minister at his whim under this legislation. The Minister can also appoint a commissioner for any disputes between the three codes, giving him ultimate discretion, again, to dictate what may be done.

But the greatest discretion this Minister has is in regard to the assets of clubs and the relationship they have with codes. Racing clubs, under this bill, will have to abide by the rules of their relevant code.

The National Party does not accept that lack of independence and clarity as worded in this bill. It is very difficult to see how clubs can have any autonomy under this legislation. They are, essentially, at the whim of the code, and if the code is not effective in putting pressure on, they can then be at the whim of the Minister. This bill gives the Minister the ability to override the club’s decision and to vest their assets and their landownership in the code. It is, effectively, a mechanism where the Minister can nationalise racing portfolios and racing clubs, and can take away their ability to have independent racing operations.

On behalf of Labour: Hon KRIS FAAFOI

In terms of property, it is worth emphasising here that the preferred approach for property decisions is negotiation and for the community interests to be recognised. The bill introduces a suite of changes to resolve historical property issues that have contributed to the decline of the industry. Two property objectives are introduced to guide decision making by the industry: first, the value of racing property should be retained in the industry and used for maximum industry benefit, and, two, statutory provisions are introduced to support negotiations between clubs and codes on using surplus venues. The bill also introduces as a backstop a statutory decision-making process for the Minister for Racing to recommend an Order in Council to allocate property to the code. Provision is also made for payments to the club and community where it is warranted.

So the assets of clubs can be decided on by the Minister for Racing.

Also from Labour: KIERAN McANULTY

The Labour Party’s proud to support this bill. It is a bill that is needed, and it is a bill that will support an industry that many of us love.

It is a fantastic industry that supports many regions and provinces where many of us here in this House live, and I think that this bill, under the leadership of the Minister for Racing, the Rt Hon Winston Peters, will be seen and looked back on in history as the thing that rejuvenated this industry. I commend it to the House.

The Bill appears to do the opposite of supporting the regions, especially the South Island.  NZ First mustn’t get many votes of donations from the South Island.

BARBARA KURIGER (National—Taranaki – King Country)

We recognise the need for change in the industry. We are supporting the intent of this bill, and we are supporting it to first reading, as we look to help the racing industry transform into the competitive market that it does have the potential to be. But where we disagree, and where we want to have a good discussion at select committee, is that this bill gives too much power to the Minister when it comes to decisions around these racing venues and racing tracks around the country. In particular, we can’t support Subpart 2 of Part 1 in its current form, because this Subpart 2 refers to the transfer of assets and surplus venues. Really, this will be like a red rag to a bull to many in rural provincial New Zealand.

So, clause 25, that allows the Order in Council recommended by the Minister to grab these properties if an agreement can’t be reached by local clubs, is a step too far for the National caucus, because we believe in private property rights and we know that these people have put a lot of effort into this over a period of time.

No Green MPs spoke on the Bill.

It’s not just the potential seizure of assets, the forced closure of courses is a big deal for regions.

Look at the clubs that could be closed in the South Island: Reefton, Greymouth, Hokitika, Motukarara, Timaru, Kurow, Oamaru, Waimate, Oamaku, Winton and Gore.

That guts racing from West Coast and the bottom half of the South Island, and not just country clubs. Places like Timaru and Gore have been significant in racing for a long time.

 

Peters profiting from bloodstock politics

The night before delivering on promises to the thoroughbred bloodstock industry Winston Peters fed industry leaders for a generous dollop of dollars.

Stuff: Winston Peters’ menu of prawns, porkbarrel and horse meat

In May, we reported that NZ First’s donors and supporters in the thoroughbred and bloodstock industry expected him to deliver their wish-list: an all-weather track, tax breaks for breeding, restructuring the NZ Racing Board and potentially outsourcing some TAB services to an Australian provider.

And so we come to Wednesday night, where the Deputy Prime Minister and NZ First leader gathered together three of his senior MPs and and about 80 business leaders to start with pan-tossed prawn tails and cognac liver pate and finish with his plans in government.

At $600 a head, these guests were not paying for their dinner. With respect to the head chef at the Tauranga Club, no Bay of Plenty restaurant charges that for dinner. They were paying for access to Peters and offering their financial support to his party to deliver on their wishlist.

Many were from the world of breeding and racing: Te Akau Stud’s David and Karyn Fenton-Ellis, Blandford Farm’s Graham Bax, Brendan and Jo Lindsay of Lindsay Racing, and Mark Chitty of Haunui Farms.

Peters had good news for them: he had delivered everything he promised. Not just one all-weather racecourse but three, not just tax breaks in the Budget; the very next day he would be announcing plans to restructure the NZ Racing Board.

He did not discuss details but he boasted of his restructuring plans to his wealthy donors, even before he’d disclosed them to the Racing Board itself.

The following evening at Claudelands Events Centre in Hamilton, Peters unveiled the proposed restructuring: slashing the numbers of small courses from 48 to 28, outsourcing the TAB to an Australian betting agency, replacing the Racing Board with administrative bodies controlled by the thoroughbreds industry, and the locations of the three synthetic race tracks at Riccarton, Awapuni and Cambridge.

Some of this, like cutting back the number of race courses, is sad but sensible policy.

But some initiatives – the all-weather race courses – have bypassed proper Budget approval.

And Treasury and Inland Revenue papers published this week conclude that tax breaks for “good-looking horses” will do New Zealand no good whatsoever. “Neither tax concessions nor subsidies seem justified,” they warn.

The only people who benefit from Peters’ tax breaks, estimated by Inland Revenue to cost NZ up to $40 million in lost revenue, are those who trade in horseflesh.

And those who will benefit appear to be being generous to NZ First. $600 times 80 is $48,000 – even if half of that was costs for food and drinks (that’s generous) that looks like a big payoff.

This blatant mutual back scratching isn’t all that surprising from Peters, but it must make their Labour coalition partners a bit uneasy, and while the Greens are likely to turn another blind eye they must be aghast at how NZ First is creaming big government money to their and their financial supporters’ benefit.

Electoral Commission investigating pro-NZ First advertising

The Electoral Commission is investigating pro-NZ First advertising during the election that was not declared by the party in their returns.

RNZ: Electoral Commission looking into ad in horse racing mag

The Electoral Commission is looking into an ad placed by the horse racing stalwart Sir Patrick Hogan during last year’s election campaign.

The ad, in the racing industry publication The Informant last Septemberurged people to party vote New Zealand First because of its leader Winston Peters’ support for the racing industry.

The Electoral Act requires people who take out ads promoting a political party during an election campaign to have the party’s permission.

New Zealand First said its party secretary did not authorise any third party advertisements.

And NZ First did not declare this advertising in their electoral return.

Otago University public law professor Andrew Geddis said if Sir Patrick did not have the necessary authorisation he may have committed an illegal practice and could be fined up to $10,000.

The Commission has not had a great record trying to enforce electoral law so I wouldn’t expect much from this.

But Hogan and the racing industry got what they may have expected from Peters – a special tax break for horse breeders. Last week’s budget allocate $5 million on tax deductions “for the costs of high quality horses acquired with the intention to breed” if it is a stand out yearling “that commands attention by virtue of its bloodlines, looks and racing potential”.

It wasn’t made clear whether the Minister for Racing would personally judge the quality and looks of yearlings.

See  Peters and a handsome horse called Neoliberalism.