Liquor And Registered Clubs Legislation Amendment (Community Partnership) Bill

About this Item
SpeakersFace Mr Jack
BusinessBill, First Reading, Second Reading


Suspension of standing orders agreed to.

Bill introduced and read a first time.
Second Reading

Mr FACE (Charlestown - Minister for Gaming and Racing, and Minister Assisting the Premier on Hunter Development) [7.50 p.m.]: I move:
      That this bill be now read a second time.

This bill contains amendments to the Registered Clubs Act 1976 and the Liquor Act 1982. The amendments will give effect to the community partnership enhancement package of reforms announced by the Treasurer and me on 20 February this year. The package is the product of an extensive and exhaustive consultative process undertaken by the Government with representatives from both the club and hotel industries over the past several months. The package of reforms will deliver significant tax relief for clubs; greater certainty for both clubs and hotels with the freezing of rates for club and hotel gaming machine duty until 1 February 2001; a co-ordinated and systematic approach to dealing with problem gambling to be developed and funded by the registered clubs themselves - a further major step in the right direction for this State - and potential benefits for the soon to be privatised TAB Limited and smaller hotels, with the granting of an exclusive licence to enable the TAB - either alone or in joint venture with the hotels’ peak industry body in this State - to take a proprietary role in both stand-alone and linked gaming machines in hotels, should those individual hotels so choose.

This is a good package for all those concerned - clubs, hotels, TAB Limited, and in particular for the taxpayers of this State. The amendments will provide gaming machine venues with greater flexibility and certainty. They will also ensure that the single largest operator of commercial gambling activities in this State - the club industry - itself puts concrete measures in place to directly and effectively deal with the harmful effects of gambling and promote the responsible service of gambling. As part of the community partnership enhancement package this bill provides for a number of important benefits for clubs, hotels and TAB Limited.

For clubs it will provide tax relief in the form of a reduction in the top rate of tax applicable to profits in excess of $1 million, from the current 30 per cent to 26.25 per cent, with the tax on club gaming machine profits of between $200,000 and $1 million to be reduced from 22.5 per cent to 20 per cent. These changes will be backdated to 1 February 1998. This will provide a significant tax break for the hundreds of medium to large clubs in New South Wales. The tax-free threshold of $100,000 - introduced by this Government in 1997 - remains, with the tax rate applicable to gaming machine profits over $100,000 but under $200,000 also to remain unchanged at 1 per cent. This will be of significant benefit for those smaller clubs, namely bowling and golf clubs and small ethnic clubs.

For the larger clubs, this community partnership bill also provides for an additional allowance of up to 1.5 per cent of the profit which
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exceeds $1 million for amounts spent on approved community support measures. The bill provides that the guidelines for what is to constitute community support expenditure are to be as approved by the Minister in consultation with the Registered Clubs Association. This specifically recognises the valuable role played by registered clubs in their local communities and provides the Government with a more effective method of rewarding clubs for the support they provide to those communities, something I have long advocated. These arrangements will replace the existing welfare expenditure scheme under the Registered Clubs Act.

Appropriate transitional measures will also be put in place to facilitate the continuation of that scheme until the commencement - from 1 February 1998 - of the new community support expenditure arrangements. In addition - and in response to concerns expressed by the club movement - the bill also contains amendments allowing clubs which operate from more than one separate and distinct location to treat each premises as a separate entity for duty purposes. This means that clubs operating from more than one site, such as clubs which have amalgamated or intend doing so, will be able to optimise the benefits provided by the tax-free threshold. Once again, this is a measure that has been of some concern to New South Wales clubs for some time.

As I have mentioned, this bill provides clubs with greater commercial certainty by entrenching these duty rates until at least 1 February 2001, with a report on club gaming machine duty rates to be prepared in consultation with the club industry and finalised by 31 January 2001. However, this fixed time frame is conditional upon the publication of an appropriately funded and enforceable problem gambling policy by the Registered Clubs Association. Under an agreement reached with the industry the association will finalise and publish this policy by 31 May this year. The Government considers this to be a vital component of the community partnership package and is determined to ensure that the clubs formulate and introduce the policy on time. Once again that is something that has been proposed by me for some time and also is part of the harm minimisation legislation that will be introduced during this session.

Accordingly, the Government has also decided to include penalties for any delay in the finalisation by the clubs of their problem gambling policy. If the Registered Clubs Association delays the finalisation of the policy, every month’s delay, or part thereof, will result in the moving forward by two months of the Government’s review of applicable duty rates for clubs. For hotels, very significantly, this bill provides greater flexibility, with the abolition of the requirements preventing hotels from holding more poker machines than approved amusement devices or card machines. This is in response to concerns from hoteliers that card machines are unprofitable and unattractive to their customers in comparison with poker machines.

The amendments provide hotels with maximum flexibility to install any mix of poker or card machines, within the current ceiling of 30 gaming machines overall per hotel. There are no changes to the ceiling of 30 machines contemplated by these amendments to the legislation. However, for those hotels which wish to operate more than 15 poker machines, the Government will conduct a competitive sale process for the right to hold more than 15 poker machines - with 2,300 poker machine permits being made available this year. No further permits will be sold for three years. Hotels also stand to benefit from a freezing of current rates of duty to at least 1 February 2001, with a report on hotel gaming machine duty rates to be prepared in consultation with the hotel industry and finalised by 31 January 2001.

Hotels will therefore benefit from increased certainty and greater flexibility provided for in the amendments contained in this bill. The TAB privatisation legislation passed last year enables TAB Limited, for the first time, to expand its business beyond wagering and into the dynamic gaming industry in this State. Members will be aware that the legislation passed last year provides for the granting of licences to TAB Limited to conduct statewide linked jackpots within registered clubs and hotels, together with a central monitoring system, which will significantly enhance regulatory capabilities over gaming machines in this State. As part of the statewide linked jackpots arrangements, linked jackpot pools in clubs will be authorised under a separate licence from linked jackpot pools in hotels.

This bill extends the potential scope of TAB Limited’s gaming business by abolishing the regulatory impediments which currently prevent it from taking on a proprietary role in relation to stand-alone gaming machines in hotels. The effect of the bill will be to allow TAB Limited to enter into agreements with individual hotels - either alone or in joint venture with the New South Wales Australian Hotels Association, and at the complete discretion of those individual venues - to purchase stand-alone or statewide links machines, or to place machines in those premises and share in profits derived from those machines.

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In the case of clubs, the Government respects the wish of that industry’s representatives at this time that the TAB’s role in relation to stand-alone machines not be extended to clubs. However, TAB Limited is authorised to own, supply, and finance - either alone, or in joint venture with the Registered Clubs Association - gaming machines which are connected to the clubs' statewide linked system. This is expected to promote the viability of the statewide links in clubs and also to assist smaller clubs. TAB Ltd will of course be subject to the same regulatory requirements applying to existing gaming licence holders and operators as provided for in the Registered Clubs Act and the Liquor Act. Also, any involvement by TAB Limited in gaming machines in hotels will be subject to the amendments contained in this bill concerning the maximum number of machines and the competitive sale of licences for poker machines in excess of 15 in any one premises.

In addition to the benefits for clubs, hotels and TAB Limited to which I have referred, the bill provides for a number of other amendments raised by clubs and hotels during the consultative process. I will briefly outline some of the most significant of those changes. The bill creates specific offences for gaming machine players in clubs and hotels who dishonestly claim prizes or otherwise cheat when playing on the machines. This will supplement existing offences in this area by bringing the provisions into line with those already in place under the Casino Control Act. Further, at the request of clubs and to overcome building constraints existing in some clubs, amendments will be incorporated to allow minors to pass through - but, I emphasise, not stop in - gaming machine areas of clubs. It will in no way compromise the strict prohibition on people under the age of 18 playing gaming machines. When a minor passes through the gaming area he or she will have to be accompanied by an adult, I wish to make that point plain.

This is a practical amendment, of assistance to smaller clubs, which allows minors, only when in the company of a responsible adult, to walk through areas in which gaming machines may be operating, on their way to other parts of the club. This is a provision that clubs have been seeking for some time. It is not to be construed that the situation will be as for Queensland or Victoria, where minors can remain in the gaming area. The bill also creates a specific regulation-making power in the Registered Clubs Act authorising regulations to prescribe matters associated with minimum levels of payments to directors of registered clubs. Regulations under this new power will be developed in close consultation with the club industry and will also balance the needs and expectations of club members. This is an amendment which will work to ensure that registered clubs are able to attract directors with the necessary experience and ability, and is recognition of the increasingly complex and sophisticated operations of the very large clubs in this State.

The bill provides for all of the necessary and appropriate ancillary, transitional and consequential amendments to put in place the elements of the Government’s community partnership enhancement package to which I have referred this evening. As part of this, clubs’ accrued entitlements to credits for duty in respect of duty instalments before 30 November 1997 are not affected. This bill provides for an important and balanced package of reforms for registered clubs, hotels and TAB Limited. The package contains a number of commonsense reforms which deliver tax relief for clubs, and increased flexibility and greater certainty for all gaming machine venues. Overall, this partnership is achieved while preserving government revenue derived from gaming machine operations.

Finally, this bill also signals a more rigorous approach for the industry to confront the harmful effects of problem gambling in this State, and to embrace the responsible service and promotion of gambling activities. In this regard, I foreshadow that I will shortly, as I indicated earlier, bring forward to this Parliament an innovative and comprehensive legislative package which will set the scene for upgrading and streamlining regulatory controls over a range of matters relevant to the responsible conduct of gaming and wagering in this State. So much is the interest in this situation that even a commercial television station in Britain recently screened part of what the Government is doing.

This package will build upon an array of measures already in place in more recent gaming and wagering control legislation in New South Wales and will supplement important harm minimisation and patron care measures adopted by a number of individual operators and outlets to date, including many of the clubs which have already, despite the fact that there has been no overall policy, done their best to try to address the problem, accepting the moral responsibility that goes with it. In addition, the package will include balanced and sensible measures relating to the advertising and promotion of gambling activities, problem gambling counselling signage, training in the responsible service of gambling, involvement by minors, access to cash, and other important reforms. Much of the detail of the substantive parts of these new measures will be the subject of full community consultation
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during the period. I look forward to speaking further about them soon. I commend the bill to the House.

Debate adjourned on motion by Mr MacCarthy.