Legislative Council Tuesday 17th October, 2017

Ms  FORREST (Murchison ) - Mr President, I thank the member for Mersey for his comprehensive noting of the report and his comments.  I think he must have been looking at some of my notes. 

If we had to compile a list of things that society could do without, I am sure poker machines would be included, but they are legal - at this stage, anyway - and a few people enjoy them apparently.  There is no doubt that poker machines cause social harm, but - and I am trying to briefly summarise what I understand the industry's position to be - the economic benefits exceed the social cost.  Why else would we tolerate them? 

Before addressing these points, I want to note that organisations who deal with the social harm of the pokies and other forms of gambling, were disappointed that the committee did not recommend the removal of EGMs from community venues - that is, clubs and pubs.  Organisations such as Anglicare have spoken out since the release of the report and made it clear that they believe the evidence presented warranted the complete removal of pokies from community venues.  

It was not all negative, though.  Anglicare, as a key stakeholder, expressed there were positive aspects of the report in its view.  The organisation noted that the report identifies the damage that pokies cause to individuals and communities.  Having fallen short of complete removal, Anglicare noted the recommendation of a significant reduction in the number of EGMs by 2023.  The committee further recommended that licences not be in perpetuity and noted that the recommendation for the CSL to be applied to pokies and casinos was a positive step.  Anglicare also expressed disappointment that the Government, despite assurances during the inquiry that it would keep an open mind and be open to considering recommendations, has consistently defended its original framework rather than showing curiosity about how the findings and recommendations might bring about better outcomes.  I will speak more about this shortly.

I accept Anglicare's view that, unlike most other forms of gambling, poker machines are continuous.  You press the button every three seconds and they do not tell the user the price.  With racing and keno and lotteries, the person knows how much money they have spent at the time of the actual transaction.  The only thing that is unknown is whether that person is going to win anything or not, and chances are they will not.  With a poker machine, the cost is not known until after the game is over.  Also the person could bet a dollar and that game could provide a win of 30 cents, which is actually a loss of 70 cents that the person did not get back.  The 30 cents is celebrated on the machine with lights and sounds and great excitement as if the person has won money, when they have actually lost money. 

I accept the comparisons made by Anglicare.  As we are often reminded by those wanting to maintain the status quo or avoid significant reduction in the number of EGMs, other forms of gambling also cause social harm and can be addictive to some individuals.  For example, online gambling is often a fast and continuous form of gambling, but is not covered by state jurisdiction, making it a challenge for the state in having limited capacity to act directly upon this.

Ms Rattray - Interestingly, South Australia has a consumption tax of 15 per cent on online gaming within the country-

Ms FORREST - Within the state. 

Ms Rattray - Within their state, yes.  The Tom Waterhouse-William Hill situation, so they have already made a start on that.

Ms FORREST - That is state tax, yes.  We have state gambling taxes. 

Turning more directly to the report, I suggest the committee has done a great job of assembling as much information as it could on gaming, which, of course, includes poker machines and keno and table gambling at casinos.  I commend the member of Mersey, as Chair of the committee, for working hard to ensure the report contains as much detail as it does.  I appreciate how difficult this can be, especially with an area of strong and diverse views and partisan politics playing out in what ideally should be an open and engaged process where existing views are challenged and open to change if evidence warrants this.   

This is much more preferable to an approach where members take the predetermined personal view, or the view of the party, into the committee.  It seemed outwardly, to members of the public and many of us not on the committee, that some have been unwilling to have their position challenged or possibly changed.  Not being a member of the committee, not from lack of indicating willingness to do so, I could be wrong on this.  What I am reflecting on is how the commentary around the release of the report, before and after, was received and perceived by the broader community.

Even before the committee got underway, I must confess I had mixed feelings about what the Government was trying to achieve.  I say this because before embarking on the inquiry, the Government laid down its position on gambling with the March 2016 ministerial statement by the Treasurer, followed by the post-2023 framework consisting of five guiding principles and a set of policy positions.  Was there going to be any point to having an inquiry if the Government had already made up its mind?  Was it just another example of the Henry Ford dictum that you can have any colour you want, so long as it is black?

The committee obviously felt a little unclear about what the Government was up to.  I noticed the Chair quizzed the Premier and Treasurer.  Finding number 2 says that the Government reassured the committee it would be open to recommendations based on evidence.  There is little evidence of this.  In fact, I suggest the reverse is the reality.

Why did the Government start a campaign even before the report was finalised?  I must admit I do not follow the theatrics downstairs as much as some, but I recall the Government arranging a Dorothy Dixer to be asked on 11 September before the committee had reported to allow the Treasurer to set the Government's policy on gaming.  Hardly a shining example of being open to recommendations based on evidence of the committee.  Remember, this was before the committee reported.  The committee can only report the evidence it receives.

The Treasurer went on to say that if pokies are banned from pubs and clubs, it would have a 'devastating effect on our pubs and clubs'.  Those were his words, not mine.  It is probably just a coincidence, but when I read the dissenting statement from a Government member on the committee, I noticed the exact same words were used when the member recorded her dissent from the committee's recommendations for a significant reduction in machine numbers in pubs and clubs after 2023.

I will quote a few words from the dissenting report -

Any 'significant' reduction of EGMs in hotels and/or clubs … would have devastating economic and employment impacts on many businesses and communities ...

As I said, probably a coincidence that both used the same word 'devastating'.  The evidence suggesting devastation must have been overwhelming.  Was it?  I went looking for the predictions of the impending devastation and I struggled to find them.  I am hopeful the honourable Leader may be able to help put me in the right direction on that.

If there were going to be devastating economic and employment effects on businesses and communities, I would expect to find the evidence leaping out from the pages.  I could not find any businesses, apart from those with pokies, that argued that retaining pokies in the community was vital to their own survival.  I could not find any evidence presented by communities that retaining pokies was essential to ward off devastation.  No evidence whatsoever.  Yet the Government says that there will be devastating effects on businesses and communities.

There will be job losses in venues with pokies if pokies are removed, but one thing we can be certain about - and there was no evidence presented to the contrary - is that money otherwise spent on pokies, would be spent elsewhere in the community.  This money does not simply disappear or evaporate.  It can, and could, and would be spent in other areas that have the capacity to create more jobs and support local businesses.  I want to repeat that.  There was no evidence to the contrary that money otherwise spent on pokies would not be spent anywhere else in the community.  This is what I am told and I believe it.

It was interesting, when I was driving down yesterday and listening to my friend the ABC on the radio, I heard the Lord Mayor of Hobart explain the economic rationale for the Government's policy position.  She said that if pokies were removed from communities, there would be thousands of job losses.  Not just direct jobs, but all the indirect ones from the milkman delivering the milk for the cappuccinos to the detergent salesman supplying products to clean the floors, to the suppliers of uniforms, those suppliers of advertising, electricity.  Thousands of them, as far as the eye can see, all unemployed.  When I hear fearmongering on that scale, I sense a weakness in the Government's case and its arguments.  Where will the $100 million also currently spent on pokies in pubs and clubs go if pokies are banned?

What evidence did the committee receive?  The only evidence presented was from an economics professor whose modelling showed an increase in employment.  It is always open to committees not to accept evidence that is not of significant importance to the inquiry, but how is it possible to argue there will be thousands of direct and indirect jobs lost when there is no evidence to that effect?

We can forgive the Lord Mayor of Hobart because she is not bound by the committee protocols, but she was enunciating the Government's position, the position they enunciated before the tabling of the report.

My understanding of dissenting reports is they need to be confined to the matters of dispute and, as members know, Standing Order 196A covers dissenting reports.

There was a dispute about whether businesses and communities would be devastated by removal of poker machines, should it occur.  I am not talking about EGM businesses; I am talking about all the other businesses in the community and the community itself, which was the claim.  If so, what evidence was presented?

How is it a member can dissent from a recommendation with a comment not supported by evidence when Standing Order 196A clearly states 'A Dissenting Statement confined to the issues in dispute, may be added to the report'?  I do not know if the dissenting report should have been accepted.  It does not comply with the standing orders.

I noticed dissent from the same member from recommendation 4, to work with communities concerned with pokies to enable voluntary withdrawal of machines from communities.  The dissenting report stated and I quote from the report itself -

Public money should not be used to buy out EGMs from pubs and/or clubs ...

Now we are getting a dissent from a recommendation which was never made.  I draw members' attention back to Standing Order 196A. 

It cannot be for any reason other than to score petty party-political points when what we should be doing is waiting for the findings, reading them, analysing them and making the necessary changes.

I take umbrage at the misuse of the committee system.  The committee trusts this House and the other House to diligently and forensically inquire into matters of public concern.  The approach taken undermines the committee process and does nothing for public confidence in the committee system.

Gaming is unquestionably an area of public concern, but it is an area where differences of opinion are not simply determined by where one may be positioned on the political spectrum.  It is not dissimilar to, say, smoking.  People from all political persuasions find common agreement on public policy approaches to smoking.

I find attitudes to pokies in the community do not necessarily follow party lines which gives us a real opportunity to objectively look at the evidence, change our public policy settings and move on.

What does the Government do?  I do not know whether there were leaks from this committee as there allegedly were from the Public Accounts Committee inquiry recently.  Before the report was released it seems there was some insight into its content.

The Government took a distinctly partisan view and headed off to the community to scare them about what the other side might do and they have continued to do that since.

I recently watched Nick Xenophon the other day talking about why he has chosen to move back into state politics in South Australia.  The word he used was 'despair'.  He despairs of how existing political parties are unable to implement sensible public policy and move their states forward.

I despair when we get an issue which straddles political boundaries, but we cannot move on because of political games.  Sure, we are not all going to agree on everything about gaming, but we can agree on enough to move forward with improvements based on evidence, not predetermined political posturing.

The Greens member of the committee also included a dissenting report.  While this was predominantly confined to the area of disagreement or dissent, it looks very aligned with Greens policy before as well as after the inquiry. 

The member for Huon also voted against the three proposed recommendations that were lost   the removal of the EGMs from the community, application of public interest test to existing venues post-2023 and harm minimisation measures and mandatory precommitment post-2023.  These were not supported.

The only recommendation the committee made that he voted against was recommendation 2 regarding strategies to facilitate significant reduction in EGMs by 2023.  It is not clear whether the recommendation referred to whether the strategies need to be adopted by 2023 or whether a significant reduction needs to occur by that date.  Maybe the member for Mersey could clarify that in terms of that recommendation.

The member for Huon did not prepare a dissenting statement so I hoped he would be here today to perhaps shed some light on why he dissented from that particular recommendation in his comments on this debate.  This will not happen, so he may do it another time.

To backtrack a little, I found the report quite comprehensive.  I do not agree with the kneejerk reaction of Andrew Wilkie, who thought the report looked like it was written by the industry.  The findings section looked to be a fair summary of what the committee was told.  Committees can only report the evidence they receive.

The evidence of social harm caused by gambling is hard to ignore.  Almost everyone agrees it causes social harm.  There may be less agreement on how much harm and even less on what to do about it.  However, the committee recommended a significant reduction in the number of machines after 2023.

I did not read all the evidence presented.  As I was not on the committee, I did not feel that was my job.  I thought the committee could manage that.

Ms Rattray - You would have needed a good spare month.

Ms FORREST - Yes, that is right; I had other committees I was working on.  Term of reference (a) asked the committee to consider not only the number but the types of machines.  I read the findings and recommendations, but could not see anything in the report about the types of machines.

I understand - a point that I am sure members would be aware of and find quite interesting - that currently there is a case before the courts in Victoria where Maurice Blackburn is taking action against pokie venue Crown Casino and machine manufacturer Aristocrat Leisure for breaches of the consumer law for misleading and deceptive conduct.  The argument, as I understand it, centres on the design of the machines that deliberately prey upon problem gamblers.  I will be interested to hear the outcome of this case.  Because of all the public discussion about how machines are designed to addict people, I expected to read more in the committee's report about the types of machines that may offer relief, short of total removal from the communities.

Members will be aware that these machines are programmed for the noises they make, the way the lights flash, how often they flash, the speed of the spins - all those things are intricately designed to create an addiction and encourage people to keep going.  I was disappointed there was not more commentary in the report around that matter.

Mr Gaffney - We actually met with the lady who has taken Aristocrat on in Adelaide.  Her evidence is on Hansard as is her submission to the report.  It was quite interesting what she had to say.

Ms Rattray - We did receive a bit of evidence.

Ms FORREST - I am not saying you did not get it.  I am just saying it would have been good to have a little bit more in the report about that because it is a significant issue.  There are many ways to reduce the impact.  One is removing machines or reducing their numbers, but another is making them less attractive or less addictive.  People who have an addictive nature find it very difficult.  People are addicted to all manner of things - drugs, alcohol, gambling and other unsafe risk behaviours.

Ms Rattray - I want to add that the Tasmanian Liquor and Gaming Commission looks at the types of machines as well that are put into venues.  They have to comply with certain requirements.  That is already in operation.  Maybe if the Tasmanian Liquor and Gaming Commission is doing a report into harm minimisation, it will look at the types of machines.

Ms FORREST - I will look forward to that; I am just making a point about what it is this report we are noting at the moment.

On the matter of future taxes and whether EGMs should remain in communities, recommendations numbers 17, 18 and 19 suggest a sliding scale so that pubs and clubs and casinos would in aggregate be no worse off. 

How can we have a discussion about the returns everyone will receive if we do not know the amount of money we are talking about?  That is the problem with the existing agreement, where a licence was handed out for nil concession without really knowing what it may have been worth.  Now we do know how much it could be worth, or at least we should know, because Treasury has done the modelling or has managed to work out the returns made by Network Gaming.

If other profits are removed from Network Gaming which finding 48 states are significant, will they go to the Government, to venues or back to the players?  Why cannot the players get more?  In other words, why should not the predetermined amount of 10 per cent they lose in every press of the button be set to a lower figure?  Why should the spin rates not be slowed down?  What exactly are the amounts of the significant profits in the system?

Treasury did modelling to ascertain the level of profits.  The Treasurer presumably knows the level of profits so why have we not been told about them?

How much of the significant profits should be shifted about?  In other words, what is the basis for determining who gets what?  It seems the only basis, from reading between the lines - there is no categorical statement in the report to that effect - is what we currently do and/or is what is done in other states.  Is that good enough?

There is one aspect to the whole debate which puzzles me.  If poker machines are so bad, should they not go completely?  Not just from pubs and clubs, but also from casinos.

I would not be saddened personally if poker machines were removed from the community, but almost 40 per cent of overall losses occur in the two casinos.  Do we banish domestic violence from all communities but allow it into special enclaves?  Of course we do not.

I would like to see the principle equally applied right across all aspects of gaming.  The committee started on this track.  It recommended the Community Support Levy be applied to EGMs in casinos as well as to those in the community.  It is hard to fault that recommendation.  The argument of equity should apply.  A lot of people in the community think this is the case already.  They would be surprised to know it is not.  I have mentioned it to a few people and they were surprised.

The committee did not feel the need to treat EGMs in clubs any differently from EGMs in pubs or casinos.  Again, a principle of equity triumphed.  Does this mean EGMs in casinos should be similarly taxed?  The report was silent on this matter.  I am not sure why.

The Government's post-2023 structural frame specifically said returns to Government should be appropriate.  I took that as an invitation to look at the basis for setting tax rates.  The Federal Group and the THA, in their joint submission late in the inquiry process, thought a much lower tax rate was appropriate for EGMs and casinos and suggested slashing the rate from 25 per cent to just 10 per cent.  Because that rate might apply in other jurisdictions does not make it appropriate.

We know there is nothing to be gained from a race to the bottom.  We know this from our Betfair experience.  It is even more relevant in this instance, because the amount players feed into poker machines is not affected by tax rates.

The return to venues will be affected, but so what?  If they are making returns comparable to other areas of their business, surely that makes the rate acceptable.  We do not need to attract more investment money to poker machines and these sort of facilities.  The statewide cap will not increase.

I was pleased the committee recommended that any licences not be perpetual licences.  Perpetual licences tie the hand of future governments.  When given for nil consideration, they are a hand-out.

My reading of the report suggests without perpetual licences there is little chance of our tender system being used to allocate EGMs between venues.  The prospect of a government receiving up-front amounts for licences is removed and the alternative is to levy greater taxes each year.  That is the case, isn't it?  It is a trade off between up-front fees and annual charges.  The report did not specifically say so, but one would assume that to be the case.

Now that perpetual licenses appear a remote possibility, how has this been reflected in the Government's policy position on EGM's?  Do they now support a system of stepped taxes to take away excess profits, now the opportunity to receive up-front amounts via a tender has all but disappeared?

What is the Government's position on keno taxes and how to allocate the keno licence?  The Government expected others to decide on polices before the report was finished but it appears it is okay for the Government to do so.  Maybe on 12 September, when they tried to embarrass the Leader of the Opposition for her lack of policies, they already knew what the committee was likely to recommend.  I wonder.  Surely not.  It undermines our committee system in a most unsatisfactory manner.

Mr Gaffney - I must put on record I was never concerned there were any leaks from the committee. That has been suggested.

Ms FORREST - The member for Mersey and his committee have done a pretty good job.  Inquiries can be tough going, doubly so if they are joint committees, even worse when they are trying to score political points off one another.  I hope we find a sensible way forward, despite the despair that envelops us all.  This report has provided a lot of useful information.

 

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