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Winston's speech at Karaka


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National Yearling Sales at Karaka  
26 January 2020  
Speech 
Rt Hon Winston Peters, Minister of Racing 

 

Good morning. 

It is a pleasure to be here on opening day of the 2020 National Yearling Sales Series.

Let us all acknowledge Sir Peter Vela and the Vela family for their outstanding contribution to the New Zealand racing industry, and continued support.

And a warm welcome to the Sales Series. This includes a special welcome to those who are visiting or watching from overseas.

This year is the 94th edition of the National Yearling sales. 

And 2020 has produced an impressive catalogue.  Yet again it enhances New Zealand’s reputation for high quality racing bloodstock.

Horses sold here at Karaka go on to have outstanding success both at home and abroad. 

Over 80 per cent of Group One winners in New Zealand last season were sourced at New Zealand Bloodstock. 

More than half of all Group One winners in Hong Kong last season were Karaka graduates. 

And New Zealand-bred horses have had similar success in Australia, Singapore, Malaysia and Macau. 

So over the next few days there are many reasons to bid high and buy well !

The government has a clear vision for this industry and the need to protect and promote this great sport.

The new Racing Industry Bill was introduced to Parliament just prior to Christmas and is presently before a select committee.

This once great industry is at the crossroads. It is time for the industry to work together and use the opportunity before it.

And yet there are some willingly spreading falsehoods and misinformation.

Ignorance will suffocate this industry, not save or grow the industry.

One trade publication has made a series of claims which must be rebutted.

Revenue

It has been claimed “racing is in the worse state it has ever been in its 175 year history”.

Here are facts.  The government has already announced removing the betting levy - a 4 percent tax on annual betting profit.  

Last year’s racing bill also enacted a Point of Consumption charge, and the offshore user charge. RITA is already reaching commercial arrangements on the user charges – more revenue.

Once these revenue streams have come into full effect there will be about $25 million in additional revenue for the industry. This isn't just theoretical - the TAB is already ring-fencing betting duty savings for the industry.

Intellectual Property

It has been claimed the new bill is “stealing the crown jewels - intellectual property” from the codes.

This is not correct. What the bill offers is in effect a continuation of the status quo for IP.  The TAB will be negotiating the aggregate IP for the all codes. Fragmenting your IP will cost you money not make you money. No IP has been stolen from anyone.

Governance 

It has been claimed racing needs “its own Magna Carta” and the bill is about “total control by the Minister with Marxist-type bureaucratic regulatory control”

Not correct. Many of the Ministerial functions already exist in current law.  And the bill transfers racing functions to the codes while RITA will no longer exist. 

And concerns about Ministerial functions are misplaced. They can be triggered at the request of a code to help resolve problems, such as racetrack consolidation.

More is being done for this industry over the last 18 months than has been done in decades.

• The industry wanted a review and a change of governance to the NZ Racing Board – it is being provided.
• The industry wanted tax relief measures. It is being provided.
• The industry wanted other revenue sources. It is being provided.
• The industry want to address racetrack consolidation – and the means and mechanism to do so is being provided.
 
While some of you may want to write a racing “Magna Carta” this government seeks to create genuine change.

Those who doubt this should ask themselves the question – “where would the industry be if the status quo was allowed to prevail?”

Dean McKenzie from RITA has been talking to many of you in the industry and he has good information for which you should keep an open mind.

The Government said it will change this industry for the better and we are. 

There is still much work to do, but we are committed to seeing through the reform of the racing industry so that the industry is revitalised, healthy and financially viable. 

On the following issues remember there is a Racing Bill before Parliament with submissions closing on the 11th of February. 

Whether it is Race Fields/Point of Consumption or provision to be made for ‘flow through’ to the codes officials are already working with the Select Committee about addressing this.

Or on the codes needing to have representation on the Board of TAB NZ.  We hear you but surely we don’t want to go back to where things were in 2003.  

We’re looking at ways to ensure that the heart of this industry gains control of its destiny. 

Or on the need for separation of TAB NZ and Government.  

‘An outsourcing decision is a commercial decision in the best interests of the industry’. That’s the claim but if an outsourcing decision ends up in an asset sale where would we have got ourselves? 

However, let’s flip that on its head and consider a caveat to what the Government will not approve i.e. the industry allowed to reach any outsourcing or JV arrangement as long as it is not an asset sale beyond a certain threshold.

Submissions close on the 11th of February.  We’re here to listen and I trust every critic of this legislation has made their submission.

For these reasons, you should remain confident about this great sport.

And we all look forward to contributing to as well as celebrating the future successes of the next generation of Karaka graduates.

Again, enjoy your time at Karaka and good luck to those buying and selling.

It is a pleasure to declare the 2020 National Yearling Sales open.

And see you again next year.

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Partly in response to this I take it.

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Racing industry comes together to protest legislation

by Brian de Lore
Published 24th January 2020

The broadening and noisy furore coming from the racing industry, after getting its head around the implications of Racing Reform Bill No.2, is symptomatic of the current parlous state of racing and breeding in New Zealand.

Racing Minister Winston Peters has been in the job for two-and-a-half years but today, as you read this blog, racing is in the worst state it has been in its 175-year history. No tangible benefits have accrued back to the stakeholders in this Minister’s term of reform despite all the policies, promises, reviews, tax duty repeals, committees, submissions, agencies, industry discussions, board meetings, and now this proposed diabolical legislation.

Saying the industry is worse today than ever before means that it will be worse again tomorrow, and worse again the day after. Today’s stakes money level set on NZRB/RITA borrowings and a $35 million overdraft at the bank is static against a raft of exponentially rising costs which are suffocating owners and squeezing the lifeblood from the business as every day passes.

Need a personal example; here’s one: A syndicate in which I am one of 20 individual five percent owners to race a filly trained in Matamata, formed in November, has just had the fee at the stable increased from $87.50/day to $92.50/day on a current zero potential for a prizemoney increase in the foreseeable future. Everyone in racing is sure to be able to supply a similar story if asked.

On the other hand, it was the late Herbie Dyke who once said, “I don’t know why owners complain about stakes money, 90 percent of them never get any.”

…the racing industry is writhing in pain on the ground after a good 15-year beating…

The racing industry is entitled to be angry. The treatment it’s taken from years of ministerial dysfunction, and a nepotistic government-filled NZRB gravy train created from political appointments is still speeding towards the genocide of racing. And while the racing industry is writhing in pain on the ground after a good 15-year beating, DIA comes along in 2020 and puts the boot in with a document that takes complete control of the three codes as well as stealing the crown jewels (IP).

The detractors will be saying racing has itself to blame because they couldn’t come together in unity and agree on everything for the future. But thoroughbred racing, harness racing, and dog racing are three different sports and are diverse activities. It would be no different than asking rugby union, rugby league and soccer to combine under one board of administration – hell would freeze-over first!

This week I once again tried in vain to get the Minister on the phone again by inviting him to provide readers with a solution to the current item of discontent causing industry apoplexy – the DIA and its Bill. He declined but at least sent a text reply, saying, “I’m speaking at the Karaka Sales. Submissions on the latest Racing Bill close mid-February. They will be listened to, etc..”

The Optimist has been holding the Minister to account for everything promised and not operationalised since he became our Minister of Racing in October 2017. But we need always to remember racing voted for Winston on the back of a solid racing manifesto which amongst many promises said, “an urgent review of the costs of the NZRB.”

…governments are useless at running businesses – take NZ Rail and Kiwibuild as examples

A fundamental promise to address escalating costs in a declining business. It never happened then, or has it happened since which tells you why governments are useless at running businesses – take NZ Rail and Kiwibuild as examples.

Last September The Optimist predicted the NZRB/RITA financial year loss would be $27 million – a prediction mocked by a member of the agency. They were right, I got it wrong; the damage was worse at $30 million and total expenses were $211.3 million – they missed budget by $40 million.

The appointment of John Messara to review the industry was potentially a stroke of genius on the Minister’s behalf, but not to follow through with it and allow all these deviations contained in this latest legislation, is to drop the ball in front of an open try line as stated here in a previous blog –  why that occurred remains a mystery. The reason it happened is less relevant than what the Minister could have been so close to achieving had he and RITA stayed focused on operationalising the Messara Review which was the RITA brief.

When RITA tells racing participants in 2020, it is following the Messara Review; it’s a reasonably loose statement that doesn’t reflect the intent of the Review’s author John Messara. One should carefully read what Messara outlined, and then read this legislation; there’s barely any resemblance, so Messara’s name is being used only as leverage to promote this legislation. That claim is backed-up in Mary Burgess’s blog, Racing Thoughts, entitled, ‘Industry blueprint unrecognisable in Racing Industry Bill.’ Here’s the link:

When appointed, RITA was given Terms of Reference. An excerpt from that paper says: “The Government is committed to reforming the New Zealand racing industry and seeks the scoping up of a detailed plan to operationalise the Messara Report, the ‘Review of the New Zealand Racing Industry’s’ recommendations once approved by Cabinet, to deliver better governance and economic outcomes for the industry.”

Perhaps the Terms of Reference gave RITA room for deviation, but why would they have deviated unless they knew better? The Agency collectively holds limited administrative experience in racing and governmental racing matters compared to Messara who has been internationally awarded (Longine) for his achievements, yet they incorporated changes and overrode and diluted recommendations.

Cabinet: agreed to the overall intent of the Messara Report as providing the best approach to delivering a New Zealand Racing Industry that is financially sustainable, internationally recognised and competitive

In approving RITA’s Interim Report, Cabinet last April used this wording:
“On 15 April 2019, Cabinet:1

  • agreed to the overall intent of the Messara Report as providing the best approach to delivering a New Zealand Racing Industry that is financially sustainable, internationally recognised and competitive.”

When it came to RITA’s Final Report to the Minister which was presented to him by June 30th but not posted on the DIA website until late last year, RITA on the Messara Review’s 17 recommendations was deviating from ‘strongly support the recommendation’ to ‘support the recommendation in principle’ – saying you support something but carrying it through to a conclusion isn’t going to happen.

When MAC became RITA on July 1st 2019, the first thing expected but not executed was a clean-out of the gravy-train but, no, the gravy-train rolls on and the only change seven months hence is that John Allen is gone and replaced by interim CEO Dean McKenzie who, like his predecessor John Allen before him, will be reliant on the advice of an executive team that decided to build the FOB platform and has a proven record of incompetence under the NZRB label – Mckenzie is getting guidance from the same people as Allen, and history tells us it was flawed advice.

When English football managers fail over time, they get the sack. When NZ racing CEO’s fail over time, they stay employed with a pay rise

When English football managers fail over time, they get the sack. When NZ racing CEO’s fail over time, they stay employed and get a second and third chance with a pay rise.

Yesterday I trekked the Karaka Sales grounds, looked at numerous yearling parades, and saw very passionate New Zealand horse people who have devoted their lives to thoroughbred horses, plying their talents and proudly displaying the quality horses they have bred, to an annually diminishing buying bench of trainers and owners from Asia and Australia. These people are the lifeblood of an industry the Minister promised to reform, but the offer of reform has been traded, forgotten, shelved, postponed, reversed or cancelled. It doesn’t matter what you call it, Racing Minister Winston Peter’s hasn’t yet come through, but still has an opportunity to step up to the plate by supporting significant changes to this legislation.

The proposed legislation offers those good people in racing no future and that is the point so far missed by everyone, including and especially a nebulous and nameless DIA. Like any start-up or reform, the igniting flame for a flourishing business is the incentivisation of participants coupled with the potential to attract industry investment. What this legislation says is don’t participate, don’t invest, and go away!  

RITA was a ministerially appointed agency and primarily, RITA works for the Minister. But the problem is Winston Peters’ preoccupation with other governmental duties such as Deputy PM and Foreign Affairs hasn’t allowed him time to devote to racing – no question he’s out of touch and has relied on delegation and his office.  

The Minister’s instructions to RITA in his July Letter of Expectation were: “Work with the Department of Internal Affairs (the Department) to develop the second Racing Reform Bill …

The Minister’s instructions to RITA in his July Letter of Expectation were: “Work with the Department of Internal Affairs (the Department) to develop the second Racing Reform Bill and implement the regulations enabled by the Racing Reform Act 2019.” But in a recent communique to NZ Harness, Dean McKenzie stated: “While RITA was consulted in the development of the Bill, this is the Government’s legislation…”

That statement would suggest RITA has some major issues with the Bill, but in this week’s industry discussions at Awapuni, Invercargill, Cambridge, Karaka, and Pukekohe, Mckenzie has been telling stakeholders that RITA supports between 80 and 90 percent of the contents of the Bill.

On January 10th on the RITA website, Dean McKenzie stated in his Industry Update: “This is a very significant and comprehensive Bill and reflects a determined focus and commitment from this Government to the racing industry. The RITA Board welcomes the Bill and the opportunities it presents for everyone connected to racing in New Zealand.”

No one is capable of supporting this Bill if they have the long-term survival of the racing industry a primary objective. It needs major surgery on top of the fact that it’s a very poorly written document that contains a considerable number of errors in the cross-referencing of clauses.

Submissions for the Bill will close in 18 days time on February 11th, and while the weight of protests needs to be made loud and clear by racing in the most assertive fashion possible, the government process of calling for submissions doesn’t mean the Select Committee will adhere to them. Seventeen months ago the majority of submissions were in favour of the Messara Review, but here we are in January 2020 dealing with a document that says something completely different and undermines the sustainability of the industry.

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17 minutes ago, curious said:

When it came to RITA’s Final Report to the Minister which was presented to him by June 30th but not posted on the DIA website until late last year, RITA on the Messara Review’s 17 recommendations was deviating from ‘strongly support the recommendation’ to ‘support the recommendation in principle’ – saying you support something but carrying it through to a conclusion isn’t going to happen.

17 minutes ago, curious said:
 

When English football managers fail over time, they get the sack. When NZ racing CEO’s fail over time, they stay employed with a pay rise

When English football managers fail over time, they get the sack. When NZ racing CEO’s fail over time, they stay employed and get a second and third chance with a pay rise.

 

Must have had a few gins when he posted some of this!

Edited by curious
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1 hour ago, Freda said:

De Lore or Winston?

De L. I'm pretty sure he means the MAC reports in the first snip. Then there is the repeated/edited lines like the footie manager ones in there twice. Maybe his subbie was on it too.

 

Edited by curious
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Spoke [ finally ] to one who went, this morning.

He conceded that McKenzie appeared concise,  and genuine in his talk.  He [ McKenzie ] doesn't have the oratory skills of J.A,  but thought that he came across well.  That DOESN'T mean that he agreed with all that was spoken about.

 

Edited by Freda
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  • pete unpinned this topic

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