Introduction

Chairman Pat O’Brien and Harness Racing New Zealand board members, club delegates, and invited guests. 

Thank you for the invitation to address the annual conference of New Zealand harness racing clubs and kindred bodies. 

I would also like to acknowledge the members and representatives of the New Zealand Racing Board here today. 

First, let me congratulate you on a successful 2008/09 season in the face of trying conditions.

I became the Minister for Racing nearly nine months ago. Since taking over the portfolio, I have spent much time meeting with those within the industry.

It is clear that the industry faces a number of serious and significant challenges.

Many are obvious. New Zealand is in the midst of a global recession, and the racing industry is not immune to the effects.

Betting revenues, on which clubs rely, are down. Credit for projects is becoming less available, and the shape of the Government’s books means there is no scope for increased support from the Government

This has been quite an abrupt change from the boom times of recent years, and will take some adjusting to.  While presenting a challenge, it also represents a great opportunity for the industry to consider its future, and re-evaluate whether it is performing to its true potential. 

Vision

As I said before, I have spent a lot of time meeting those within the industry since I had the privilege of being given the racing portfolio. In this time, concern has been expressed to me about the apparent lack of an overarching strategic vision for the whole industry.

The industry must have a coherent vision of where it sees itself in five or ten years in the future, and a plan for how it will get there.

The absence of such a plan is not as noticeable when times are good. The recent good times have papered over the cracks. This has allowed the hard decisions facing the industry to be put on hold.

There are provisions that allow the industry to develop a vision. However, the processes seem to be treated as a mere formality rather than as an opportunity for genuine and constructive engagement within the industry. Indeed, this was a finding of the recent performance and efficiency audit.

I sense a strong desire for such a vision to emerge.

The conference may be interested to know that I recently had a meeting with the chairmen of the Racing Board and the three codes. I asked them to develop a vision for the future. I have asked that this work be completed by the end of August.

I want to make it clear that when the chairmen come back to me with a proposal it is only the start of an ongoing process, and one that will be open and transparent. This is your industry. I expect you to get involved, and I expect the industry’s leaders to share and discuss the issues with you in a genuine and meaningful way.

I am sure you will agree with me that the industry is at a crossroads. I state again that it is imperative that the industry must work out what it wants its future to be, and make a concerted effort to address the issues facing it.

The Government does not want to see the industry fail, and I trust that the industry will step up,

The current situation is an opportune time to set such a plan. It would allow the industry to manage through the immediate situation, and also position the industry to take full advantage of the revival of the economy.

For example, many see an opportunity for the industry to move its public image from simply a form of gambling to one of managing and presenting events. 

I acknowledge that effort is being made in this regard, and I welcome recent initiatives such as “Destination Summer Holiday Racing” and “Christmas at the Races”, which have been major successes. However, the industry should look to further enhance its events profile.

While concerned, I am encouraged by examples of forward planning such as the recent Addington Racecourse redevelopment. The harness racing code and the NZ Metropolitan Trotting Club’s significant investment to make Addington’s facilities world-class is a positive step. This will ensure that Addington remains a premier destination for racing.

As with the Addington Racecourse redevelopment, the industry must look to the future and ensure that the racing industry is performing to its full potential.

Things can always be done better, and increasingly, the industry should look to do things together.  The three codes have much in common and must work together wherever possible for the benefit of the industry.

While some small steps have been made towards shared services, the industry must be bolder and work more co-operatively.

The ball is in the industry’s court, and I encourage you to engage with your leadership about your future. As noted earlier, I expect to receive a vision proposal from the chairs later this month, and I want the wider industry to be involved in the process.

Reliance on gaming machine funds

There has recently been much scrutiny by the media of the level of gaming machine funding going to the racing industry. I am concerned that this is symptomatic of the lack of a long-term vision within the industry. Racing clubs are increasingly reliant on gaming machine funds for conducting race meetings.

The trend is particularly concerning - the amount of money granted to racing by non-casino gaming machine societies has doubled since 2005 – rising from around $11m in 2005, to over $20m currently. While some of this has gone into improving amenities, much of it has gone into stakes. 

Certainly, racing is entitled to receive such grants. However, while the use of such funds and the short term benefits they provide is appealing, there is the very real potential for long-term damage to be done to the industry by relying on an unsustainable, unreliable and controversial source of funds for stakes.

As the current economic conditions reduce the amount of gaming machine funds available while increasing the demand for the limited funds, grants made to racing are a highly-visible and easy target for critics.

The reality is that these funds do help sustain an industry that provides significant positive benefits to the economy and communities throughout the country.

It is always worth noting that the industry is worth around $1.5bn to the economy, and sustains over 18,000 jobs. It is also earns considerable export dollars, and provides over 1,000 racedays worth of entertainment around the country.

However, despite the positive benefits, the fact remains that a vocal section of society objects to such funds going to racing.

Rest assured, the Government has no plans to stop the industry from receiving such funding. However, I reiterate my concern that the industry has become so dependent on this unreliable source of funding for stakes.  

Again, I look to the Racing Board, Codes and clubs to develop a clear strategic vision for racing, and one that reduces the industry’s reliance on gaming machine funds.

Government support for recent racing initiatives

While encouraging the industry to wean itself off its dependence on gaming machine funding, the Government is committed to the New Zealand racing industry.

We are happy with recent initiatives, which have seen racing’s bottom line increase by around $40m annually. 

Racing Safety Development Fund

One initiative we will continue to support is the Racing Safety Development Fund, which was set up to support racing club projects that improve safety at racecourses.

After two full years of operation, the fund has already allocated $2m to support projects that enhance safety in the industry and improve the quality of racecourse facilities.

Just over $700,000 of this was allocated to worthwhile projects which enhance the safety of harness racing venues.

I should remind you the applications for the current funding round opened on 1 August, and many of you will have received my letter inviting applications. I strongly encourage interested clubs to apply.

I would like to acknowledge the hard work of Pat O’Brien, who serves on the group that considers the applications to the Fund. 

Conclusion

To conclude, the industry faces major challenges, both now and in the future.

Decisions on how these issues are to be addressed must be made. It is time the industry woke up.

You know what the challenges are. I’m here to support the industry through this, and am confident that the industry has the ability to sort itself out. It’s time we got on with it.