Opinion / ‘Disingenuous’ Barr dodges failure with the clubs

“This is a government that, like the Sheriff of Nottingham, is unrelenting in its pursuit of taxation at any cost,” writes GWYN REES, CEO of ClubsACT

CHIEF Minister Andrew Barr appears to be providing a form email response to people who contact his office in support of clubs and, interestingly, it details how important clubs are in the Canberra community.

Gwyn

Gwyn Rees.

It is disingenuously attempting to paint a picture of a government supporting clubs. Actions speak louder than words, and the failure of last year’s Public Accounts Committee Inquiry and the support for the destruction of the community club gaming model tell the real story.

One line in particular in this response warrants public challenge. It noteds clubs pay a lower gaming tax rate than hotels and taverns, which also operate electronic gaming machines.

While true, it is quite misleading. The argument ignores the community objectives of clubs and their maintenance of more than 400 hectares of green space for community sporting use.

It ignores the fact that, unlike hotels and taverns, clubs are not for profit. It ignores the fact that during that last reporting period, only two of a potential nine hotels and taverns actually made a community contribution.

The tax line that has been developed leads local residents down the garden path, by suggesting that clubs don’t pay enough tax. It is fallacious, and something I have discussed at length with those who have attempted to argue it.

A notable example of this was put forward by the Chief Minister’s adviser, who had instructed Treasury to divide the number of gaming machines in the ACT by the total tax paid by clubs. Declaring it a matter of fact that clubs pay less tax, the example is flawed because it is not representative of the different thresholds applied in different states.

Despite this misleading information, what is fact is that during the 2014/15 financial year, clubs collectively contributed $33.01 million in gaming tax to the ACT government. Further, if we were to apply the NSW tax rates to the ACT, then clubs here would be nearly $4.4 million better off every year!

Then there’s a payroll-tax argument. While the ACT benefits from a more generous system in principle, the grouped nature of clubs means that most do not benefit from the tax-free thresholds. And despite the Chief Minister’s recent swipe at larger clubs, he actually benefits from them substantially, collecting in excess of $3 million annually from this tax.

In addition to the taxes outlined, ACT clubs are subjected to extraordinarily high water charges, and are not recognised in the same way they are in other jurisdictions. Ainslie Oval, for example, costs about $130,000 a year to irrigate. If it was located in Sydney, it would pay just half this amount! Clubs are among the very few large irrigators in the ACT, and the government receives its dividend from Icon Water as its shareholder. Effectively more government taxes by another name.

Our liquor-licence fees are also the most expensive in Australia. A local sporting club here pays $5186 to operate to midnight, whereas if it were located in NSW this fee would be only $510. Of the just over $3 million recovered in licence fees, Canberra’s 50 clubs contribute $550,000 amongst a mix of 700 licensees – that is to say, clubs hold just seven per cent of the licences but contribute almost 20 per cent of the total fees.

The government argues that the charges reflect the cost to the community of policing and controlling licensed venues. Given the quantum, a person might be led to conclude that a round of golf could be more dangerous than a night out in Kings Cross!

So when government suggests clubs are not paying their fair share, treat this with suspicion.

You only need to cast your eye at your own rates bill to understand that this is a government that, like the Sheriff of Nottingham, is unrelenting in its pursuit of taxation at any cost.

Like ACT home owners, clubs have also seen their rates rise, and collectively we estimate they are now over $2 million annually. The examples of these rises eclipse anything that resembles indexing over the last term of government. In fact, one small club has seen its rates rise from $14,000 to $55,000 in five years, and another from $35,000 to $115,000.

Imagine your local club explaining that it needed to raise your drinks or meal price by 100, 200 or even 300 per cent. It would be a quick recipe for going broke.

So, Mr Barr, mislead if you will but you are reminded that clubs contribute most significantly to this community through various taxes and that is without broader consideration for the $11 million annually in community contributions and support for 1000 community groups.

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