Wednesday, 17 May 2023

Bills

Gambling Taxation Bill 2023

Second reading

Debate resumed.

Melissa HORNE (Williamstown – Minister for Casino, Gaming and Liquor Regulation, Minister for Local Government, Minister for Ports and Freight, Minister for Roads and Road Safety) (18:05): I am really pleased to rise today to speak on the Gambling Taxation Bill 2023, which is the fourth and final legislative instrument required to implement and respond to the recommendations of the Royal Commission into the Casino Operator and Licence. This has been an enormous undertaking, and I thank the Treasurer for his part in holding the casino operator to account and ensuring that the reprehensible behaviour uncovered by the royal commission never happens again.

To say this government has acted swiftly to deliver the recommendations of the Royal Commission into the Casino Operator and Licence is an understatement. Whilst there is more to do to hold the casino to the highest possible standard, I am proud of this government’s progress. When this bill becomes law, 33 out of the 33 recommendations of the royal commission will either be fully implemented or legislated for and awaiting commencement. At the end of the year some of the strongest harm-reduction and anti-money-laundering measures ever implemented will be in place at Crown Melbourne. This includes key recommendations of the royal commission, such as mandatory precommitment via carded play on each and every gaming machine in the casino. This is not only a jurisdictional first but world-leading in its response to both gambling harm and money laundering.

Before I get to the substance of this bill and the important reasons why the government is bringing the casino tax under the framework of the Taxation Administration Act 1997, I would like to take this opportunity to reflect on the findings of the royal commission and the actions that we have taken as a government to address them. Firstly, the royal commission found that Crown Melbourne was unsuitable to hold the Melbourne casino licence as it had engaged in conduct that was illegal, dishonest, unethical and exploitative but that the immediate cancellation of Crown’s licence would cause considerable harm to the Victorian economy and innocent third parties. Approximately 12,000 jobs were at stake.

As a Labor government, our pathway forward was clear. We acted immediately to protect Victorians from the predatory behaviour of the casino and to ensure that the employees of the casino were taken care of under the stringent oversight of the special manager. We recognised that it was our responsibility to ensure that the casino be held to the highest standard of integrity and oversight in order to minimise gambling harm. We decided not only to accept the findings of the royal commission but to in fact go further. The government accepted the royal commission’s findings and acted decisively, delivering nine priority recommendations through the Casino and Gambling Legislation Amendment Act 2021, which established the special manager to oversee and monitor the casino. It had unprecedented powers to oversee Crown, including the power to direct the board, and unfettered access to the casino, its books and its records. This type of corporate oversight has never been seen before in Australian corporate history. We also established the Victorian Gambling and Casino Control Commission, the VGCCC, as the new regulator.

We went beyond the royal commission’s recommendations in three key aspects. Firstly, we provided for the automatic cancellation of Crown Melbourne’s licence at the end of the period of the special manager’s oversight unless the VGCCC is clearly satisfied Crown is suitable to continue to operate the Melbourne casino. We fully repealed the sweetheart deal struck by those opposite that prevented the state from making regulatory changes to reform the casino’s operation without incurring a liability to pay compensation to Crown Melbourne, and we increased the maximum fine the regulator can impose on Crown for a disciplinary action from $1 million to $100 million.

Shortly thereafter we passed the Casino and Liquor Legislation Amendment Act 2022, which strengthened the powers and functions of inspectors, embedded harm minimisation in the core functions and objectives of the VGCCC, expanded grounds for disciplinary action and completed the transition to the VGCCC. The VGCCC, I have got to say, has demonstrated fearless resolve when it comes to holding the industry to account based on its core principles of integrity, safety and fairness. Their record already speaks for itself. It includes $230 million of fines against Crown alone, comprised of two fines totalling $120 million for breaches of the code of conduct for the responsible service of gambling by failing to intervene to prevent gambling harm by allowing customers to gamble for long periods without a break and for failing to comply with the direction of the regulator to take steps to prevent patrons from simulating automatic play when gambling on electronic gaming machines. There was an $80 million fine for allowing patrons to use credit or debit cards to access funds to gamble, from which Crown derived an estimated revenue of more than $32 million. Another $30 million fine was for allowing Crown patrons to use blank cheques to gamble in the casino.

We delivered on 12 more recommendations to prevent money laundering at the casino, minimise gambling-related harm and strengthen corporate ownership and governance arrangements with the passage of the Casino Legislation Amendment (Royal Commission Implementation and Other Matters) Bill 2022. These new laws will make carded play compulsory on all gaming machines and table games at the casino, allowing people to easily keep track of their spending and set fully binding limits for time and money. The use of cash at the casino will be limited to $1000 per 24 hours. Mandatory precommitment, as I mentioned, will come into effect across the casino. All gambling activity must be tracked, and cash will be limited to $1000 per 24 hours for pokies and table games.

This bill, the Gambling Taxation Bill, addresses the royal commission’s determination that Crown Melbourne improperly claimed deductions of its calculations of casino tax payable to the state – or, simply put, they cheated on their taxes. The Royal Commission into the Casino Operator and Licence recommended that casino tax be brought under the administrative framework of the Taxation Administration Act 1997 because of the unusual situation that there is no other financial consequence if casino tax is not paid, even if it is intentionally not paid. Bringing the casino’s taxes under the Taxation Administration Act 1997 will subject it to the extensive provisions dealing with the collection of tax, including the imposition of penalty tax and interest on tax defaults and provisions for record keeping, enabling a tax liability to be properly assessed.

The Taxation Administration Act also creates several criminal offences, including for giving false or misleading information to tax officers, for deliberately omitting information to a tax officer and for tax evasion. These penalties are significant and may apply to a body corporate taxpayer and its officers. Transferring the casino tax provisions to a dedicated gambling taxation act which is subject to the Taxation Administration Act will align the legal framework and the administration of the casino taxes with other major state taxes. Further, this bill will align the tax rate for Crown’s electronic gaming machines to match rates applying to club venue operators. This will see Crown pay its fair share of gambling taxes. Again, I would like to thank the Treasurer for his carriage of this bill which responds to the recommendations of the royal commission and acquits the final recommendation from that important work that was carried out.

Danny O’BRIEN (Gippsland South) (18:14): I am pleased to rise and get the jump on the Gambling Taxation Bill 2023 and speak a little bit about this piece of legislation, which is effectively the second tranche of legislation in relation to the racing industry and betting and gaming arrangements that we have had this week but also has some significant changes, as the minister just outlined, to the casino taxation arrangements – the final tranche of the recommendations coming from the Royal Commission into the Casino Operator and Licence headed by Ray Finkelstein.

I think it is important to just go back to that a little bit. The royal commission actually came about as a result of the Bergin inquiry in New South Wales, which found out more about what was going on in Victoria than the former Victorian Commission for Gambling and Liquor Regulation, the regulator here in this state, under the watch of the current Labor government, where the casino had been engaging in incredibly bad behaviour. Indeed I will quote from the royal commission. Commissioner Finkelstein actually said:

… for many years Crown Melbourne had engaged in conduct that is, in a word, disgraceful. This is a convenient shorthand for describing conduct that was variously illegal, dishonest, unethical and exploitative.

So when the minister talks about cosy deals done with this side of Parliament, we can refer to what was going on at the casino under the supposed watch of the current Andrews Labor government. It took a New South Wales inquiry for the information to come to light about what was actually going on at the casino. So it is a bit disingenuous for the minister to talk about what happened in the 1990s when the Kennett government inherited, of course, the decision to introduce a casino from the Kirner government, when in fact there was so much, in the words of Commissioner Finkelstein, ‘illegal, dishonest, unethical and exploitative’ action going on by the casino under this government’s watch.

I think we have had three previous tranches of legislation to implement the royal commission’s recommendations. This bill implements the final recommendation, which does a couple of things. Basically it introduces new casino taxation arrangements so that, rather than being administered by the Victorian Gambling and Casino Control Commission, the casino’s tax will now be under the purview of the commissioner of state revenue, so the State Revenue Office. It also introduces an increase in the casino tax. The gaming machine tax on electronic gaming machines operated by Crown will be increased so the taxation rate will be the same as EGMs operated by club venues. It is interesting to note, of course, in the context of the matter of public importance debate we have just had on the government’s mismanagement of the economy and the budget, that this will net the government an expected $30 million additional revenue a year. It is small change, given the size of the deficit and debt that we have got in this state, but every little bit helps, as I am sure the Treasurer is saying. I certainly do not disagree with the move to increase that tax on the casino’s EGMs.

There are some technical changes as well, with the casino taxation arrangements being extended to apply under the Taxation Administration Act 1997 and the consolidation of some of the other various gambling taxes. That is agreed, I think, by most. I certainly thank my colleagues the member for Sandringham and the member for Gippsland East. We have all coordinated the opposition’s response on these two bills, given the interrelationship between them. Certainly the member for Sandringham has coverage of this legislation as the Shadow Treasurer, but it really is largely a casino and gaming bill. Not surprisingly, that is why the minister has spoken so early in the piece for the government members as well.

The other part of it that I touched on is the increase in the point-of-consumption tax (POCT). When I say this is part of a double act this week in Parliament, it really is the second part of the changes for the racing industry here in Victoria. This bill will increase the point-of-consumption tax from 10 per cent to 15 per cent. I am sure the minister at the table, the Minister for Racing, is pretty stoked about that. He has had a win for his sector, because they are pretty happy; I am not sure that he is going to get Christmas cards from various of his colleagues. This is an increase effectively to offset the expected loss of revenue that will come from the wagering and betting licence, which was the subject of the Gambling Regulation Amendment Bill 2023 that we debated yesterday. That obviously has changed in the context of the increase in corporate bookies and online gambling – the fact that Victoria no longer has the ability, effectively, to operate a monopoly wagering and betting licence to the extent that it once did under the old TAB. There is much competition for the punter’s dollar, and that means that the joint venture as it has been up until now between Tabcorp and the Victorian racing industry is not likely to be as lucrative as it was even at the last iteration of the licence issued in 2011.

What the government is proposing here – and what the Minister for Racing is grinning about like a Cheshire cat – is an increase in the point-of-consumption tax to offset that, with an agreement between the government and the industry that 4 per cent of that 5 per cent will go to the racing industry. Therefore in total, from the new rate of 15 per cent point-of-consumption tax, 7.5 per cent will go to the racing industry. That is estimated by the Department of Treasury and Finance to deliver, I think, an annual figure in the next three or four years of about $119 million to $120 million, subject of course to turnover, but that will give the industry some certainty. I know the member for Sandringham and the member for Gippsland East – like, I am sure, the government – have made it pretty clear that is a good deal for the industry, and it should not be coming back to the taxpayer for support. It is important for the industry to make sure that it grows its own revenues and does its best to deliver a solid future on the back of these arrangements now being put in place by the government.

Whilst 1 per cent of the tax is going to the Treasurer – he will be trousering that, but it is to the people of Victoria – we suspect that that 1 per cent may end up going back to the industry as well given that the government has a secret MOU with the industry.

Anthony Carbines interjected.

Danny O’BRIEN: You can laugh, Minister for Racing, but it is secret because no-one has seen it other than the government and the industry. I am sure there is nothing nefarious in it – I am sure – but a bit of transparency might be nice. We understand that that MOU guarantees about 90 per cent of the previous funding that the industry received to the industry going forward, and so it may well be, subject to what the government does with the licence, that that money will also end up going to the industry.

I just want to touch briefly on the issue that I raised yesterday with respect to the licence, which is absolutely relevant to the increase in the POCT, and that is that the government still has not addressed the issue of the intellectual property currently held by the joint venture in Tabcorp. This consists of thousands and thousands of customers in a database who are customers of the current joint venture. There is debate. Certainly those seeking to win the tender for the new licence believe that should be made available to them, and if it is, that will no doubt going to make the licence much more valuable. I invited the Minister for Racing at the table, who followed me in speaking yesterday, to give some clarity on the IP issue, and I note that he steadfastly avoided it – he did not want to go there.

We are not going to go there from this side because we do not have access to the government’s legal advice as to what the intellectual property rights might be in this case, but we do believe that the government should be providing some clarity on that to the market. We have already seen one major bidder for the licence announce it is pulling out because it does not have any clarity on whether that IP is going to go with the licence, and there is the possibility that there will be no bidders. There have been rumours swirling around that a deal has already been done with Tabcorp and that it will simply get the licence rolled over. The government really should be explaining what is going on with the IP.

Anyway, this legislation sets up an opportunity for the racing industry and it implements some good measures on the casino. I look forward to the debate over the next couple of days.

Anthony CARBINES (Ivanhoe – Minister for Police, Minister for Crime Prevention, Minister for Racing) (18:24): I really am pleased to talk on the Gambling Taxation Bill 2023. In particular I just want to touch and recap on a couple of key elements of the bill: increasing the wagering and betting tax rate from 10 to 15 per cent from 1 July 2024 and the transfer of the administration of the casino tax from the Victorian Gambling and Casino Control Commission to the commissioner of state revenue from 1 July 2023. There are some other elements, but I particularly want to stick to those that relate to the racing industry, as touched on by the previous speaker. Perhaps the key element that this bill does deliver on is vital long-term certainty to the Victorian racing industry. Why does that matter? When you have got a $4.7 billion industry of economic development and economic return to the state – some 35,000 full-time jobs across the state – the Victorian racing industry is not only a pre-eminent jurisdiction here in Victoria but a critical industry that supports jobs and economic growth right across the state.

I want to draw, I suppose, a few different elements together. We did touch yesterday, as the previous speaker did, on the Gambling Regulation Amendment Bill 2023. The reason that was particularly important was because one of the elements was to remove the ‘no less favourable’ clause, which allows licences to be issued and negotiated on behalf of the government. But while it takes the handbrake off around the ongoing funding arrangements for the racing industry, we have been able to address those matters in part through this bill, the Gambling Taxation Bill 2023.

The only other elements that I did want to touch on and did not get a chance to yesterday are of course the matters that we went to yesterday when we were talking about the Gambling Regulation Amendment Bill 2023. The matters in regard to the licences are under the purview of the Minister for Casino, Gaming and Liquor Regulation, and I make it very clear that I will not be commenting on those matters. I will not be speaking to those matters, because naturally while the racing industry’s funding in part historically and through the joint venture has come from that licence, the engagement in that process is for the gaming minister. That is appropriate, and she will address those matters in due course.

Bringing us back to the Gambling Taxation Bill, I think it is really important that we go to a couple of the key elements of what is important here to Racing Victoria, which issued a statement from the Victorian racing industry (VRI). We should talk about our key stakeholders. They make a significant contribution to leadership in the racing industry. On 2 May there was a statement from the Victorian racing industry on the Victorian point-of-consumption tax changes:

The Victorian Racing Industry (VRI), welcomes the Victorian Government’s proposed changes to the Victorian Point of Consumption Tax … arrangements which will result in an increase to the VRI’s share of ongoing funding derived from the POCT collected, providing important long-term certainty for the VRI.

Now, as we know, wagering taxes are in line with other states. That is really important. We want to know that the racing industry has a framework to ensure its long term sustainability, and the way in which we do that is we increase, in this bill, the wagering and betting tax to 15 per cent from 10 per cent. That brings us into line with other states. To go back to the statement from the VRI, the racing industry, it states:

This increase will bring Victoria’s POCT into line with New South Wales, Western Australia, South Australia and Tasmania at 15% …

Queensland of course is up at around 20 per cent.

The VRI welcomes the Victorian Government’s ongoing commitment to the preservation of a growing and viable racing industry and Victoria’s position as the pre-eminent racing and events jurisdiction in the country.

These are really critical changes that are outlined in this bill, and they go in tandem with the changes that we talked through in the amendment bill just yesterday.

On the work that has also been done, I want to just touch on the importance of the racing industry and why it has been critical. I want to thank our partners and our stakeholders on the work that has been done to reach an MOU with the industry – an MOU that makes very clear the government’s guaranteed support over effectively the 10-year life of this MOU and the broader funding agreement – that provides certainty around the industry and its funding over the next decade. That is critical for the racing industry. I saw that evidence firsthand when I was at the Warrnambool races just recently, of the relief from the industry and participants, people who rely on our industry for their employment – as I said earlier, some 35,000 full-time jobs right across the state in so many industries. We saw that also when you have something like 14,000 people at the Warrnambool carnival, as we had just the other week.

In every town on the way to Warrnambool and beyond, down to Port Fairy and on the way back, everyone is clipping the ticket – every business, every accommodation, food and beverage outlets, clothes, fashion and the like – we have seen an absolute reliance on the Surf Coast, or in broad terms the South-West Coast. We saw a $10 million economic impact and benefit across the South-West Coast from that carnival alone, with 7000 people on each of the first two days – 14,000 on Cup Day. These things make a big difference in regional communities, and we see the same when we come back down to Melbourne. We have seen that: a good example of the racing industry and the role that it plays in economic development in our community. The Spring Racing Carnival last year contributed over $420 million to the Victorian economy, the single biggest economic contribution of any annual sporting event in Australia, bigger than the grand prix, bigger than the Australian Open. The Spring Racing Carnival contributed $420 million to the Victorian economy.

These matters are critical. We saw them again when I was with the member for Wendouree at Ballarat Turf Club just last week, where I was able to pick up on some colleagues’ announcements in relation to the Minister for Industry and Innovation. I was also there with the member for Ripon. We were able to talk about how Jobs Victoria is partnering with the Ballarat Turf Club to deliver 100 roles at Ballarat-based stables and with Skillinvest to deliver a further 100 roles to regional Victoria and metropolitan Melbourne in the racing industry. We need to be able to find a labour force and make sure there are career pathways right across regional Victoria in the racing industry. Ballarat itself already sustains some 700 full-time jobs in the racing industry in Ballarat alone. That is really significant. The member for Cranbourne – we have spent a lot of time down there – understands and knows how many families in her electorate play a key and critical role at the Cranbourne racing club, one of the biggest training clubs in the state.

When you piece it all together in terms of the bills that we have been dealing with over the past couple of days, with the Gambling Regulation Amendment Bill 2023 from yesterday we deal with the new licensing arrangements and removing the ‘no less favourable’ clause, but we are able to do that with the support of the industry by in part what we see in this bill before the house today, the Gambling Taxation Bill 2023, where we lift the point-of-consumption tax to 15 per cent, bringing us into line with other states but also making sure that we lift the contribution that goes to the racing industry from the point-of-consumption tax up to 7.5 per cent of that 15 – half. The principle of that is very significant. Why shouldn’t it be that the racing industry collects a financial benefit, funding and tax with which it then can generate income to continue to grow and sustain jobs, the industry and the product and its quality? Why not do that from its product? That is much more effective than taking those funds from other services that are vital in the Victorian community. So it generates a motivation as well for the racing industry to continue to offer quality services and a quality product with integrity, with the quality of the product across Victoria. What that also means is that wagering sustains itself and people feel confident engaging, as they do, in betting and wagering on the Victorian racing industry and its product. That is where the tax in a large part is generated from, and the revenue goes back to the industry that it is generating the tax from – a very significant industry in our state.

If I did not mention it earlier, I want to also touch on some of the very significant elements in regional Victoria, because I just think it cannot be lost on people – and I know it is very well understood by our regional MPs – that $1.17 billion of that economic activity is generated in regional Victoria along with 9000 full-time equivalent jobs. It is not just those 9000 jobs but also the families that rely on those who work in our racing industry. We also see it through the Victorian government’s $72 million Victorian Racing Industry Fund. Of that fund a large portion is put towards capital and infrastructure projects. That is about upgrading our services and facilities around Victoria. That creates jobs for those workers in the construction industry in a particular sense but also so many community organisations that use those racing facilities for so many other events that are significant in their lives. Racing clubs are at the heart of communities. This bill goes a very long way to making sure that in the racing industry Victoria continues to be the pre-eminent jurisdiction and that it is well funded into the future.

Tim BULL (Gippsland East) (18:34): It is a pleasure to rise and speak on the Gambling Taxation Bill 2023, and as the member for Gippsland South pointed out, some elements of it relate to the casino tax arrangements. It is the elements that relate to the point-of-consumption tax that I wish to make my contribution on, as it is the revenue stream that funds a large component of our fantastic racing industry here in Victoria.

Now, I have sung the praises of this industry many, many times, and I will not fill in my 10 minutes like the minister did quoting a heap of statistics about the economic benefits of our racing industry to this great state because I have got them well on the record many, many times before. But I will say that this is an industry that should be celebrated and not dismantled, as MPs from some of the other parties would like to do – some sit up here and in the other place with a different colour of green on. It is a great industry. We should look after it and we should nurture it. As the minister commented on in his contribution, you only had to be at Warrnambool 10 days ago – or two weeks ago – to see what an extraordinary contribution that makes to our community, and I just hope that we can get this bill through. I should say we will be not opposing this bill in the chamber but will be reserving our position on it in the upper house. We just hope that it can pass through with some common sense, without these amendments being raised by others.

Now, we do believe that the entire amount of the increase in the point-of-consumption tax should go to the racing industry because it is a tax on punters, and the fact that the government is clipping the ticket on the way through is certainly cause for some concern. I also want to mention that the reason for that is the great uncertainty that we have in relation to the wagering licence. I made this point yesterday that the industry has been quite lavish, I guess you could say, in its praise of this agreement – that 1 per cent or approximately $30 million has been taken out of this 5 per cent increase to go into general revenue – and that the racing industry cannot really come knocking back on the door when that competition that has been going on for a couple of years with New South Wales takes its next step. And we just hope that those from over the border do not have another prize money increase. I think that nationwide or particularly in New South Wales and Victoria considerable amounts and improvements have been invested into the prize money of the racing industry, and we do not need to have that ongoing competition.

This will deliver on forecast an additional $119 million per year to the sector – well, let us round it off and say $120 million. And we certainly acknowledge – and this is the reason why we are not opposing in this chamber – that it gives the industry some certainty to move forward. But one point I want to make is when this government talks about 1 per cent going into general revenue and it talks about the 1 per cent going to hospitals and schools and roads, we should not be kidding ourselves on that. If there is any money left over after the licensing agreement, this will be going into servicing this $30 billion in cost overruns we have, so this is why the government is clipping the ticket on the way through – not to put it into roads. It will go into that $30 billion cost overrun or the $10 million we are paying a day on interest. $10 million a day – can you imagine that? $10 million a day – it is just incredible that the state has got itself into that position. So it is laughable that we have people talking about how this money will be going back into roads and this money will be going back into hospitals. That will not be the case.

The other point that I just want to make is how we do not know where the wagering licence is going to end up. Because of the growth in corporate bookmakers and the drift of punters going from our tote over to corporate bookies, we are clearly not going to get the same level of return out of the licence or anywhere near it. So this 1 per cent or approximately $30 million we are told – and the minister at the table just mentioned that there is an MOU that has been created, which we have not seen yet – that is going to top up the industry to 90 per cent of the previous level of supports that were there. Now, if we are not going to get as much for the licence this time around, I am sure this 1 per cent has been put aside by the Treasurer as insurance for if he has to top up the industry for the shortfall, dependent on what they get for the wagering licence. So with all this talk about this going to the people of Victoria and this talk about this going into roads and hospitals, we will be watching very closely where that ends up with the wagering licence and whether it indeed does end up back with the industry and go to the people of Victoria as those on the other side are talking about. We certainly know it will be going into debt if it ends up that the wagering licence gets what is anticipated.

The last time the point-of-consumption tax increased we know that it all went to the racing industry. The entire increase went to the racing industry. It would have been good if that had occurred this time around, but we certainly understand that this 15 per cent point-of-consumption tax with 7.5 per cent going to the industry does give us some parity with New South Wales. I certainly expect and appreciate that that is the case. The reason I think it will ultimately go back to the industry is that you only have to look at recent history and the way this government botched the poker machines sales. What a disastrous disgrace that was; they completely botched that. I mentioned in my contribution yesterday that there are a number of ways that they can maximise the wagering licence. I mentioned too in my speech yesterday that Racing Victoria and the industry have got plenty of ways that the licence can be maximised, and I just hope that the minister responsible gets that right and makes sure that they absolutely get maximum dollars out of that licence.

We will certainly watch with interest to see how all this plays out. Let us hope that, as I mentioned earlier, our colleagues from over the border do not continue this prize money increase. They have attacked Victorian racing to a degree on two fronts – with this prize money battle that is ongoing but also with the invasion of our spring carnival with race dates and pop-up races. For the sake of the racing industry in this country we have got to work together. We have got to be able to support this industry and have a more national approach, rather than the level of state-based parochialism that we have seen in the past. There are other ways. And why I said before that I do not want to see the industry come back cap in hand if New South Wales increase their prize money again is that it should not be a prize money battle that determines whether you have got the best racing state in the country. There are plenty of other ways that you can continue to have this state as the premium racing venue in Australia; it is not wholly and solely all about prize money.

We will be meeting later this week with the Victorian Bookmakers Association in relation to some concerns that they have raised, and there will be other stakeholders we will be meeting with as this bill progresses between the two chambers. We certainly look forward to having those discussions, and it is for that reason that we have reserved our right on our position in the Legislative Council when this bill comes forward. But we do realise that the racing industry needs funding certainty. They should have had this well in place by now to give them that certainty, and that is why we are not opposing this in the Assembly. But I would hope that if we come forth with some commonsense amendments for the betterment of the racing industry more generally for the upper house, we can have those mature discussions with the government to indeed get them passed.

The Greens members I can see on this list here to speak probably will not be up until tomorrow. I am sure the Minister for Racing will join me in hoping that the Greens see that this funding deal secures the future of racing in Victoria. It provides the security that our racing industry needs as a major employer in the state. Let us hope we do not get hauled in here at 5 o’clock on Thursday night having to consider some silly amendments. But it might be one of the rare times, Minister, when we have a decision and a division and we are both on the same side. We do not win many on this side, so it would be good if we could get that over the line, should that eventuate. But I hope it does not, and I hope the Greens can understand that this is a way forward. It does provide security to the racing industry. I hope that when they do stand up they recognise that and they do recognise what a fantastic industry we have in this great state.

Luba GRIGOROVITCH (Kororoit) (18:44): I must say I am a little bamboozled by the member for Gippsland East. On the one hand you are for the tax increase, on the other hand you are not. On the one hand you think the money is going to come back into the industry, on the other hand you are confident it will not. On the one hand you guys are going to support the bill, but then in the other place you are not. So I am very, very bamboozled.

Members interjecting.

Luba GRIGOROVITCH: That was what I heard sitting back here, but maybe I misunderstood, so we will maybe have a chat later or go back and look at Hansard. Anyway, I do rise to speak about the Gambling Taxation Bill 2023. As the Minister for Racing very neatly said before, there is a nice nuance between today’s bill and the Gambling Regulation Amendment Bill 2023 that was put yesterday, which I also spoke to. I spoke in this place yesterday on the Gambling Regulation Amendment Bill 2023, and I did so proudly. Some of you were in the chamber at the time when I spoke and told this story, but for those of you that were not I want to let you know I was honoured to be elected to the board of the Victorian Responsible Gambling Foundation, the VRGF, two weeks ago in a joint sitting. We had our first board meeting on Friday just passed, and I am also joined on the board by the member for Shepparton Kim O’Keeffe and the member for Malvern Michael O’Brien.

The Victorian Responsible Gambling Foundation is a statutory authority created by the Victorian Parliament specifically to address the challenge of gambling harm in the Victorian community. It funds research and other activities that add to the knowledge and understanding of gambling harm. It works with partners and communities across Victoria to inform people about the risks of gambling and to provide support to those who need it, including people who are affected by somebody else’s gambling. It is a privilege for me to be on the foundation’s board, and I very much look forward to advocating to the best of my ability. Anyone, including family or friends, who is experiencing any harm from gambling should reach out to the VRGF. Problem gambling or gambling addiction is a blight on our community. Its social costs and impacts are enormous, and it is simply devastating. As we know, it tears people and families apart.

I spoke yesterday in this house about my firsthand experiences with this. The community of Kororoit, which I represent, is a diverse community. It encompasses two local government areas, Brimbank City Council and also Melton City Council. Whilst Brimbank has the highest losses to gambling of any local government in Victoria, both LGAs in my electorate are ranked in the top 15, a stat that no LGA is proud of. The huge amount of money being lost to these poker machines every day is terrible, and it is impacting our community. It is a social catastrophe. Brimbank LGA’s total loss to electronic gaming machines for the 2021–22 financial year was more than $128 million, while Melton LGA’s losses were more than $68 million. The Brimbank LGA’s total losses to EGMs for March 2023 alone amounted to more than $14 million, while for the Melton LGA the losses for March were more than $7 million. Urgent action to tackle problem gambling in my electorate is needed now.

I am however happy to note that the Andrews Labor government has introduced a new electronic gaming machine surrender scheme. This scheme will allow clubs and RSLs to give back previously purchased electronic gaming machine entitlements that they cannot use due to not meeting the requirements, with the remaining debts to be wiped. I hope that this scheme will be taken up widely and help reduce the number of gaming machines in Kororoit. I hope that we will see the gambling industry become much more strongly regulated and problem gambling tackled with all the weapons we have at our disposal. I will have much more to say about this issue during my term.

The Gambling Taxation Bill before us today relates to the casino side of gambling. It responds to the recommendations of the Royal Commission into the Casino Operator and Licence, and it is about strengthening oversight of Crown. The royal commission was established in February 2021 to inquire into the report on the sustainability of Crown Melbourne to hold its casino licence, and I note that it is only 2023, so I want to thank and congratulate the Minister for Casino, Gaming and Liquor Regulation for her swift action. This followed serious findings after February 2021 against Crown by the New South Wales Independent Commission against Corruption. I understand that with the passage of this bill we will have the final of the 33 recommendations of the royal commission either fully implemented or legislated and awaiting commencement. I note that one of the implementations of the commission’s recommendations led to the establishment of a data committee led by the VRGF that oversees data collection in use from the casino, which will be used to monitor and protect vulnerable people from gambling harm.

Currently casino taxes are paid by casino operator Crown Melbourne in accordance with a management agreement between the operator and the state. Under the management agreement, casino tax is imposed on the casino operator’s gaming revenue relating to table games and electronic gaming machines. The casino operator also pays a monthly community benefit levy on its total gaming revenue, and the casino operator is liable for additional casino taxes in respect to a financial year. Disgustingly, the royal commission determined that Crown Melbourne improperly claimed deductions in the calculation of its casino tax payable. This was under the management agreement, resulting in underpayments to the state since at least 2012. The royal commission report noted the unusual situation that there is no other financial consequence if casino tax is not paid, even if it is intentionally not paid, due to a loophole of the existing legislation not applying to tax payable under the management agreement. The bill rectifies this by transferring the casino taxation provisions into a new act, called the Gambling Taxation Act, which will be subject to the Taxation Administration Act 1997.

Administration and collection of casino tax will transfer to the commissioner of state revenue from the State Revenue Office while all other regulatory functions relating to the casino will remain with the Victorian Gambling and Casino Control Commission under the act. The casino operator will be required to lodge returns and pay casino taxes monthly to the commissioner. The State Revenue Office is well placed to provide the strongest level of oversight in relation to Crown’s tax affairs and has the capacity to conduct rigorous compliance, including the ability to impose taxation penalties. The Victorian Gambling and Casino Control Commission, or VGCCC, is the strongest regulator in the country, and it will continue to have responsibility for other regulatory functions in relation to the casino licensee.

The VGCCC now has a dedicated casino division and regulatory function which oversees operations 24 hours a day. The commission will be there if Crown decides to break the law, and it has the power and authority to hold it to account. The Andrews Labor government’s Casino and Gambling Legislation Amendment Act 2021 increased the maximum fine the regulator can impose on Crown for disciplinary action from $1 million to $100 million, and the VGCCC has already used its new powers to fine Crown a total of $200 million since last year for breaching its obligations, including for the illegal transfer of funds and for consistently failing to intervene to protect customers from gambling harm.

Mandatory precommitment via carded play will also come into effect across the casino. This means that all gambling activity must be tracked, and cash will be limited to $1000 per 24 hours for pokies and table games. Finally, the bill implements an increase in the rate of wagering and betting tax from 10 per cent to 15 per cent from 1 July 2024. As mentioned on a number of occasions by a number of members, this will bring us into alignment with New South Wales and most other states and territories around the country.

The bill also legislates to align the tax rate for Crown’s electronic gaming machines to match the rates applying to club venue operators. This initiative will see Crown pay its fair share of gambling tax, which will benefit all Victorians. The change will increase tax revenue without increasing consumers’ gambling expenditure. It will improve equity by ensuring that large gambling organisations will now be taxed at rates equivalent to those applicable to smaller not-for-profit, community-based venues, something which I believe is well overdue. I am pleased that the Andrews government has also gone beyond the royal commission’s recommendations with the laws that will automatically cancel Crown’s licence unless the regulator is clearly satisfied that Crown is suitable to continue operating Melbourne’s casino. Crown is now under new ownership, but the onus is nonetheless still on Crown to clearly demonstrate why its licence should not be cancelled by the regulator. There is much, much more to be done in this space, but I commend the bill to the Assembly.

David SOUTHWICK (Caulfield) (18:54): I rise to make some comments on the Gambling Taxation Bill 2023 – two main provisions in this. Firstly, we see the changes for the way the casino operator licence now should be operating after the failures we have seen through the royal commission back in 2021. I want to commend the work of Commissioner Finkelstein on that review. And let us remind this chamber and this government that it was New South Wales that found the mess, and New South Wales actually then relayed the problems of Crown Casino to ensure that finally, after it was revealed by the New South Wales commission, something would be done. We are now in 2023 getting some of these things – long overdue, but importantly – fixed.

The increase of money is very important – $30 million in terms of the increase in the pokie machines. That will hopefully be going back into important things like schools, hospitals, roads and other things that need to be done. We know that the government is going to be absolutely skint for cash when it comes to the budget next week, so every dollar is going to help. If we have got to raise that through gambling, then so be it, because we know that we desperately need basic services to be funded.

The other part, if I could just briefly mention it, is that particularly when it comes to the changes in the consumption levy, there is an increase in that consumption levy by 5 per cent, from 10 to 15 per cent, 4 per cent of which is going into racing and another per cent, I believe, into consolidated revenue – although we still do not have the full details.

What we have here is $119 million into racing. Can I say, having Caulfield Racecourse, it is a great facility in desperate need of an upgrade. We have been talking about this for a long time. We had the government supporting a big, bold vision of $570 million to upgrade the middle; for sports facilities, recreation, a whole range of things, we are still waiting. There has not been one dollar from the Andrews Labor government when it comes to upgrading the middle. We have got a new trust. The previous minister for the environment, the current Minister for Energy and Resources, was up and about cutting ribbons and talking up what we could have in the middle of the racecourse. We have one of the lowest amounts of open space in the state and are desperately in need of recreation and sporting facilities, and we are still waiting. We have some funds here. I would hope as part of that, as part of the budget next week, that we would see the Caulfield Racecourse Reserve upgraded. We desperately need it. No more talk – let us get some action.

I understand also there has been some negotiation of the rental arrangement between the Caulfield Racecourse and the trust which funds the middle of the racecourse. I am not sure where that is at. I would ask the government to certainly come clean as to where that is, because at the moment that is the only funding that is available for the trust. I am told that if the Caulfield Racecourse Reserve Trust does not get the funds that it desperately needs, it will literally have to turn the lights off and lock the door, because the Caulfield Racecourse Reserve Trust has run out of money.

So while we are talking up certainly racing, while we are talking up the idea that gambling and racing are important and an integral part in terms of what they do within our community – with industry, with jobs, with a whole range of things – let us not forget for 1 minute about how we can take these wonderful facilities which are in the middle of these racecourses and turn them into public open space. That is what it is: Crown land, public open space. So we can have racing on the outside – the jobs and industry and everything else that it benefits – and we should also look at what that does in the middle of these racecourses. This government need to actually get off their hands and support it with some sort of funding.

We are talking about money here. We are talking about money going back into racing. Let us make sure that when we talk about that, we talk about racetracks. I know the Caulfield Racecourse themselves have put half the $570 million to do the outside in terms of what is involved in racing. The government now needs to come clean with their fair share and stump up the cash to do the middle. It is a partnership. We often talk about partnerships. It is time for the Andrews Labor government to actually stump up the cash that the Caulfield Racecourse Reserve desperately needs.

Mathew HILAKARI (Point Cook) (18:59): I rise tonight – and I look forward to rising tomorrow on the Gambling Taxation Bill 2023.

Business interrupted under sessional orders.