Page 6161 - Week 19 - Tuesday, 17 December 1991
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The purpose of this legislation, introduced by the Chief Minister, is to bring the ACT tax regime on licensed clubs into line with that which exists in New South Wales. It does that in a variety of ways. It removes the requirement for an annual licence fee for machines and puts that onto a monthly basis. That is something which I know has been a real problem for many clubs over a long period. I am pleased to say that the Government has listened to the advice from the Licensed Clubs Association and to the many calls from people within the club industry, and has agreed to remove that requirement which caused cash flow problems for a large number of clubs.
At the same time, it has moved to amend and vary the rate of taxation which applies to the profit that comes out of poker machines that the clubs keep. As we are aware, the average machine, I guess, depending on what denomination it is, allows that 87 per cent be returned to the player and 13 per cent be retained by the club. It is that 13 per cent which is retained by the club for various club purposes which is subject to taxation. This legislation varies the rate that is applied to that amount retained by the club.
The provisions that the Chief Minister has introduced are similar, in a lot of ways, to those which apply in New South Wales. From now on, for that amount of a club's revenue for the relevant month that does not exceed $8,000, or up to $8,000, the tax will be at the rate of one per cent, and every dollar that exceeds $8,000 worth of revenue in a club will then be taxed at a flat rate of 22.5 per cent. If the licensee is not a licensed club, but is, for example, another organisation, the rate of tax is then specified at 35 per cent.
The Licensed Clubs Association, like any good organisation which lobbies on behalf of its members, is pleased to see, I have been advised, that these provisions will apply. These are the rates which apply in New South Wales. In New South Wales the rates are expressed on an annual basis. If the gross revenue on an annual basis does not exceed $100,000 the rate is one per cent. Above that it is set at 22.5 per cent.
However, in a lot of ways the rate that is now being applied to the ACT clubs is, in my view, not entirely fair. Of the 65 clubs in the ACT there are, I am told, some 15 or so clubs which will pay tax on their gross earnings at only that first rate of one per cent. Frankly, I am amazed to hear that there are clubs which have a gross income of only $8,000 per month from poker machine revenue. I made inquiries as to what form of clubs they are and was told that they are clubs which exist for very specific and special purposes. For example, they might be clubs which are open only on certain days of the week at sporting venues, or clubs which are not operating on a normal 9 to 5 or 9 to midnight basis, et cetera, as most clubs do. That is quite okay.
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