Page 4015 - Week 13 - Thursday, 10 November 1994
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Mr Moore: I raise a point of order, Madam Speaker. Now that we have had that word "junket" defined, I hope that it will always be used in that way in this house.
MADAM SPEAKER: Thank you, Mr Moore.
MS FOLLETT: That is a very good point. Madam Speaker, to compete effectively with other casinos for the patronage of junket operators and players, Casino Canberra is seeking a lower tax rate on junket profits. Currently the casino's gross profits are taxed at a rate of 20 per cent plus a supertax. The supertax ceases at the end of 1995. Junket profits can result in large wins and large losses. Under the current taxation arrangements a large win by the casino means additional tax revenue. Conversely, Madam Speaker, a large loss means less tax, possibly no tax, in the month or months that the loss occurs. Casino Canberra has agreed, therefore, to the segregation of junket profit and losses from other gaming profits. As a consequence, Madam Speaker, the risk to government taxation revenues from non-junket operations is eliminated.
Amendments to the Act are proposed which will provide for one rate of tax on junket profits and another rate of tax - the existing rate of 20 per cent - to be applied to non-junket profits. The amendments will also separate junket profits from non-junket profits for the reason I previously explained. Madam Speaker, the Government considers that a 10 per cent tax rate on junket profits is appropriate, for a number of reasons. Firstly, the disadvantages of Canberra's geographical location will add to the casino's underlying junket costs. Canberra Airport is not an international airport and competition with more conveniently located casinos should be recognised as a factor requiring particular consideration. There is also the factor of the increased monetary risks to the casino associated with highly skilled players and the fact that the Government does not share the risks of losses arising from junket operations. Finally, Madam Speaker, Casino Canberra has agreed that the tax rate on junket profits will be reviewed prior to 31 December 1995 when the current supertax arrangements on general casino profits come to an end.
Madam Speaker, the Government believes that there are significant benefits in encouraging junket tours to the Canberra casino. These include additional gaming tax revenue, estimated at $2m in the first full financial year; flow-on effects from additional tourism into Canberra - it is estimated that average spending by individual junket players will be $780 per person per day just on shopping, tours, restaurants and hotels; it does not include their gambling; and the fact that this level of high calibre junket business will contribute to putting Canberra on the international tourist map. Subject to the outcome of the current probity inquiry, the Sydney casino is scheduled to commence operations at an interim site in mid-1995. It is therefore strategically important to Casino Canberra that it have the opportunity to establish its junket programs before the Sydney casino commences operations. The amendments provided for in this Bill will give Casino Canberra that opportunity. I commend the Bill to the house, and I present the explanatory memorandum.
Debate (on motion by Mr Kaine) adjourned.
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