Page 3277 - Week 09 - Tuesday, 21 August 2018
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in that it follows a path that has been beaten by New South Wales, South Australia, Victoria and Queensland. I know there will be more in this place in coming weeks.
Of course, we are also dealing with the EGM reduction scheme, despite the fact that the New Zealand experience has shown us that reducing the number of operating machines had no effect on total turnover. But the machine reduction, the associated trading scheme, has been a debacle thus far, and as we heard this morning the worst is yet to come. RSM put together a research paper earlier in the year in regard to the EGM reduction. They went through an extremely forensic process to arrive at a price for those authorisations—what they are actually worth to the club. Their extremely complex and open process arrived at a compensation price of well over $100,000.
The hardware itself costs $35,000. If you went to Aristocrat today, Mr Assistant Speaker, and wanted to buy yourself a poker machine it would cost you $35,000. That is what the hardware will cost. Obviously, without the authorisation the machine is worthless. But seriously, the government is going to offer $12,000 for a machine for which the hardware is worth $35,000.
In the Labor Club group, for example, the average revenue per year of that machine is $49,000. Over the forward estimates you are talking about $200,000. The machine is worth $35,000 and you are going to offer $12,000! Even at the smaller end, the Belconnen group, the average yearly revenue will be $16,000. This offer to the small and medium clubs of $12,000 per machine for their tools of core business is insulting. It is like going up to a tradie and saying, “We would like to buy all your tools. You are not allowed to buy any more, and good luck. Good luck on the way forward.” When you couple that with the newly announced per machine levy it gets reduced to virtually nothing.
Let us give the RUC as an example. They will surrender 10 machines, probably, and get a $100,000 sugar hit. Most of that sugar hit will be sucked up by this new per authorisation levy. I would love to know how the so-called diversification fund announced today by Neville Stevens will actually aid diversification. It is not a fund at all. It is not a fund. It is just another tax.
For the small clubs, for the very small clubs, of course there was no tax in this space at all. There was none. Belconnen bowlo pay no tax on their gaming operation. Their gaming revenue is not enough to cover even one bowling green. They will now need to find $2½ thousand for the new fund. And I think we all know where that is going to end. If the minister cannot see where that is going to end I would question his ability to hold the portfolio.
The Burns Club, aren’t they an interesting example? The Burns Club effectively used their diversification tax breaks, but all the money that they got from the government to diversify they used to buy more authorisations, which they got from the Tradies Group. They will now trade those authorisations back, having never actually put them on the floor, and cop a $12,000 hit for each of them, which will mean they will not have to reduce their reliance on gaming.
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