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Question for Mardi/Curious


Freda
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There is a huge misunderstanding about taxation paid by racing to the NZ govt.  

So,  where does this notion come from ?  Did racing EVER pay large amounts to the Govt of the day?

I recall, way back when Dad was a committee member of  the Canterbury Park Trotting Club, in the days before it merged with the New Brighton Trotting Club to become the Metropolitan Trotting Club. 

I must have been around 13 or 14,  I guess,  and we were talking about taxes generally.   In those days, racing paid a turnover tax of 20% [ he said ]  which was not the same as taxation on profit.  I pondered about that for a bit, and announced that that was really unfair.  Dad then told me that racing paid no income tax.   I decided that , after all, it wasn't so unfair after all.

So  the billions that people think were dragged out of racing must have happened before that?

Edited by Freda
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1 hour ago, Freda said:

There is a huge misunderstanding about taxation paid by racing to the NZ govt.  

So,  where does this notion come from ?  Did racing EVER pay large amounts to the Govt of the day?

I recall, way back when Dad was a committee member of  the Canterbury Park Trotting Club, in the days before it merged with the New Brighton Trotting Club to become the Metropolitan Trotting Club. 

I must have been around 13 or 14,  I guess,  and we were talking about taxes generally.   In those days, racing paid a turnover tax of 20% [ he said ]  which was not the same as taxation on profit.  I pondered about that for a bit, and announced that that was really unfair.  Dad then told me that racing paid no income tax.   I decided that , after all, it wasn't so unfair after all.

So  the billions that people think were dragged out of racing must have happened before that?

Hi Freda, I just put up a breakdown on the other site - hadn't seen this post. I have no idea why people think the government is creaming it from the industry. Of course there will be GST and income tax from people like yourself (same as Australia). But NZRB picked up $23m in levies and taxes (for the government) from NZ racing in 2018 (I don't have the breakdown for 2019 as the report stopped providing any detail).

Edited by mardigras
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13 minutes ago, mardigras said:

Hi Freda, I just put up a breakdown on the other site - hadn't seen this post. I have no idea why people think the government is creaming it from the industry. Of course there will be GST and income tax from people like yourself (same as Australia). But NZRB picked up $23m in levies and taxes (for the government) from NZ racing in 2018 (I don't have the breakdown for 2019 as the report stopped providing any detail).

Thanks,  Mardi...I've had a look but the breakdown/report doesn't show anything more than a blank.  I'll have a gander on my phone later.

But my query was really historical.   At some stage, the govt must have garnered plenty [ far, far more than now ]  from racing,   as in the 40's,  50's,  60's.....otherwise. where on earth has this notion come from?

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2 minutes ago, Freda said:

Thanks,  Mardi...I've had a look but the breakdown/report doesn't show anything more than a blank.  I'll have a gander on my phone later.

But my query was really historical.   At some stage, the govt must have garnered plenty [ far, far more than now ]  from racing,   as in the 40's,  50's,  60's.....otherwise. where on earth has this notion come from?

BTW....phone had no problem,  just checked.

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3 minutes ago, Freda said:

Thanks,  Mardi...I've had a look but the breakdown/report doesn't show anything more than a blank.  I'll have a gander on my phone later.

But my query was really historical.   At some stage, the govt must have garnered plenty [ far, far more than now ]  from racing,   as in the 40's,  50's,  60's.....otherwise. where on earth has this notion come from?

Yes, pre fairtax campaign, the betting duty was at a higher rate. So every betting dollar got levied to the government. I can't remember the rate but fairtax brought it down, and subsequent changes are lowering it even further. I think when fairtax came in, for the first year alone, that was a reduction in levies of around $35m.

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Prior to 1995 the duty was 5.5 per cent of turnover - not sure about earlier days. The National Government then reduced that to 20 per cent of betting profit. At the time that amounted to 3.3% turnover whereas casinos were paying 4% of profit, about .5% turnover. In 2005? the fairtax campaign resulted in that being reduced for racing from 20% to 4% profit in line with casinos. Last year's new legislation will remove that altogether over the next couple of years for an additional $13m benefit based on profit at the time and a reduction to zero duty.

So we are pretty much in a a situation shortly where the NZTAB has no duty, no licence fees and pays no income tax. Some still think the industry should be getting more.

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18 hours ago, curious said:

Prior to 1995 the duty was 5.5 per cent of turnover - not sure about earlier days. The National Government then reduced that to 20 per cent of betting profit. At the time that amounted to 3.3% turnover whereas casinos were paying 4% of profit, about .5% turnover. In 2005? the fairtax campaign resulted in that being reduced for racing from 20% to 4% profit in line with casinos. Last year's new legislation will remove that altogether over the next couple of years for an additional $13m benefit based on profit at the time and a reduction to zero duty.

So we are pretty much in a a situation shortly where the NZTAB has no duty, no licence fees and pays no income tax. Some still think the industry should be getting more.

To put this in perspective, based on FY19 figures, that means racing has had $50m+ p.a. of duty relief since 2005 and that will become $65m p.a. once the 2019 duty exemption takes full effect. The TR share of that alone should be enough to re-lay 2 or 3 tracks or build a new Strathayr and add say $20m to stakes. Or they could use it for a year to pay off the new FOB platform so they can write it off. Or maybe they could use some of that to underwrite trialing a reduction in tote takeouts to say 12% for a year or 2. Or, they could continue to waste it and I suppose that is more likely.

Edited by curious
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1 hour ago, curious said:

To put this in perspective, based on FY19 figures, that means racing has had $50m+ p.a. of duty relief since 2005 and that will become $65m p.a. once the 2019 duty exemption takes full effect. The TR share of that alone should be enough to re-lay 2 or 3 tracks or build a new Strathayr and add say $20m to stakes. Or they could use it for a year to pay off the new FOB platform so they can write it off. Or maybe they could use some of that to underwrite trialing a reduction in tote takeouts to say 12% for a year or 2. Or, they could continue to waste it and I suppose that is more likely.

You're a big fan of Strathayr?

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