AT least we now know the excuse for the delay with Future Gaming Markets reform.
Minister Michael Ferguson in Talking Point said the release of the reform package followed “an extensive body of work, with licence fees and tax rates that apply for Far North Queensland casinos (a comparable market) used as a benchmark” (“Delivering best policy on gaming,” July 9).
It might be a coincidence, but the concept of this benchmark to justify low tax rates for casinos was first floated by Federal Hotels in December 2016 and again jointly with the Tasmanian Hospitality Association in 2017. The nature of the extensive body of work undertaken since is not evident. Nothing has changed.
There are three principal reasons why governments fiddle with tax rates and tax concessions. Firstly to raise more revenue or hand some back if they’ve got too much. Secondly to encourage activity if desirable, or to discourage if deemed undesirable. And thirdly as a reward for services or deeds, past, present or future.
Clearly the first reason does not apply in this instance.
The government has tried to pretend the second reason is why the North Queensland benchmark is being adopted. Yet there is no sound public policy basis why casinos in regional areas currently need assistance. The benchmark rationale is a cut-and-paste from the Handbook of Self Interest. We don’t need to attract more capital for new casinos packed with electronic gaming machines as they’re prohibited. Tourists don’t come to Tassie to play the pokies. Even if they did, the tax rate is irrelevant. “Let’s go to Tassie ’cos the EGM rates are lower” is not a marketing slogan you’re likely to hear. It’s the locals who play casino EGMs. Any concessions to Federal Hotels simply gives them an unfair advantage over other accommodation providers.
Which leaves us with the third reason for granting a tax concession, namely an ex-gratia reward.