Ireland is recognised as a world leader in the horse racing and horse breeding industry. The industry employs in excess of 17,000 people around the country, particularly in rural areas where other employment prospects are scarce. I know this because approximately 4,000 people are employed in the industry in my own county of Kildare.
The bloodstock industry is worth over €1 billion to the Irish economy. It has the potential to maintain and create more jobs if the proper structures and funding are in place to allow it to develop and grow. Ireland is the fourth largest producer of thoroughbreds in the world, producing 40% of the EU output, and 11% of the world total. Irish horses are exported to more than 35 countries around the world with a total value of over €150 million last year.
The industry has for many years been an important source of high value foreign direct investment as many high net-worth individuals are attracted here by our top class young horses. Our position as world leader should not be taken for granted and it will not be maintained without ongoing development and investment. We are open to challenge as a world leader. Many of our competitors are investing in their industries and providing facilities, prize money and infrastructure in order to attract the top horse breeders and owners to their shores. If we cannot match them and continue to breed top class race horses in this country we will lose our leading industry position with a resultant loss for the economy in terms of jobs and economic activity.
The investment by the French authorities in their bloodstock industry over the recent years in particular, illustrates the need never to take for granted our position as a world leader in the industry. The improved French prize money system and breeder initiatives have attracted an increased number of foreign owners to France.
There has been an increase in the number of top stallions in England and some of our top stallions have gone to France. Elusive City is an example of one stallion who has been lost from the Irish National Stud to stand in France.
A large number of mares come to Ireland each year to be covered by our top stallions. It is the practice to house these mares in small yards all over the country. This brings significant income to many local economies. If we do not retain our top stallions, we will lose those mares and that income.
To retain its standing at the top of the table, the Irish bloodstock industry needs a secure guaranteed funding stream allowing it to plan for its future and to make investment where required. Ours is one of the few horse racing industries in the world that does not have its own guaranteed funding model. Currently, the industry relies on an annual allocation from the Government through the horse and greyhound fund. The lack of a dedicated secure funding stream is a precarious position, particularly when budgets are tight. This is a problem for both the industry and the Exchequer and a solution needs to be found to help both. Exchequer funding from betting tax has fallen.
The recently produced Indecon report showed that in 1991 the Exchequer collected €38.5 million in betting duty. By 2001, this had increased to €68 million, but in 2011 only €27 million was collected. This creates a funding shortfall for the industry which has to be met from already-scarce Government funds. This is not sustainable in our current budgetary environment.
The industry does not want, and never wanted, to be reliant on an annual handout from the Government. In light of national financial circumstances and facing into further austerity budgets, the long-term goal of the bloodstock industry is to return to circumstances in which it can survive without the direct support of the Exchequer.
While moves to broaden the tax base on betting are essential, improvements in commercial activity by the racing and breeding industries are also required. I welcome the establishment of the joint HRI-Turf Club implementation task force and its goal of achieving significant efficiencies, as outlined in the Indecon report.
Although Ireland is one of the world leaders in horse racing and breeding, I raise this topic because, if we are not careful and do not have an adequately funded, properly structured multi-annual budget, at a time when we are being targeted by other leading countries, we could be passed out in the final furlong.