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Minister for Racing Winston Peters has announced a $72.5 million dollar COVID-19 emergency support package for the racing industry. “We can’t gild the lily. The racing industry has been hit by the perfect storm of COVID-19 while in a weak financial state and in the midst of a reform programme,” Mr Peters said. “As a result, there is a genuine risk of insolvency and the industry losing the future gains of its reforms. “The Government has a respond, recover, and rebuild strategy for COVID-19. This announcement is the first step towards a long term restoration of racing,” Mr Peters said. The support package consists of: $50 million dollar relief grant for the Racing Industry Transition Agency (RITA) Up to $20 million in funding to construct two new All Weather race tracks. $2.5 million dollars for the Department of Internal Affairs to fast track work on the online gambling revenue, and address loss of revenue impacts on community and sport groups. “Of the immediate grant, $26 million will be used by RITA to pay its outstanding supplier bill which it hasn’t be able to do because of strangled revenue. The other share of this package will ensure RITA, and each of the racing codes, can maintain a baseline functionality and resume racing activities,” said Mr Peters. “The racing industry is seriously underestimated for its economic contribution. For this reason the Government will also consider recapitalising the industry to help promote a quicker recovery and achieve a greater economic outcome. “Past studies indicate Racing contributes $1.6 billion to the economy each year.  There are 15-thousand full time racing industry jobs and nearly 60-thousand jobs which participate in the industry in some shape – from vets to equipment suppliers, and owners. New Zealand bloodstock is world class and a significant export earner.” “Over the next three months officials will assess recapitalisation options. Ministers will need to be assured industry reforms are making progress to ensure any such future investment is well directed,” said Mr Peters.  The Government has also approved up to $20 million dollars from the Provincial Growth Fund (PGF) to construct two new synthetic race tracks. The intention is to have one located at Awapuni in the Manawatu, and the other at Riccarton Park in Christchurch. The construction of a track in Cambridge is already underway after receiving $6.5 million in PGF funding. “Whilst the $20-million has been approved the next step is for RITA and the Codes to consult with the local race clubs on the terms behind these projects,” Mr Peters said. “COVID-19 has also impacted on funding available to community and sport organisations which receive a share of gambling revenue. There has also been an increase in New Zealanders gambling offshore throughout online platforms. “Both trends are concerning. For that reason the government is fast tracking a programme of work by the DIA to re-evaluate the gambling framework of our community, sporting, and racing groups,” Mr Peters said.

Racing Minister Winston Peters says the Government will introduce two new pieces of legislation this year to revitalise the domestic racing industry. Cabinet this week considered its response to the ‘Messara Review of the Racing Industry’ as well as advice from the Ministerial Advisory Committee (MAC) on Racing. “The New Zealand racing industry is in a state of serious decline. The Coalition Government supports the overall intent of the Messara Report and is committed to reforms. We know we have the grass, the race animals, and the people to help the industry achieve its potential,” said Mr Peters.    “As a result, Cabinet has agreed to a stepped approach with the introduction of two Bills to amend the Racing Act 2003.” The first Bill, due to be enacted by 1 July 2019, will put into immediate effect a transitional governance arrangement.  This Bill proposes the New Zealand Racing Board (NZRB) be reconstituted as the Racing Industry Transitional Authority (RITA) to drive the transition of the industry. This Bill will also bring some financial relief for the industry by making offshore betting operators contribute to domestic racing and sports codes from the bets they take from New Zealanders. “It is essential to have this transitional governance in place.  RITA will have a legislative mandate that encompasses change management as well as the current business-as-usual functions and powers of the NZRB,” said Mr Peters. “As a result of RITA’s work the government anticipates a second racing amendment Bill to proceed later in 2019.  It will implement the remaining reforms including post-transition governance,” he said. The Cabinet papers are being proactively released as well as the MAC interim report. They can be found here:   RT HON WINSTON PETERS

Racing Minister Winston Peters has announced a five-member Ministerial Advisory Committee to inform next steps on the Messara Review of the New Zealand Racing Industry. “This government is committed to reforming the racing industry. The Ministerial Advisory Group will develop a plan to operationalise the Messara Report to deliver better governance and economic outcomes,” said Mr Peters. “The five people appointed to the Ministerial Advisory Committee bring their personal expertise and ability to provide independent, strategic assessments of the business change proposals for the racing industry. Between them they have experience across the three racing industry codes,” he said. Mr Peters has appointed Dean McKenzie as Chair. Mr McKenzie is an experienced racing administrator whose dedication and passion to improving the industry make him the ideal choice to lead this very important work. He will be well-supported by Committee members Bill Birnie, Liz Dawson, Kristy McDonald and Sir Peter Vela.   “Collectively, they will identify the technical, legal, financial and process-oriented decision points for racing reform and return the industry to a well-managed and sustainable economic growth path. They will also take into account the feedback received during the public submission process.” said Mr Peters  The Committee will provide an interim report to the Minister for Racing by the end of February 2019, to be followed by Cabinet decisions, and legislation to modernise the industry. The Committee is being created as a potential precursor to the establishment of a Racing Industry Transitional Agency (RITA), subject to future government decisions.   RT HON WINSTON PETERS

On 17 October 2018, the Racing Minister, the Rt Hon Winston Peters, announced proposed changes to the tax treatment of bloodstock. The changes were introduced by way of Supplementary Order Paper (SOP) No 135to the Taxation (Annual Rates for 2018–19, Modernising Tax Administration and Remedial Matters) Bill (72-1). The Bill is currently before the Finance and Expenditure Committee with a report-back date of 3 January 2019. The main proposal in the SOP is that new investors be entitled to claim tax deductions and be taxable on receipts as though they had a bloodstock breeding business, if they: • purchase, from a New Zealand premier yearling sale, an interest in a yearling that has the qualities to be a future stud-founding horse (referred to as a “standout yearling”) • notify the Commissioner of Inland Revenue of their intention to breed from the yearling for profit in the future and provide the owners’ details, and • provide evidence as required by the Commissioner to support their stated intention, including a business plan. The SOP sets out the method for setting bright-line price thresholds for thoroughbred and standardbred yearlings to distinguish standout yearlings from other yearlings. It also proposes that if a horse is sold to overseas investors or exported without first racing or breeding in New Zealand, the greater of all previous deductions or its market value be treated as income to the seller/exporter. This rule incentivises investors to undertake some racing activity in New Zealand before a standout horse is sold abroad or exported. The amendments proposed in the SOP apply from 1 January 2019. This means that the legislation, expected to be enacted in early 2019, will apply to yearlings acquired at the New Zealand National Yearling Sales Series at Karaka in late January 2019. The closing date for submissions on the SOP is Wednesday 24 October 2018. Source:

Harness Racing Annual Conference Speech 12.30pm 28 September 2018 Introduction Good afternoon ladies and gentlemen. Thank you for your invitation to be part of your annual conference and to deliver the opening address. This is an opportunity to reflect on an eventful 12 months and engage with both new and familiar faces from throughout the industry.  You have a very interesting and full programme over the next two days. It comes as no surprise to see this afternoon’s panel discussion about Mr John Messara’s report. You’ve got a strong panel of experts and we hope you enjoy the session. In the meantime, here are some of the details and next steps. State of the racing industry It has long been apparent to most people within the New Zealand racing industry, that the industry has been steadily declining, and is now in an extremely dire state. Issues facing the industry include: the continued decline in foal crop; pressures from breeders, owners and trainers to increase prizemoney; a lack of funding sources; the profitability and sustainability of race clubs; and deteriorating facility infrastructure and investment. The following two facts sum up a bleak story for harness racing: the foal crop fell from 2,142 in 2012/13 to just 1,781 in 2016/17 – a decline of 361 foals in just three years; and total domestic turnover has fallen from nearly $300 million in 2007/08 down to $218.9m in 2016/17. The status quo is clearly not an option if the industry is to be not only sustainable, but successful in 10 years’ time. Comprehensive action at a structural, first-principles level is required. That’s why, as Racing Minister, the scope for Mr John Messara to conduct a high level review of the racing industry was called for. Mr Messara, who as you all know is a top Australian administrator and stud owner, was given a broad canvass to look at the health and future of the industy. The Messara report and its recommendations Mr Messara has delivered. His report is of the highest quality and addresses the relevant issues. Although Mr Messara’s review has a strong thoroughbred focus, his recommendations are relevant to the whole industry and aim to deliver positive impacts for all three codes. It’s very much the first-principles blue print to address the significant problems facing New Zealand racing. The report’s findings and recommendations for industry-wide change are of vital importance to harness racing, especially with regards to proposed legislative, administrative and structural changes. That’s why discussion about the report forms part of your programme this afternoon. Mr Messara has confirmed our worst fears – that the New Zealand racing industry, is vulnerable and in a distressed state, with far-reaching reforms needed to arrest its decline. Harness Racing Chairman, Mr Ken Spicer, came to meet me following the report’s release and he delivered sobering news – that harness racing is indeed facing threats and challenges – we are all in the same boat. What we have in this report is a clear view of what needs to be done.  In summary, the report’s key recommendations include: changes to the current governance structure; outsourcing of TAB commercial activities to an international operator to help increase prize money; amending the distribution formula to the codes; repeal of the betting levy paid by the New Zealand Racing Board to the Government; a serious increase in prize money each year; and a reduction in the number of race tracks. It’s been pleasing to find that, overall, the report has been positively received by the industry. The initial view of industry insiders, including Harness Racing New Zealand, is that the majority of the recommendations are sound and have merit. We also acknowledge that some recommendations would have a greater impact on harness racing than others.  Proposed venue consolidation Venue consolidation is one such issue. It is important to first highlight that Mr Messara’s recommendations around race course consolidation do not require the closure of any clubs. The recommendations do, however, highlight the fact that New Zealand has too many race venues for the scale of our industry. For example, in the Canterbury area alone harness racing takes place at Addington, Motukarara, Ashburton, Timaru, Methven, Kaikoura and Orari. The abandonment or postponement of races due to poor track conditions, particularly for the thoroughbreds, is an all-too-frequent occurrence. It’s costing the industry millions in lost revenue every year. Mr Messara’s recommendations, if implemented, would close 20 tracks in the galloping industry over the next eight years, including 11 from next season. Of those 11, four are also used by the harness racing industry – Reefton, Omakau, Waimate and Winton. There are a number of other galloping tracks, also used by harness racing, which are recommended for closure. Mr Messara also mentioned that there are nine thoroughbred racecourses recommended for closure that he believed the harness code might wish to retain. It is pleasing to see that a conversation between the three codes about racetrack consolidation is well underway.   This includes consultation undertaken by the Future Venue Plan Joint Working Group, which has been established between the New Zealand Racing Board and the three codes to develop a future infrastructure plan for the industry. Mr Messara referred to the ongoing work of the Working Group in developing his recommendations.  We accept racecourse closure may be difficult and confronting, but some concessions will need to be made for the good of the industry as a whole. As noted by Mr Messara, the sale of surplus tracks would generate funds to upgrade the facilities and tracks of the remaining racecourses. Like any successful business, this is consolidating to remain competitive. The remaining facilities would be first-class, providing a foundation for a streamlined, modern and competitive racing sector capable of marketing itself globally. Proposed amendment to the distribution formula Tax and levies play a big part in the recommendations, and it’s acknowledged that proposed changes to the distribution formula in the Racing Act will be of great interest to the harness racing industry. The distribution of TAB profits between the codes has always been a highly contentious issue. As noted by Mr Messara, there is no right or wrong answer to the arguments advanced by those for and against the inclusion of betting on overseas racing in the formula for distributing TAB profits. It therefore comes down to what is considered equitable. We accept that many will find this recommendation, and others, contentious and of significant interest to both the racing sector and local communities. Next steps Some may think the recommendations are too radical. Others may just plain disagree. That’s why it’s vital that those most vested in the industry have the opportunity to provide feedback on the recommendations. That’s why we are committed to an open and frank discussion with all stakeholders on the report’s findings. You‘re probably aware that an official call for public feedback on the review was announced on 13 September. Consultation will run for five weeks, closing on 19 October. Your views and comments are very important, and we strongly encourage you to provide feedback on the recommendations. Further information about how to make a submission is available on the Department of Internal Affairs’ website. We can assure you that we are committed to working through the report’s recommendations, and feedback from stakeholders, before taking swift and decisive action to carry out the reforms necessary to move the industry forward. As outlined on 30 August to the industry in Hamilton, officials will draft a Cabinet paper with a set of recommendations for decision. That Cabinet decision will set the direction for what is required to reset the industry. We expect these decisions to happen quickly – in time for next year’s Budget. Industry integrity and race-fixing investigations There is a subject that cuts to the heart of the public’s confidence in all codes of the sport – that is integrity. We’re all aware of the Police’s ongoing investigations into alleged race-fixing in harness racing, and the recent arrests. One can’t comment specifically on matters that are before the Courts. However, these investigations demonstrate that the public can have confidence in the integrity of all racing codes. This can only be positive for ongoing interest and punter investment in the sport.  It shows that the Racing Integrity Unit takes its role seriously, alongside other relevant agencies, to independently uphold the integrity of New Zealand’s racing industry. The importance of harness racing Let us take this opportunity to acknowledge the harness racing industry’s importance to New Zealand and the economy: Harness racing contributed 28% of New Zealand’s total domestic racing turnover in 2016/17. In 2016/17 average harness racing stakes per race were up 8%, and total net stakes were up 3.57%. There are 265 race meetings held by the 47 harness clubs throughout New Zealand in a season. There are over 3,000 standardbred horses in New Zealand. These horses raced for in excess of $28 million in prize money, with average stakes per race about $10,000. New Zealand harness racing has a proud history of producing champion horses. Some of which, including Young Quinn and Cardigan Bay, attained legendary status both at home and abroad.  And then, of course, there are the current champions such as Lazarus. Although he was a loss to the sport in New Zealand when he was sold overseas earlier this year, he is flying the flag for our harness racing industry on the global stage. This is a good example of the industry increasing its export turnover and fostering international markets for sales.  Let us also acknowledge the work being done by Harness Racing New Zealand to improve the financial viability of the industry for all participants in this challenging environment. It is discernible that your focus is on a strategic and collaborative approach, with stakeholder buy-in across the system. This approach will stand you in good stead while we consider these necessary reforms. Challenge for the industry We can all see that the conditions are there to make this the thriving industry it once was. But meaningful outcomes will only occur if the review is accepted and enforced on a large scale. And as noted by Mr Messara, a few concessions would need to be made to keep all codes happy. We can turn this around very rapidly and the benefits will start flowing equally quickly. The goals are lofty, including: a substantial increase in the collective returns to New Zealand owners; and a substantial increase in the industry’s overall economic contribution – some believe that the industry is capable of doubling its GDP. For this is achievable, an immediate and collective effort will be needed for the industry to turn itself around. And it won’t be easy. As was said on 30 August – “reform or die, there’s no off-course substitute”. The New Zealand racing industry can have the brighter future it deserves, but real change and brave leadership will be required. We have the chance to turn the industry’s bleak future around together. All the best for your conference.   Racing Minister Winston Peters

Racing's "race fields" legislation, which was touted as being one of the driving forces in transforming an ailing racing industry has been withdrawn from Parliament. Racing Minister Winston Peters confirmed the Bill before parliament had been withdrawn when speaking at the annual New Zealand Harness Racing Conference in Auckland on Friday. "The bill before parliament was withdrawn yesterday (Thursday) Peters said in response to a question during the conference". "The bill wasn't right for what needs addressing", he said. Withdrawing the Racing Amendment Bill has disappointed the management of the New Zealand Racing Board who sought to amend the Racing Act 2003 to implement a range of provisions that were designed to improve the competiveness of the New Zealand Racing Board's betting operations. The Racing Board wanted to introduce new requirements on offshore betting operators, and provide for regulations on revising the formula for allocating proceeds from sports betting between the racing and sports sectors.  NZRB CEO John Allen  The National Party issued a statement saying it is disappointed that Racing Minister Winston Peters has withdrawn the Racing Amendment Bill. " It would have had considerable financial benefit to New Zealand’s racing industry", National’s Racing spokesperson Ian McKelvie said. The Racing Amendment Bill took several years to develop and involved extensive consultation with the whole racing industry. These changes would have made it possible for the industry to get a return from betting in overseas jurisdictions on New Zealand product and also betting by New Zealanders on foreign portals, both of which currently bring no tax or income back to this country. The Bill had the support of the whole industry and was set to provide a multi-million dollar injection into the racing and sporting codes, which would have flowed through to race stakes. The Bill would have enabled the industry to receive approximately $1 million per month in extra revenue. This extra revenue has already been delayed since late last year as the Minister initially postponed the Bill. Now Mr Peters is making the industry wait even longer for that potential income. National and the racing industry will await the Minister’s next move and hope that he acts in the best interest of the industry as a whole. Harnesslink Media

Horses and Humans have a long, long association. The harness racing industry in New Zealand today continues that fruitful association in a way that is a major source of recreation and entertainment. There is much to celebrate in the racing world but one aspect is its contribution is its connectivity. Harness racing is a real and tangible industry. In a world that is increasingly virtual, harness racing has a quality all of its own. There are many reasons for the enduring appeal of horse racing but one is that in racing something happens in the real world- not just on a screen. There are real people and real horses with all the unpredictability and excitement that goes with that. Moreover, racing appeals to people of all ages and has great visual qualities. What cannot be said is that the racing industry requires a rich array of skills and expertise that derive from working with horses. Also, working safely with high performance horses calls on a set of skills that no computer can possibly emulate. And there are many people who are passionate about this work. Creating a comprehensive model of the contribution that the industry makes to the economy is challenging. In addition to those who derive their living directly from the racing sector, there is also a wide range of associated activities in areas such as accommodation, food and, travel that generates substantial employment. This complexity means that that it is easy to discount or underestimate how significant the sector is.   Harness racing has great fundamentals. That does not mean that the industry does not face some serious challenges. What is does mean is that each of the separate elements, the components, of the racing package have to be carefully adjusted to prevailing conditions. These conditions including the cost structure are dynamic. Accordingly, one area that has to be monitored carefully is the level of stakes because the balance between risk and reward is often a fine line. There is a multiplicity of costs associated with harness racing from training and transport to attending to a horse’s teeth! Specific costs will differ somewhat from owner to owner but it would not be unrealistic to estimate the annual cost per horse is much higher that many outsiders would imagine. That figure has to be related to the stakes in a maiden race and provide sufficient incentive or encouragement to owners and trainers? For the long term health of the industry stakes will have to be appropriate and realistic to reflect the underlying cost structure of the industry. Notwithstanding the challenges, there is every reason for confidence in the long term future of the harness racing industry as an important source of recreation and entertainment in New Zealand. By Winston Peters  

Competition for the entertainment dollar is intense, and likely to get more so. Thanks to the electronic medium, and in particular the internet, there is now a general availability of 'entertainment' on a 24 hour basis at little cost. To say this environment is challenging to the thoroughbred, harness and greyhound racing codes would be a gross understatement.

Sometimes, as Mr Bumble famously said, "the law is an ass" and that phrase could be applied to the case of Dr Alan Jackson’s removal as Chairman of the New Zealand Racing Industry Board – and still not replaced. What is happening?

First the Australians tried to claim the great Phar Lap as its own even though the champion thoroughbred actually came from just outside of Timaru. The fight over which country can rightfully claim Phar Lap as its own is well illustrated by what happened to the horse after its sudden death from a mystery illness in 1932.

Last month in our harness racing column we touched on the New Zealand First's wide ranging horse industry initiatives which were implemented between 2005 and 2008. It included an improved taxation regime through a reduction in totalisator duty, at four per cent of gross GST breaks when racehorses are sold for export, a policy of internationally competitive stakes for racing codes, and an industry safety plan.

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