Before I ask Senator Magnier to move this motion I should like to note the presence in the Gallery of the distinguished Irishman Lord Killanin, chairman of the commission whose report the House is now about to discuss.
Killanin Report on Thoroughbred Horse Breeding Industry: Motion.
An Leas-Chathoirleach
I move:
That Seanad Eireann take note of the Report of the Commission of Inquiry into the Thoroughbred Horse Breeding Industry (The Killanin Report).
First I wish to express my appreciation to Senator Magnier and his colleagues for putting down this motion in the House which enables us to have a discussion — to my knowledge the first in the Oireachtas — on this very issue based on this very important report. It is appropriate that I should give something of the background to the issue we are addressing here this afternoon and then give a flavour of the Government's position at this point and some guidelines as to what our position will be in the future in respect of the Killanin report.
In September 1982 the Government established the commission of inquiry into the thoroughbred horse breeding industry under the chairmanship of Lord Killanin. I am sure I echo the sentiments of Senators here when I express our appreciation to Lord Killanin for this very thorough report and also our particular welcome to him in the House here this afternoon to listen to the views being expressed by Senators to, hopefully, advance the ideas further.
The terms of reference given to the commission were: to examine all aspects of the thoroughbred horse breeding industry including horse racing and to make recommendations on its future development. In doing so the Government considered at the time that in view of the important role which the horse plays in the economic and social life of the nation there was a need to examine the state of the thoroughbred breeding and racing industries to identify the contribution to the various sectors in it to the economy, to analyse the financial structure and to present guidelines as to future policy.
The commission visited other countries to study racing, betting and breeding and, of course, visited racecourses and a number of studs in Ireland. A comprehensive picture of the structure, organisation and inter-relationship of the breeding, racing and betting sectors of the industry is given in the commission's report. A valuable economic analysis of the racing industry is also given and statistical data and information are compiled in the appendices. The report, of course, contains many recommendations. Most of these are for consideration and implementation by the bodies or organisations directly concerned and are not a matter for the Legislature or for Government: others require Government decision and subsequent legislation.
Lord Killanin and his colleagues in the commission are to be thanked for the thorough and comprehensive study they made of this important sector of the economy. Likewise, many individuals and bodies who assisted the commission in their work must be thanked for their helpful and positive approach.
The report was published in July 1986 without commitment on the part of the Government in order to stimulate public debate on the issues raised. The various interested bodies in the racing and breeding sectors were asked for their views on the report in general and also on those recommendations which directly affected them. As I said earlier, this debate in the Houses of the Oireachtas will have a major bearing on the Government's thinking on this matter and is being held at an appropriate time in view of the fact that the Government are actively considering the report.
Ireland has a long tradition of breeding racehorses and indeed the thoroughbred horse is perceived abroad as an element in the country's identity. The breeding industry has prospered in recent times with output and employment rising. The more traditional element in the breeding industry is long established as a part of Irish farming where, typically, the farmer keeps one or two mares producing foals for flat or national hunt racing. Over the years breeding has developed successfully and now also consists of stud farms with a large number of mares and stallions of all classes in addition to smaller breeders.
In terms of climate, availability of labour and management skills, Ireland possesses natural advantages as a centre for thoroughbred breeding. There are a number of others areas in the world which enjoy some advantages and, as a consequence, there is strong international competition for business in thoroughbred breeding. Nevertheless our advantages and achievements in breeding, training and racing are such that we can face the future in this industry with confidence. While many individuals have succeeded and put the name of Ireland prominently on the map I feel the extraordinary achievements in the national hunt and flat of Mr. Vincent O'Brien as a trainer are worthy of special mention. Ireland will always have a prominent place in the thoroughbred industry when individuals of Vincent O'Brien's calibre are involved.
The structure of the industry reflects the uncertainty inherent in racing. The risks of stallion ownership are systematically spread by the practice of syndication. Typically, 40 shares in the stallions are allocated, each share carrying liability for one-fortieth of the cost. However, there are many kinds of syndication arrangements, but the essence of all of them is the spreading of risk.
Mare owners are also exposed to substantial risks. Only 53 per cent of mares bred worldwide produce live foals. A mare owner, who breeds a foal and keeps it for racing is exposed to further risks. Most breeders dispose of the horses they have bred as foals or yearlings, thus realising cash to finance their activities and off-loading some of the risks. People who purchase foals for subsequent sale as yearlings provide another source of liquidity in the bloodstock market. Most yearlings are sold into training establishments. Between mares and stallions, about 7,000 horses are involved in the Irish thoroughbred breeding industry. The industry is characterised by large numbers of breeders with just one mare. There were over 2,000 of these, out of a total of nearly 4,000 breeders.
Most stallion studs have relatively few stallions. At present, it is estimated that about a dozen studs in Ireland have four or more stallions standing. The vast majority have one or two.
Let me say a word on the Equine Centre. Equine diseases can have a devastating effect on breeding and racing stock. There are many diseases with which breeders have to contend which call for investigation and diagnosis. The Equine Centre fulfils this need. Its brief is to deal with disease problems as they arise, and its facilities are available, through veterinarians, to those engaged in thoroughbred breeding, racing, show jumping, eventing, hunting, pony clubs and all other equestrian activities. The Equine Centre was an initiative of the Irish breeding industry itself and it has been funded entirely by the Irish racing and breeding industries. They deserve our congratulations and appreciation for taking this very worthwhile initiative.
The Irish National Stud was set up under the National Stud Act, 1945 and given power to operate special schemes for improvement of thoroughbred breeding. In particular, it attempts to make available good stallions at reasonable stud fees to the smaller breeder. In addition, the National Stud pursues a programme of activities which include: (i) standing its stallions at public studs; (ii) providing training courses for the various categories of stud-farm personnel — the stud management course attracts students from all over the world; (iii) the provision of certain services to the industry, including a foster mother service, a plasma bank, and the promotion of research into equine diseases.
In regard to the racing industry attendances at race meetings increased steadily from 1950 to the middle of the seventies. However, there has been a fall-off since. The rise in attendances was accompanied by a substantial increase in the number of race meetings and in the average attendance at each meeting. The subsequent decline has been reflected, primarily, in a drop in the average attendance rather than a reduced number of meetings. Racing is a significant attraction for visitors. Many of our summer race meetings are patronised by tourists and the introduction of Sunday racing creates an additional opportunity.
At present there are just over 350 trainers involved in the racing industry. Many of these have relatively small stables. Sixty-seven per cent of all trainers have ten or less horses to look after. In addition to trainers, the racing industry employs jockeys, apprentices, stable staff and those employed by the racing authorities and the racecourses. There are close to 5,000 full time equivalent jobs in the racing industry. That is a measure of its importance to the economy generally and no doubt its potential to create even greater employment is a matter that will concern Senators today in the follow-up to this report.
There are 28 racecourses in the whole of Ireland — two of which are in Northern Ireland and 26 in this State. Most are privately owned and are run by committees or as private companies. However, three of the courses, Leopardstown, Navan and Tipperary, are either wholly or partially owned by the Racing Board, while the Curragh is owned and run by the Turf Club.
The "holiday" courses hold relatively few meetings but achieve an exceptionally high turnover per meeting. This is particularly true of Galway and Listowel. Galway, in fact, despite having only nine race days a year has the third highest annual turnover following Leopardstown and the Phoenix Park. Between them, the "holiday" courses and the Dublin area courses account for over 51 per cent of all turnover. Facilities for the racegoing public are indeed inadeqaute at many of the racecourses.
Let me a say a word on the organisation of the racing industry. The governing bodies, comprised of the Turf Club and the Irish National Hunt Steeplechase Committee (INHSC), administer the rules for flat and national hunt racing respectively. Both are voluntary bodies and elect their own members.
The Racing Board, established under the Racing Board and Racecourses Act, 1945, is the principal instrument of State involvement in the industry. It collects the on-course betting levy and operates the on-course tote. The proceeds fund the board's own activities and are the major source of finance for prize money in horse racing.
I now want to turn to deal with the actual recommendations contained in the report. As I have already indicated, I hope Senators will appreciate as the matter is currently before the Government I will not be able to make a definitive statement in advance of full Government consideration of the matter. I cannot anticipate the outcome of the Government's discussions and I would not want in any way to cut across collective Cabinet responsibility, in which I am involved, by directly conveying my own personal impression. Having said that, I feel free to give my own personal and ministerial impression on a number of important areas, even in advance of Government consideration of the matter. No doubt the Government response will at least take account of the views expressed here this afternoon.
The report contains 123 recommendations of which 32, if implemented, would require amending legislation. Responsibility for action on many of the recommendations currently lies with a number of bodies such as the Racing Board and the governing bodies of Irish racing.
The main recommendation of the report is the setting up of a Thoroughbred Industry Board to replace the Racing Board. It would: (a) have responsibility for planning, financing and developing racing and the development of an ongoing strategy for breeding; (b) have power to establish subsidiaries and be given responsibility for the National Stud, the totalisator, a new racecourse management company, The Irish Equine Centre, the Racing Apprenticeship Centre of Education, RACE; and (c) be financed by on and off-course betting.
I am not certain that having one body with responsibilitiy for all aspects of the industry would be necessarily in the best interests of the industry. The breeding sector has very different demands in terms of expertise, advice and information needed in contrast to those of the racing sector. Placing responsibility for these very diverse needs under one body may not be highly desirable. Successful private bodies such as the Irish Equine Centre and the Racing Apprenticeship Centre of Education should not be absorbed into the public sector and be a charge on public funds. Senators will note that in general the Government are going in the other direction. I am satisfied that they operate very successfully under private funding. I consider that the Racing Board and the National Stud should retain their identities and continue to decide their own priorities, policies and courses of action for the two quite distinct sectors of the industry for which they have responsibility. The National Stud has a good record as a commercial State company and has operated in a satisfactory manner under the statutory restrictions imposed on it. It should, therefore, be left as an independent State body. All in all I do not favour the adoption of the concept of a single Thoroughbred Industry Board.
It is, however, appropriate that the Racing Board be reconstituted with a view to becoming more effective in the implementation of its functions. I am considering how this can best be achieved and hope to be in a position shortly to outline proposals in this regard. The recommendations for the governing bodies are matters for themselves and I do not propose to comment on them.
The report recommends that the National Stud should set charges at rates prevailing in its area and have its borrowing limit increased to £5 million. The National Stud was established under the National Stud Act, 1945, to provide good-class stallions at a reasonable fee to the small farmer-breeder. Were it not for this policy many small breeders who are the lifeblood of the breeding industry would be put out of business because they would be unable to afford the service fees charged by private studs. For this reason I consider that the stud should not implement the recommendation that it should charge stud fees at the rate prevailing in its area.
The National Stud has operated quite successfully. It provides necessary advice and help on aspects of horse production and also runs a very successful course in stud management. It is desirable that the stud should be given every chance to operate in the commercial market place. It is inhibited in this regard by the fact that its borrowing capacity is limited to £0.5 million at any one time. I am, therefore, in favour of the commission's propoal that the borrowing powers of the National Stud be increased from £0.5 million to £5 million.
The recommendations on breeding raise complex and legal questions relating to a system of registering legal title to thoroughbred horses, reviewing the Agricultural Credit Act, 1978, to facilitate borrowing against bloodstock, registering all charges against bloodstock in a central register for bloodstock mortgages. These recommendations require further detailed examination particularly with regard to the legal considerations. I am in favour of the recommendation that the suffix IRL be used to identify Irish horses. I am happy to see that the bodies with responsibility in this area are endeavouring to have this recommendation implemented.
My colleagues and Senators will appreciate generally that the primary responsibility for taxation within the collective responsibility of Government is obviously for another Minister. I must bring the attention of the House to that fact. Recommendations on taxation relate to taxation of Racing Board grants for the improvement of racecourse amenities, exemption of stallion nominations, the provision of stock relief, the level of off-course betting, taxation of on-course betting.
The recommendation that 2 per cent of off-course betting should be returned to racing and that the level of off-course betting duty be held at 10 per cent would have serious implications for the Exchequer. Currently this would cost £4 million per year. Recommendations on taxation have serious implications for the public finances and I do not propose to comment further on them at this stage as taxation is a matter for the Government as a whole when framing the budget. I will certainly bring the recommendations and views expressed by Senators to the attention of the Government and, in particular, the Minister for Finance. The recommendations relating to racecourses highlight the need to improve the facilities and amenities at Irish racecourses. I am confident that many of these deficiencies identified by the commission will be improved in the near future.
In order to facilitate the Racing Board to meet its obligations I consider that its borrowing power should be increased significantly from the current level of £20,000 which was set in 1945. I am prepared to take action to implement that. The recommendations on the rules of racing are a matter for the governing bodies of racing.
The commission recommended that 2 per cent of off-course betting should be returned to racing. I have referred to the implications of this when discussing taxation. On the recommendations to establish the tote as an off-course betting medium, I am not convinced on current level of off-course betting that this is the appropriate time to do it. I feel that such investment would not be a commercial success. The same would be true for telephone betting as experience to date would seem to suggest. The level of investment required is high and a commercial failure would have serious adverse consequences for the Exchequer. As to a computerised tote system at racecourses, phase one is already operational at Leopardstown.
The recommendations on bookmakers and bookmakers shops relate to improving the facilities offered at betting shops, improving the appeals procedure, control of bookmaker admission charges, disputes between bookmakers and bettors. The current procedure for hearing bookmakers appeals can lead to long delays before the hearing is held. The number of members on the appeals committee is three. In order to improve the whole procedure and reduce the time delays I consider that the appeals committee should be increased to five with a quorum of three. I will be taking action shortly to implement that.
I also consider it appropriate that the present control on admission charges to racecourses for bookmakers and their assistants should be reviewed. The current control relates bookmakers' entry fees to admission charges for the general public. A better system would be to arrange a fixed charge which would be subject to annual review. I also consider that a body should be established to arbitrate on disputes between bookmakers and bettors. This might be done by extending the powers of the appeal committee. This is generally in line with the Killanin report.
Sunday racing has been introduced by the Racing Board. Every effort should be made to maximise the potential offered by this development towards attracting more tourism and improving the industry in general. The provisions of the Intoxicating Liquor Act which prevent alcohol from being sold at most Sunday race meetings can be considered in the context of the continuing general review of the Liquor Acts.
Many of the other recommendations made by the commission are matters to be considered and implemented by the Racing Board, the governing bodies and other bodies and organisations in the industry.
The report of the Killanin Commission has focused our minds on the issues currently demanding attention. There are some recommendations which require Government decisions and subsequent legislation. A memorandum on these recommendations is already prepared by me and will be considered formally by the Government in the very near future. It might well be that, but for the absence of the Taoiseach in Australia and New Zealand these days, it would be on the Government agenda this week. Senators will be aware of the fact that the Taoiseach has a very lively interest in this whole area and I do not propose to take decisions on this matter in his absence. That would, to say the least of it, be inviting a degree of criticism, and problems.
Since the publication of the report, I have given approval to the Racing Board for the setting up of a subsidiary company for the purposes of: operating the three board owned racecourses at Navan, Leopardstown and Tipperary; providing management, training, computer and consultancy services and facilities in all aspects of horse racing to interested parties; setting standards for all authorised racecourses and for the monitoring of them; and assessing racecourses which apply to the board for grant assistance to ensure the limited resources of the board are utilised in the most effective manner.
I consider that the establishment of this subsidiary company, together with a £500,000 grant for the refurbishment of racecourses as a means of increasing tourist numbers and revenue, will go a considerable way towards meeting the industry's needs as regards racecourses. That is very much in line, as Senators will appreciate, with the recommendations of the commission. The Government in deciding to make such a major allocation to the improvement of the racecourse facilities from the lottery funds are giving a clear indication of our acceptance of that priority.
Finally, the Government will, in the very near future, be considering many of the report's recommendations — at least those that are relevant to us in Government. While I cannot pre-empt Government decisions, I can assure the House that, where legislation for the implementation of any of the recommendations is required, it will be implemented as quickly as possible. I should like to thank the House for giving us the opportunity to make this general statement.
I would like to second this very important all-party motion, that Seanad Éireann takes note of the Report of the Commission of Inquiry into the Thoroughbred Horse Breeding Industry, generally and rightly known as the Killanin Report, 1986. The commission was set up by the former Minister for Agriculture, Deputy Austin Deasy, to examine all aspects of the industry. The report is divided into three broad areas, breeding, racing and finance. I welcome the practical suggestion, mooted by Senator John Magnier, for the setting up of an Oireachtas group to examine the urgent needs and requirements of the industry and to facilitate the implementation of the recommendations contained in the Killanin report. It was Dr. Michael Smurfit, chairman of the Racing Board, who said in the course of the 1986 annual report of the Racing Board:
Our aim must be to provide opportunities whereby our best horses remain in training in Ireland, race in Ireland, and are enjoyed by race goers experiencing the best racing and social facilities possible.
That statement sums up in a nutshell two of the central and most important recommendations of the Killanin report when it states:
Racing and breeding should be promoted and developed by one authority, and a programme for the upgrading of amenities to be financed by a special levy on off-course betting should be implemented.
That Commission of Inquiry, which was chaired by Lord Killanin, in their report underscored the fact that racing and breeding are totally inter-dependent. It is not widely recognised just how important racing and thoroughbred breeding are to the Irish economy. This can be seen from the fact that 12,000 people are employed through racing and breeding. In Ireland the industry has a greater share of the Gross National Product than any other country in the world.
Indeed, Tony Morris, a top English writer on bloodstock has described Ireland as, "now assuredly Europe's leading stallion base". Jonathan Irwin, managing director of Goffs, Ireland's premier bloodstock sales company, stated that, "we have proved that our prices are as good as any in the world and we attract all the world's top bloodstock buyers". Income from racing sponsorship has increased considerably in recent years. The Budweiser Irish Derby is the richest classic ever run in Europe and Derby Day is one of the richest ever race days. In fact, more than £1 billion has been invested in the industry and in many of the technical areas of racing and thoroughbred breeding. We have, indeed, an indigenous industry of world class.
Unfortunately, in one important area, that of amenities and facilities which are available at our racecourses, we lag behind our international competitors. Apart from the fact that our racegoers deserve better, attendances will suffer if we do not invest in amenities and facilities. There is, as the Minister for Agriculture and Food has indicated, a contribution that the industry can make to the tourist trade both from the point of view of publicity gained abroad and from the attraction it provides for tourists. Unless a programme of investment in racecourse infrastructure is undertaken immediately, attendances will drop with a consequent effect on breeders who rely on our racecourses as showcases for our important breeding industry which now produces more thoroughbred foals per annum than does Britain.
In this connection I should like to welcome the comprehensive programme for the provision and development of facilities and amenities in Greenpark Racecourse, Limerick, recently formulated by the Limerick Race Company which will involve, in partnership with Shannon Free Airport Development Company, the provision of an exhibition and conference centre, a small business and holiday park and extensive car parking and other essential facilities. I should like to appeal to the Government, and to the relevant Ministers, including the Minister for Agriculture and Food who has many connections with the mid-west region, to give this unique project and partnership every support and assistance by way of Government and European funding.
The Killanin report states:
Horse racing is a sport, and it is part of the entertainments industry, and as such the provision of satisfactory facilities and amenities on the racecourse for racegoers is a necessity. The prevalence of inadequate services and substandard amenities on Irish racecourses has been a recurring theme in the submissions received by us and while services remain inadequate the racing industry has little hope of attracting new patronage to the sport.
To rectify the position the Killanin report called for a programme of investment to be financed by a special levy of 2 per cent on off-course betting. The report has pointed out that Ireland is, indeed, the only one of the major racing countries where racing does not benefit from the proceeds of betting off-course. However, in the light of developments since the publication of the report it would appear that a 1 per cent special levy would be sufficient to finance an amenity programme over a period of, say, ten years. This levy would enable the Racing Board to carry out a planned development programme over that period and would give a meaningful employment in the construction industry.
At the moment horse racing in Ireland receives no share of the tax revenue yielded by off-course betting, and I believe that a 1 per cent levy would be a great help to our racecourse executives. In all the principal racing countries a proportion of the tax raised from off-course betting is returned to the industry for its development. For example, in Britain the Betting Levy Act, 1961, introduced a levy on off-course bookmakers and established a statutory body to collect and distribute it. It should be noted that Irish betting shops which were legalised as far back as 1926 were used as an example by the British authorities when considering the legalising of high street betting shops in Britain. This levy has been used in Britain to improve prize money, to fund improvements to racecourses and, indeed, for a variety of other important purposes.
Ireland, as the Minister has rightly indicated, has a long tradition of breeding thoroughbred horses. The thoroughbred horse is perceived, as the Killanin report indicates, as an element of our country's identity. The more traditional element in the breeding industry is long established as part of Irish farming where typically the farmer keeps one or two mares to produce foals for flat or national hunt racing. Over the years breeding has developed successfully and now consists of not alone the traditional breeding farms but also stud farms, with a large number of mares and stallions of all classes.
In terms of climate and the availability of labour and management skills, Ireland possesses natural advantages as a centre for thoroughbred breeding. However, our circumstances are by no means unique. There are a number of other areas in the world which enjoy comparable advantages. There is, of course, at present very strong international competition for business in the thoroughbred industry. There is also an unfortunate widespread misconception in some quarters that thoroughbred breeding and profits from stud farms are in some sense exempt from taxation. This, of course, is not the case. Breeding in Ireland is taxed as an agricultural activity with one important exception and this relates to the income directly generated by stallion nominations and forms a major part of the income generated in the commercial stud sector.
Since 1969 this category of income has been exempt from income tax and corporation tax. It is now generally accepted that, without this very important exemption of stallion income from tax, most of the top stallions in this country would not have come here in the first place. This point has been very forcibly put by Pat Fitzgerald of Allied Irish Investment Bank in a recent article entitled Banking on Bloodstock, a Major National Opportunity when he stated:
The thoroughbred horse is a highly saleable and easily transportable asset. The foreign investor in a stud farm in Ireland may have land assets worth £½ million and bloodstock worth £20 million. It would be an easy decision to relocate in another country. That would be a tragedy as bloodstock breeding is a growth sector capable of creating wealth and additional employment.
The location of the best stallions in Ireland is the single most important factor contributing to the success of our Irish bloodstock industry. It is no wonder therefore that the Commission on Taxation in their second report recognised the value of this important exemption to the industry and recommended that the exemption be continued.
The Killanin report recommended that the exemption of the stallion income from tax should be continued and that the position should be strengthened to give the industry better stability by including in the next Finance Act a provision that the exemption will stand for at least the period, say, up to the year 2000. This would give a measure of security especially for new syndications where the stallion might have a productive life of, say, 15 to 20 years.
On improving general facilities at racecourses the Killanin report recommends that priorities should be given to the provision of special facilities for the disabled and the elderly and, where feasible, that racecourses should have a service road to allow ambulances access to the track. Racecourse executives should make every effort to improve the standards of catering and the improvement of stabling should be accorded a high priority. The Killanin report states:
The poor quality of catering at many racecourses featured prominently in submissions. We recommend that racecourse executives should make a renewed effort in this area which is a recurring source of adverse comment.
Finally, Lord Killanin, in a foreword to this report, states: "The implementation of the recommendations in the report will help to achieve the full potential of racing". It is important, therefore, that this report should not be pigeon-holded and that the Government should implement without delay as many as possible of the central and main recommendations contained in the report.
I would like to express the thanks and the congratulations of this House to Lord Killanin and the very dedicated and widely representative members of the commission who produced such a fine and excellent export. I formally second the motion proposed by Senator Magnier and I fully support it.
I would like to take this opportunity to say how honoured I was to accept the Taoiseach's nomination to this House and how pleased I am to be here to promote and represent the views of the bloodstock industry. That is the role I see for myself and will continue to pursue as long as I am here. In addition, I would like to take this opportunity to pay tribute to Lord Killanin for the excellent work he has done for all aspects of the thoroughbred industry. I would like to pay tribute also to the other members of the commission, all of whom made an enormous contribution to the production of the final report. I welcome the opportunity which we have today to debate and discuss the thoroughbred industry and its future and I looked forward very much to hearing the views and contributions of my fellow Senators.
Having been here for a year and a half I am very glad to be able to debate the horse industry. In future perhaps more time should be given in both Houses to what is a very important industry. It is very much tied to agriculture and it is a very important sector within agriculture. The thoroughbred industry is one of Ireland greatest assets. Irish horses have a well-earned international reputation. Our climate and our natural resources and amenities are also conducive to the successful breeding of top class horses and, most important, the natural ability of Irish people is well recognised and speaks for itself.
The industry has created jobs across the entire spectrum of the employment scale including veterinarians, agents, auctioneers and sale companies etc. We now have young people of world class calibre with a wealth of experience and acquired knowledge which forms an ideal base for the future expansion of the industry. In addition, the Irish bloodstock industry is among the most innovative in the world. The recent establishment of the Irish Equine Centre, working in conjunction with similar organisations around the world, will help to provide the industry with the technical expertise necessary for future development. As pointed out by the Minister, this was funded completely from within the industry.
It is important to emphasise that, where possible, the industry has generated funds internally to provide the necessary tools for expansion. The Irish Equine Centre is a prime example of that. We are also fortunate in having sales companies and bloodstock agencies of a high standard. These companies have invested the capital necessary to assist in selling and exporting Irish bloodstock. In fact, they operate all over the world and we are very fortunate to have them based in Ireland.
As well as relaying on its natural advantages the Irish industry has also had support from successive Governments. The tax concession introduced in the Finance Act, 1969, marked the real beginning of the development of the bloodstock industry in Ireland. This was brilliant legislation and, at no cost to the Exchequer, allowed the bloodstock industry to become a world force. The net effect of this has been to create something out of nothing. The Exchequer has backed a real winner in terms of its return on investment made. I will return later to this matter and will refer to the current problems. We should bear in mind that the Exchequer is now reaping the added value and all the related downstream activities from something which would not have come here otherwise.
The combination of natural advantages and State goodwill which is essential for the success of any venture has enabled this country to build up a strong and vibrant domestic thoroughbred industry of international importance. Out of the top ten stallions currently active in Europe, five are standing in Ireland. In addition, many of the top stallions which in previous years would have gone to stud in the US or Europe are now standing in Ireland. This is not only as a direct result of the level of investment, both domestic and foreign, which was promoted in the industry during the seventies and early eighties but also relates to the natural affinity of Irish people to work with the horse. We are now really beginning to reap the benefit and it has been a slow but positive growth pattern.
The industry also made a major contribution to our economy in an era when many of our traditional industries were in decline. This contribution can be seen in a number of areas, including employment. The Killanin report estimates that the thoroughbred industry employs 10,000 full-time workers, 10,000 part-time workers and several thousand others who are indirectly dependent on bloodstock for their livelihood. We should remember always that these jobs are mainly in areas where employment opportunities are extremely limited and where skills are passed on at no cost to the Exchequer.
I should also point out the importance of the fact that a large number of farmers also rely on bloodstock breeding as a secondary source of income. This is especially true in the area of the National Hunt, which is where we have had our most traditional success, whereas the upgrading of our flat racing and breeding to international levels has been more recent. This is particularly important in the current climate of quotas for milk and grain and maybe more quotas to come. This is an industry in which there are no quotas and where we have the raw materials, the people and the facilities to produce the goods.
The State also receives a direct financial contribution from the racing industry by way of a 10 per cent tax on off-course betting. In 1987 this represented a contribution of £19.5 million on a total betting turnover of £214 million. The industry also contributes high value-added exports and foreign exchange earnings. Additional taxes are also generated within the breeding industry itself and from other spin-off industries, for example, the construction and transport industries, suppliers of agricultural produce and feedstuffs, professional and other service industries, to name but a few.
There is a problem which I believe is a major weak point in the industry. This was highlighted by the Killanin report and relates to the fact that the Irish racing industry is extremely weak, both in terms of finance and facilities. The report concluded that the prospects of the industry developing further are non-existent under the current structure. The reality is that many of the racecourse buildings are falling down and are generally in an unsafe condition, giving rise to health and fire regulations problems. This is neither the fault of management nor a problem which can be solved within the industry; it is because of the way the system is currently structured or, to put it another way, it is a matter which the Minister and the members of the Cabinet have to fix.
The Minister referred to the fact that many of the other recommendations in the report are matters for the internal bodies of the industry. He rightly pointed that out and, of course, a lot of action has been taken in many areas, but the industry is not in a position to fix the main problems.
The lack of finance has a two-fold effect and can immediately be seen by visiting the majority of our racecourses. Nearly all racecourses are not commercially viable. They are unable to generate funds to modernise facilities and must, therefore, rely on sponsors and the Racing Board. I repeat that this is not the fault of the management or the industry as a whole; it is the fault of the system.
In 1987 the Racing Board's contribution of income to the racing industry amounted to £4.2 million and, of this, £2.9 million went in prize money. Only £460,000 went to development grants for racecourses and spread over 26 courses in the Republic this gives an average grant per course of approximately £17,500. Even a three-card-trick man could not operate on those numbers. I have experience of the effect which this is having on the Irish breeding industry. Racecourses near Fethard, including Limerick city, Tipperary, Clonmel, Thurles and Mallow, have facilities which are a long way below comparable courses in other countries. Foreign owners who visit some of our venues once to see their horses run, are reluctant to make a return visit and we often get a "Don't call us, we'll call you" response. This could not be more serious because the next step is that they will relocate to a more suitable and profitable environment. We may not see these people again and the country as a whole will lose out. This will be after the trouble of getting them here in the first place.
One Senator who spoke painted a very rosy picture of Limerick city. It was far too optimistic a picture and unless the Government can do something about giving some help to racing this will remain a pipe dream. The people of Limerick, in the future, may be watching their racing from a tent because as I see it, the buildings are about to fall down and, in fact, one building there has been already condemned. Some drastic action will have to be taken if we want to improve our racecourses.
The second area of weakness relates to poor prize money. This is an important aspect if more top-class horses are to remain in Ireland. It is especially important given the internationally mobile nature of the industry and the extent to which other countries have invested in and developed their bloodstock industries. Prize money determines the quality of our races in the relative pattern of international racing and we must keep pace with our competitors. We must make no mistake about it: racing is an international business and we are in direct competition with other countries. Some improvement has been made in recent years on the prize money front. However, drawing a conclusion from this can be very misleading. I believe that the growth in prize money is not sustainable as to some extent it is generated by one-off short-term sponsorship deals and the resourcefulness of some people in the industry. It, therefore, gives the entire prize money areas a false perception of success and, when judged against what the rest of the world has to offer, it stands out as the weakest in a very conspicuous way.
These weaknesses are serious in that structure of the entire bloodstock industry is such that a weak racing industry has implications for all other aspects of the industry. Strong racing encourages foreign owners who have bred in Ireland, to keep their horses here, giving rise to future strength in the industry and it helps all other sectors of the economy as well. We need to get people to come to Ireland in the first place so that they can become investors in and buyers of Irish bloodstock and potential ambassadors for the whole industry and the country. Every product needs marketing and Irish racing is the shop window for the entire bloodstock industry. The quality of our races, the worldwide reputation they have acquired and the continued worldwide coverage of that is something which benefits the entire industry in Ireland.
We need to be conscious that the bloodstock industry is an internationally mobile asset and that if we allow our domestic racing industry to decline our traditional dominance in the industry will be lost to other countries which have not been so negligent. This would have serious consequences not only for the Irish bloodstock industry but also for the wider economy. We cannot afford to stand still as this means we are constantly losing our position to our competitors. If we lose our worldwide standing the Irish bloodstock industry will become a third rate industry with reducing export potential and an inability to retain and attract foreign investors and will, of course, mean an obvious reduction in employment opportunities. To date we have been propping up the racing industry on a temporary basis with grants, one-off sponsorship deals and various other fire-fighting methods. This is not workable and is totally unnecessary.
Given the limited resources we have as a nation, any solution would have to ideally balance a number of factors: it would have to be self-financing from an Exchequer viewpoint; have immediate impacts which would be visible; secure the future strength of the entire bloodstock industry; by improving the facilities thus making racing a sport for all, irrespective of wealth or position, have wider benefits for the entire economy and for the quality of life in the country as a whole; be easy to implement and involve only a minor restructuring of the current legislation governing the racing industry.
I want to refer further to the proposed solution. As I previously mentioned, there is a 10 per cent rate of off-course tax which generates close to £20 million in revenue. I would propose to reduce the current rate of tax on off course betting from 10 per cent to 7.5 per cent and, of that 7.5 per cent, 1.5 per cent could be channelled directly back into the racing industry. The proceeds would amount to £3 million or £4 million and would be used urgently to improve racecourse facilities and, over the longer period, to make improvements in the prize structure. If this were to happen, I am confident that the impact would be worthwhile and immediate. I believe that such a contribution would fund a substantial building programme, which could be immediately started.
Investment in improved facilities does result in increased attendances at race meetings. The evidence for this comes from the recent experience of the Leopardstown Race Course. When Leopardstown was rebuilt by the Racing Board, there was a rise of 50 per cent in attendances.
Increases in racing prizemoney will not only encourage owners to keep their top quality horses in Ireland, but will retain the international status of our races abroad and, like every other entertainment industry which needs a stage or shop window, racing provides the major international marketing focus for the industry. As well as coping with the direct problem, such a proposal would have very many benefits, both to the bloodstock industry and to the wider economy. The resultant improvement in facilities will strengthen the racing industry. This will have a knock-on effect on the breeding industry and more top horses will come to and remain in Ireland. In addition, a strong bloodstock sector is very important to the national interest. This was highlighted by the Killanin report in its comments on employment levels and the fact that the sector is international in focus — total foreign trade in the sector in 1984 was estimated at £114 million.
Racing is also a sport and like any other sport when you achieve international success, it helps to build a sense of pride in the nation as evidenced by our recent success in the European football competition and other sports such as the success of Barry McGuigan, Stephen Roche, Seán Kelly, Eamon Coughlan, John Tracey, to name but a few.
The industry is also a valuable source of foreign exchange earnings and makes a major contribution towards the image of Ireland abroad. For example, it is impossible to quantify the value of the Budweiser sponsorship and its international projection of Ireland abroad. Bloodstock is one area where Ireland has the ability and potential to become a major world player. We must exploit this potential to the full for the benefit of everybody. The consequences of not doing so are too serious to ignore. There has been a lot of talk about 1992, but 1992, after all, is a two way street. People can come here and horses can be brought here but on the other hand, people can also leave and go elsewhere. It is not all good news. We have got to be vigilant.
The horse breeding industry is already at a level to generate and support high quality employment. This extra employment would be important in that, not only is it high quality, but it is focused in rural areas, areas which have not benefited as much under other employment schemes and under the urban renewal schemes specifically designed to promote inner city development.
Acceptance of that proposal would also have an immediate effect on employment in the construction industry at a time when construction in general is still depressed. It would have knock-on effects in terms of increased VAT, PAYE, PRSI contributions and reduced dole payments.
Tourism is a major growth sector internationally and with the shortening of the average working week, the increasing amount of leisure time available and the increasing disposable incomes, it is the sector which will make an increasingly important contribution to the economy of Ireland in future years. Racing has an important contribution to make towards tourism and as an attraction for visitors to Ireland, as for example, Ascot, Cheltenham, York and Liverpool attract visitors to England. A vibrant domestic racing industry will encourage many Irish racegoers to remain at home and spend their money here, rather than go abroad. It will encourage people to come to Ireland. We cannot guarantee the weather, but given the right financial environment, we can guarantee successful racing festivals.
Research carried out by the Racing Board into the popularity of Sunday racing showed that the meetings at Navan, Leopardstown and the Phoenix Park drew an average of 9 per cent of their attendances from Northern Ireland alone. The potential for racing to attract tourism has long been recognised with many local festivals using race meetings as their centre point. Consequently, a revival of the racing industry will give a major boost to the tourist sector and this will have a knock-on effect on all other sectors.
Much has been said about 1992 and rightly so. Given the right investment, there is no reason Ireland cannot become the home of racing and bloodstock in a Europe of over 300 million people. The possibility of creating an export betting market should not be overlooked. The reduction in betting tax to 7.5 per cent would make betting in Ireland a more attractive proposition for overseas punters. Rates would then be lower than our nearest competitor, the UK. The attractiveness of betting in Ireland will be assisted by the fact that it is now possible, with the advent of satellite TV, to view live racing as never before. The removal of barriers on cross-Border transactions now planned to take effect in 1992, will make the timing of reforms all the more opportune. A reduction in the rate of taxation would also have the effect of reducing the amount of illegal betting which is still taking place.
I mentioned earlier that the racing industry should get 1.5 per cent of the 7.5 per cent, that is 20 per cent of turnover. What I am really saying is that racing needs that 20 per cent regardless of what the turnover may be. The reduced figure of 7.5 per cent is a figure which I believe is in the best interest of everybody and could help turnover. This proposal could be implemented with negligible overall cost to the Exchequer and the immediate gains from such a project will be very visible. The direct effect on the Exchequer would be that their share of the off course betting receipts would be reduced from 10 per cent to 6 per cent. However, it must be remembered that the likely effect of this would be much less and, even ignoring the potential for gain on turnover, it would result in an overall gain to the Exchequer.
In 1985 the levy on off course betting was reduced by 50 per cent, from 20 per cent to 10 per cent. Total betting turnover increased by 60 per cent between 1984 and 1986. I believe that there is room for similar expansion now.
There will also be other benefits to the Exchequer. Lower tax rates leave punters with more money to wager, increasing total betting turnover further. There would be a gain by way of PAYE and PRSI on extra employment. The recycling process of the money involved would result in additional VAT and increased taxes on profits, both within the betting industry and in related industries. In other words it would benefit everybody as well as the Exchequer. What I am really saying is that we should circulate this money for the benefit of all before it gets back to the Exchequer and on its way back I think it will collect some more. Everybody can win in the long run. The investment spread would result in jobs being created throughout the country and the industry would have the immediate confidence to borrow the money required to put them in place.
There is a popular mistaken conception that the horse industry is completely tax free. This ill-informed and sometimes publicly paraded concept has, I feel, damaged the image of the industry at home and abroad. Apart from the concession in the 1969 Finance Act, the industry receives no other benefits. This concession to breeding involves very little actual cost to the Exchequer, since much of the breeding activity would relocate abroad in the absence of the concession and would not have come here in the first place without this benefit. In fact other countries with a supposedly more hostile environment are investing more in their bloodstock industries than we are. Our nearest neighbours, England, have a situation where there is no on course betting tax and parts of the industry can benefit from the small business expansion schemes. They generate in excess of £20 million from a betting levy which goes back into the industry. They also have the considerable advantage of lower overall tax rates with resultant higher disposable income and favourable investment opportunities.
Support for racing should be set in the context of economic development policy generally. Racing and breeding are already a very substantial industry competing in a very competitive international market and making an important contribution to GNP and to the Irish economy in general.
The State supports certain manufacturing activities with grants and profits tax rate of just 10 per cent. Many industries pay less or nothing at all, because of capital allownces and other reliefs. The State also spends substantial capital moneys in grants and other aids to economic development to create jobs in those same sectors. The IDA budget exceeds £200 million and about £30 million is spent annually on tourism.
Thus the case for State assistance to racing is based on the extent of State assistance to comparable sectors of the economy. Racing is part of a broader thoroughbred industry which is competing for its share of the world market. My present proposal will, I believe, give it an ability to do so in future. The racing and breeding industry is internationally mobile and should be seen and treated as an economic sector similar to industry and tourism with an important role to play in the overall economic policy. For a negligible outlay we can now ensure that Ireland continues to play a major role in the international bloodstock markets and that the domestic bloodstock industry can play an increasingly important role in our economy. This industry is one which we know will succeed and expand, given the right conditions, environment and encouragement.
The proposal is not unique. Ireland is one of the few countries where none of the off-course proceeds is returned to racing. In fact, to my knowledge I cannot name another significant racing country that does not benefit in this way. The UK, America, Australia, France and Japan all have such schemes providing a major boost to the industry there and not only to the bloodstock industry but to the overall economy, tourism and the quality of life in general. The Taoiseach who is in Australia will, no doubt, see some of the effects of this himself at first hand.
By comparison with the countries listed above the thoroughbred industry in Ireland is much more significant in relation to our overall economy in terms of GNP. Therefore, a similar programme of finance for this industry will pay higher dividends on a pro rata basis. We have made a major success of our domestic bloodstock industry and built up an industry which is strong and has become a major force in international markets. We have attracted major foreign investors here. The fact that people such as His Highness the Aga Khan, Prince Abdullah, the Maktoum family, Mr. Walter Haefner and Mr. Bert Firestone, just to name a few, have invested here should be a source of pride to us as a nation. We must remember that we have no natural wealth. Whatever wealth is in this country must be got in from outside. We must encourage these people to come here in the first place and when we get them here keep them here for their benefit and in that way to the benefit of everybody. They have all invested significant capital amounts and created continued employment at no cost to the Exchequer and, more importantly are seen as roving ambassadors for this country. By their actions and by being here they help many sectors of our economy.
However, there is a need for us to continue to develop this industry and capitalise fully on the enormous potential which exists within the industry. This need is made all the more urgent by the findings of the Killanin report which highlighted some serious weaknesses within the industry, weaknesses which, combined with increasing international competition, could seriously affect the future health of the industry. The Killanin Commission report contained 123 wide-ranging recommendations, the most essential of which is to put in place a structure for the refining of the industry and to reinvest some of the betting revenue generated. That is a job for the Government, as the Minister said here.
I make no apology for continuing to harp on the financial state of the industry because, if we cannot fix that, nothing else will work. Many of the other recommendations are matters for the various bodies within the industry but the important thing is, as the Minister has pointed out, that it is a matter for the Government. I get great comfort from knowing that a memorandum is now before the Government and I have every confidence that the people around the table will take note of what we are all saying and, again, what the Taoiseach will see on his visit to Australia.
What I am saying is no magical formula or something dreamed up in Tipperary. We must explain it to the people properly and if they do not understand it the first time we must continue to say it. This happens the world over and Ireland is unique in being the only country that gets no help in this way. This country has survived because the people are so good at this. The environment is right and, as a result of various facts I have described, we now have some of the best horses in the world. This is "make up your mind time". The horses are going to stay where we have gone to a great deal of trouble to get them to in the first place. We have gone from a very good national hunt industry to a wide-ranging dual purpose industry. It is really up to ourselves now whether we want to go the whole way or see it disintegrate slowly and consider the tens of thousands of people that will affect.
For example, if a factory around the country somewhere which had cost the IDA many hundreds of thousands of pounds was going to close with a loss of 200 jobs, there would be uproar with people marching and all the media would have hold of it. It just would not go unnoticed. We are talking about something much bigger in the horse industry and it is within the power of the Government to decide whether to help it and make it even better, or watch it disintegrate. Now the thing has been started I have every confidence that we will get a successful conclusion.
I am glad to say that many of the other recommendations have been put in place since the commission first sat. This is all credit to Lord Killanin because when the commission were put in place many people stood up and took notice and by the time the commission's report was published many of them had their house in order. The report really has done a great deal of good. Though it has not been discussed in this House it has had a meaningful effect on the workings of the industry in Ireland and abroad. It is used as a textbook the world over.
This proposal will, I believe, secure the future of the bloodstock industry. It is very important for the tens of thousands of people involved in that industry whose jobs have been built up over the years. As the Killanin Commission point out also, there is an extreme danger if the racing side of the industry does not get what is its right. If it does it will provide many future further benefits to the wider economy and be of benefit to the man in the street.
Do not ignore the warning signs. Sponsorship is drying up. Race-tracks are in a bad state of repair, as I can say with a great deal of knowledge as a result of my membership of the Racing Board. The vast majority of trainers are finding it difficult to make ends meet. Again, just think of the consequences for all the people who work for trainers. It is very labour intensive. You cannot get computers to ride horses, and so on, so it is not the fault of trainers that they are having a hard time also; it is the fault of the system. As I have said, the world over is completely different from Ireland. This is the only country where they do not get a fair crack of the whip.
Up to now previous Administrations may have been reluctant to take such a step as they feared it would have been seen as pandering to a particular section of the community, whereas in reality it would have substantial employment and quantifiable national benefits. It would stabilise and guarantee the jobs for thousands of people already involved in the industry. To me it is as basic as having a line of ESB poles and trying to turn on the light while the connection between the two in the middle is missing. In other words, we are 95 per cent of the way. Everything is in place. The stakes are high. There is an easy solution; just urgently take the last logical step for the benefit of the nation. The alternative, that is, putting it on the long finger, is the road to no town. This is the one industry in which we know we can succeed.
The industry needs immediately at least 1.5 per cent of the off-course betting levy. I explained before that I mean 1.5 per cent of 7.5 per cent, which is 20 per cent of the tax. Regardless of the rate of tax, the industry should get 20 per cent. I believe that 7.5 per cent is an optimum figure. It could help the betting industry, the racing industry and the Exchequer.
This, however, will not resolve all our problems. Much more needs to be done and in this regard. I invite Members of this House and the other House to join me in the formation of a joint committee to examine other issues in detail and indeed, if necessary, to visit the various facilities throughout the country. I will be only too pleased to assist in any way in the formation of the committee and I invite Members from both Houses to contact me with a view to bringing this idea to fruition.
I would like to thank the Minister and his officials for being here and also Lord Killanin.
I call Senator O'Toole. I know Senator Ferris wishes to speak but, on a point of clarification, the rules of the House dictate that Senator O'Toole comes first.
First, I compliment Senator Magnier for a very thorough and comprehensive run-down on the bloodstock industry and for his response to the Killanin report. It is always a great pleasure to hear someone who is an expert in his or her own area speak on that subject. I learned quite a lot from what he said, although I would disagree with some of his remarks.
In general terms, the report we are discussing — The Report of the Commission of Inquiry into the Thoroughbred Horse Breeding Industry — The Killanin Report — I would describe as being thoroughly progressive and absolutely necessary at this time for the bloodstock industry. I hope to deal with some aspects of the report — those aspects to which I can respond as a lay person; I know very little about the bloodstock industry. I know what I learned at Dingle races many years ago and what I have learned since I moved to North County Dublin in the past 15 or 16 years, from watching horses riding out and from visiting stables and establishments in that area. Certainly, the report, in its recommendations, touches on items which to the lay person in the street are very important.
The whole area of betting shop licences has interested me all my life. It concerns me because I am quite likely to have the odd flutter, not too often successfully, but I do invest my money there. Much of the report is directed towards the basics of the bloodstock industry. To my mind, the basic person is the person who bets on a horse. The people who want to place an each-way bet on the 4 o'clock race in Cartmel, or some such place, are the people we need to consider at all times. I know that the writers of the report might perhaps be more interested in directing it purely at the race meetings taking place in this island, but we need to go somewhat beyond that.
The system — and our attitude towards betting — are utterly Victorian and almost moralistic in their approach. I welcome particularly the recommendation in the report that betting shops should be able to adapt to the changing needs and time zones of race meetings. For instance, we have satellite racing now being transmitted from halfway across the world; we have evening race meetings and we have Sunday race meetings. These have taken place and have developed more quickly than our legislation. Our legislation does not respond to those changes. It is inevitable that the changes will take place and take place very quickly.
I remember on my first trip to England as a teenager going into a betting shop on a Saturday afternoon being surprised at the plush seats and a television up in the corner. When I came back I questioned somebody as to why it is that in Ireland bookie shops are usually very badly laid out, poorly decorated, badly in need of a coat of paint and of general improvement. To be fair, it is very hard for them to offer the same facilities as are available in the UK because of our outdated legislation. I certainly welcome the recommendation in the report on that aspect.
I would also like to comment on something that works against the development in the bloodstock industry. One of the things that stop people from going racing is the high cost. It is a very costly day out for a person or a couple to go racing, to pay for the reasonable comfort that one would demand at a racing meeting. The report states that free entry is quite common in many parts of the world. Those courses which have made an effort to attract the general public and the family have been more successful. I do not believe it has to do solely with the question of prize money or of big fields. Even in the last couple of weeks, we had huge prize money for a race meeting in the Phoenix Park, with a very small attendance. We had, conversely — in Dundalk last Sunday, very small fields and a huge crowd. A lot depends on the way something is sold.
I want to point to what I think has been a major error, that is, the weighting in favour of flat racing as against national hunt racing. I am delighted that that matter was addressed in the report. There is much more to it than looking into the need to increase the prize money for the national hunt in order to bring it into line with flat racing. The normal punter who places perhaps a dozen bets in the year responds to names and in terms of flat racing sees the horses as two-year-olds, or might read something about them at the sales before they are even named. If they come from a very strong blood line, one might know something about the background of the horse. We see them as two-year-olds or three-year-olds and the more successful they are, the less likely we are even to see them again.
That, to my mind, is what is wrong with flat racing. Most people cannot remember who won the Derby; and they are far more likely to remember who won the Grand National. It is not just because of the spectacle of the race, it has to do with horses being around longer. National Hunt animals will be running and racing before the general public for six, seven, eight, nine, ten years, or even longer. What has happened is that the industry has taken over from the sport. A successful two-year-old becomes an even more successful three-year-old and after that, the odds against running him as a four-year-old are very high because any defeat as a four-year-old would reduce the stud value of that animal. The sport loses out, for that reason.
I certainly recall when growing up that we used to have what were called cup races — long distance flat races for four, five and six-year-old animals. They always produced great interest. Those cup races have decreased in popularity over the years because there are even fewer of the well known, successful flat racing animals participating in them. Those that do participate in them become folk heroes. It is horses such as Arkle, L'Escargot and all the animals that succeed in the national hunt that live in the folk memory. They are the crowd pullers. I was not at my local race meeting in Bellewstown last week because I was in here, but I heard people——
An Leas-Chathaoirleach
No advertising, please.
I did have a successful wager on a horse from Dingle, Flower from Heaven I believe it was called. In the middle of what is mainly the flat season, the local people would not have gone to the meeting if they were not national hunt racing and racing over jumps as well. They would not see it as a spectacle. The idea of horses running around in a circle is not enough to bring in the ordinary person, although it would bring in the expert. We need to sell the meetings.
I totally support the recommendations and the commitments in the report to improve the facilities at race meetings. I also support the point made by Senator Magnier that many buildings on our racecourses are a threat to life and limb. Unfortunately, it will only be a matter of time before we have a serious accident on one of our major racecourses. That needs to be looked at. However, I have a different opinion as to where the money might come from to do that.
One thing I always welcome in any legislation or discussion in this House is the adaptation of an industry to modern technology. One of the problems of the report is that it is not vehement and strong enough in some of its recommendations. I single out a recommendation that there should be an all weather track, a major asset which would have an immediate return. There are many days in winter when racing is totally closed down in the UK and this country. There is a case to be made for an all weather track which can also be pressed into service at short notice as well as having ordinary meetings scheduled. That should be put into operation as quickly as possible.
The recommendtion that the Aertel service and the Teletex services from the different companies and television broadcasting outlets should be used effectively should be accepted. It is high time that was done and if it was put into operation sponsorship would be available because people need to know the racing results and do check them. Therefore, there is a market there already waiting to be tapped.
It is important to develop the whole idea of closed circuit television even though it is very costly. It could be a successful-subsidiary or offshoot of the racing and bloodstock industry as it is at the moment.
Having said all that, I now come to the part — it is hardly fair to call it modern technology — which the report and the industry funked and to which I have never got a satisfactory explanation, that is the absolute refusal to use artificial insemination in the racing industry. I understand how it works, I do not need the graphic details, but I need to know the thinking behind the lack of commitment to artificial insemination in the bloodstock industry. It is nothing short of crazy, particularly in the national hunt area where good stallions have to be gelded before they continue racing. It seems to be a very clear reason for having semen banks for the bloodstock industry which could be used to artificially inseminate at a later date. I do not understand why it is not done, it is insupportable and we are losing out badly, even in areas beyond racing. The only argument I have ever heard is a lack of trust, that people would not believe that it came from the right animal. That is fair enough but is no different from any other buying and selling. It is a clear case of caveat emptor no matter what the business is. It seems that if a urine sample can be taken late at night in Tipperary and delivered from there safely to Dublin and be identifiable, artificial semination could be similarily checked and followed. I regret that it was not a recommendation.
I have listened carefully to the discussion on taxation. I do not agree either with the section and the recommendation dealing with taxation in the report nor with the comments made by Senator Magnier. The whole taxation of the bloodstock industry is weighted against the small person. If I wanted to put a £10 bet on an animal I would go to a bookie and pay him £11, a £10 bet and £1 tax. I would pay that tax whether I won or lost. That is the worst end of the bloodstock industry. It could be that employees are as badly off and are also paying full PRSI and income tax. Instead of going to the bookies shop. I could walk down to Davy's and invest my £10, if they would accept it in classic thoroughbreds and gamble on the same horses, but in a different form.
Under present legislation, I would not have to pay any tax on the income that I would win on classic thoroughbreds until I exceeded a certain margin, which varies with the Finance Act from year to year. In other words it is easier to gamble on the stock market than it is in the bookies' shop. I do not understand why that is the case. Similarily, if I had enough money to buy a share in a stallion and have an income from that investment it would also be tax free. I do not accept that that is correct, it is bad for the industry. Senator Magnier is right in saying that the bloodstock industry has been a tax free industry. The freedom from income tax which is allowed to people who have shares in stallions is insupportable and not the way to support an industry.
One should not support an industry by allowing the income to be tax free, there are other ways of doing it. For that reason I cannot support the idea that the Government should now put more money into the industry without getting anything back. I hope that the Minister supports me on that point because the industry needs an injection of cash. I would prefer to see it done by some form of levy at an earlier stage.
The proposal to reduce the 10 per cent tax on bets to 7½ per cent and to take 1½ per cent out of that 7½ per cent and give it back is reducing the income to the State by 50 per cent. The State cannot afford it and I certainly would be one of the people who would cry halt and would want a very good explanation as to why that should be done. Maybe people are badly off, but there is a huge amount of money in circulation in the bloodstock industry. Maybe it is not getting to the right place but the money is certainly there. It has almost become an accepted part of life in gambling on horse racing that one does not pay the full tax due to the Government. I know it has been said before but two Members of the Oireachtas were on television one night boasting that they did not pay their full betting tax. To give any kind of substance or support to that activity does not do any good to the industry. I am not saying that the people behind the racing or that those who wrote this report would support that, quite the opposite. They say that taxes should be paid but I disagree with the way in which they feel the money should be spent.
The bloodstock industry touches many parts and aspects of Irish life. For that reason it should be a very precious thing and it needs cultivation. Profits should go back into the industry but I do not believe the only money to go back into the industry should be a clawback from the Government of the tax paid by the small people in the industry. I do not think that is right. It is not sustainable. We need to look very closely at profits. I do not mean that people should be put to the wall in order to support the industry but where there are genuine profits, we should wield the axe.
The bloodstock industry is very much part of our leisure activities and for that reason alone deserves to be supported, but it is also a major part of our tourism industry and draws people to this country. Not only does it draw people to this country to watch racing events, but there is also the spin-off from showing televised Irish race meetings abroad. People do not give this spin-off due recognition. A well run race meeting, good racing in a nice environment, does wonders for Ireland's general image abroad. That is one of the reasons we look very seriously at improving facilities at race meetings. It is important when journalists cover an event in Ireland that they do not go home and write about the condition of the toilets, washing facilities, the lack of cover for the stand, or safety rather than the event they came to watch. These are things we need to look at.
This industry provides employment for many people. I met one of my past pupils recently who gave up a job in town to go back to work in stables for half the wages. I give that example to show that a love for the racing industry is in the blood and people are so committed to it that wages are not the main priority. I regret that many people working in stables are very poorly paid, and will put that in context. I am not saying they are being bled dry by their employers. I understand trainers and people trying to upgrade the business are not making huge sums out of it either, but I regret that people who are so committed to this industry and who work such long hours are paid such low wages.
Racing is part of Irish life; it is part of the Irish psyche. There are very few people in this country who would say they never watched a horse race or had a bet. It is part of what we are. Therefore we have a responsibility, which we may not abrograte, to see that this industry is developed. As legislators, as Members of the Oireachtas, we have a very clear duty to see that it also pays its way. It is not something that is there simply for the good of racing, it is there for the good of the country at all levels.
I welcome the report and I go along with more than 90 per cent of the recommendations, but I have difficulties with the area dealing with taxation. I will not go through the 122 other recommendations in the report. However, it is excellently presented. There is a lot of reading in it and I hope the recommendations are taken to heart and considered by Government very shortly with a view to putting them into operation. I support the proposal by Senator Magnier to have a committee of the House look at the bloodstock industry.
I want to speak on this important issue from the point of view of one who clearly loves a day's racing, as one who had the pleasure of having a stake in two different horses, without success I might add, and as one who likes a bet. Anything I say on this issue is said with the best interests of the industry at heart. All of us who have an interest, whether it be a vested interest or otherwise, have a role to play in making this a vibrant industry.
Reference has been made to individual performers — for example, what Stephen Roche has done for cycling, what Liam Brady has done for soccer what Barry McGuigan has done for boxing, what Mick O'Connell and Christy Ring have done for their sports. I always think that anybody, or any animal, who can win the hearts of the people can do great things for their sport. That is why I have always regarded the exploits and the performances of Arkle as special. They clearly won the hearts of the Irish people and generated interest in the industry. Roll on another Arkle, or Dawn Run, so that we may create that same interest in the Irish people once again.
A lot of this debate centres on finance, what finance is available and ought to be available. I am not opposed to the view that this State should contribute to racing. Racing is a native sport, it is part of our way of life. It does much for our international image. It is an essential part of the economy and I stress, has been with us from time immemorial. It is something we all enjoy. It is capable of creating new jobs and maintaining existing jobs. It is adding to our exports. It is good for tourism. Galway, Listowel and Tralee had been referred to. For example, the first week of February is carnival week in Clonmel and is centred on the greyhound scene. We have racing in Galway, Listowel and other areas, all important in their own way and adding to the tourism potential of this country.
In good times I would have no hesitation in asking the Government for State support. I do not have to spell out the demands and the cutbacks that are being made unfortunately in areas of health and social welfare and the other Government Departments but at present Government Ministers are pruning their budgets. I am not sure a contribution from the Exchequer would be the best thing at this point, much as I would love it.
It is no harm mentioning what has been touched on here and is clearly referred to in the Killanin report, that is, that racing is basically a rich man's sport. Owning and training a horse is not a commercially viable proposition. We are told in the report that prize winnings only cover one eighth of the training and racing costs and that an average horse may lose up to £6,000 per year. It is the sport of kings. To expect funding from a hard pressed Exchequer at this time, I regret, is probably not on. I wish it were. Knowing the Taoiseach's interest in the sport, maybe I will be proved totally wrong, I hope I am.
There is another area from which funding can be provided. This, too, was touched on by Lord Killanin in his report. I refer to the national lottery. The report clearly indicates that the national lottery could have a severe impact on betting on horse racing, as obviously this is creating free competition for the betting pound. The report goes on to make the point that in the US from 1974 to 1984, horse racing track revenue increased by 51.6 per cent to $1,948 million, that horse racing tote revenue increased by 135.4 per cent to $408.9 million, but that the lotteries have increased by 1,045 per cent to $4,147.5 million. If that were to happen in this country it would have very serious repercussions also for betting in the greyhound industry and in other areas of life. Lotteries are damaging and will continue to damage the betting pound.
There is a very strong case to be made for lottery funds to improve racing in Ireland. That could be legitimately entertained. Section 5 (b) of the National Lottery Act of 1986 would not in any way be breached if this were done. Betting suffers because of the lottery as many of the people who enjoy a flutter on the horses are now contributing largely to the lottery.
With regard to the lottery itself there could well be, at this time, a change of emphasis, away from the lotto idea, for example. It could be based, as Lord Killanin mentions on a particular race. We all know there is the Triers in France which is a lottery based on racing. Lord Killanin's recommendation 98 says that ideally that could be a handicap of 16 runners minimum. That would have advantages. It would have the advantage of creating interest in racing as a result of the national lottery and it could easily be organised. I propose that An Post be consulted in this regard to see if they can arrange it for the reasons I give and which have been given by Lord Killanin in his report.
Much of the report centres on the very important area of racecourse development and increased attendances. Facilities at racecourses are adequate at only a handful of the tracks and improvement depends on the availability of finance. Better facilities are a very necessary part of racing and while services remain inadequate the racing industry has little hope of attracting new patrons. The racing industry, as the report indicates clearly, is a weaker branch of the industry and therefore needs this kind of support. Its financing in this area in recent times has been insufficient to support the various improvements that are necessary on the scale that is necessary. Again I would agree with recommendation 60 of the Killanin report that the allocation that funds be based on betting turnover generated at the course. The reasons for this is that they will give increased incentives to individual racecourses to attract more people to the races.
All of us must help the racecourses to achieve higher attendances, to help them get in the necessary revenue from betting that would enable them to implement that recommendation of the report. Why not have as Senator O'Toole mentioned, free admission? Admission charges should be kept to a minimum. Why not look, for instance, at the charge per car arrangement as is done at point-to-points.
For the future, the design of new course facilities should be dual or multipurpose to facilitate other leisure activities. Leopardstown and the Phoenix Park are the obvious ones. Down the country, the Ballinrobe track has a golf course in the middle of it.
The report refers also to the question of catering. This is an important aspect from the point of view of attracting people to the tracks. Prices for snacks at many of the racecourses are a rip-off. What happens is that the racecourses award the catering franchise to a firm and after that they wash their hands of price control. I recall recently being at a meeting where an old age pensioner who, one hopes, had gained admission free, was buying a container of soup and a roll and paying a rip-off price for it. That is doing nothing to get the crowds into racecourses.
I want to stress that I think the industry has a role to play in this area. Cliff Noone whom I do not know but who wrote last week, and writes regularly in The Irish Field said that the downward trend continues. He was talking about Roscommon and Saturday 2 July specifically and he said that because that meeting clashed with the Phoenix Park races it damaged the aggregate. He made the point that 12 months ago at the corresponding meeting — I was present at that meeting; Roscommon and Kilbeggan are my local meetings and I enjoy them very much — which was held on a Monday evening, the day's aggregate was £47,000 while this year it was down to £27,634. I recall that only two of the six races in Roscommon were flat races where obviously the other six races in the Phoenix Park were all flat. What Cliff Noone did not say was that the first race in Roscommon had four runners; that the second race had four runners; that there were two further races of seven runners. I noticed that in the Phoenix Park on the same day the first race with prize money of nearly £4,000 had three runners; that a race or maybe two had five runners and there was a group two race that had a mere seven runners. Downpatrick on 1 July had five runners in two of its races and six runners in one of its races. I seem to recall that Gowran Park sometime back had a walk over in a race of £3,000 value. Is this the kind of racing to attract the crowds?
Senator Magnier made the point that sponsorship is drying up. Do these kind of fields inspire confidence in the area of sponsorship? I do not think they do because small fields can be disastrous so far as crowds are concerned. The Racing Board and the governing bodies should examine this entry and declaration problem urgently because we all have a role to play. That includes the owners and the trainers.
Another disincentive to attendances in Ireland is the public perception of races. I am not saying we have non-triers in races in Ireland. The question of no-triers in is referred to specifically in a paragraph in the Killanin report. There is a widespread complaint that many horses, for whatever reason, are non-triers in Irish racing. If this is the case, there would be more confidence in the industry if all horses were seen to be running on their merits. Many punters tell me that it is their perception — that is the thing that matters — that English racing is more controlled. My local bookies tell me that 90 per cent of all their bets are struck on English racing. Admittedly there is more English racing, but even on Saturdays when there might be one, two or three meetings in Ireland the majority of betting is struck on English racing. I do not say this is happening in Ireland but the public perception is there that there are non-triers and this is specifically referred to in the Killanin report.
The Racing Board are responsible. Their main purpose is the development of racing. The first recommendation of Lord Killanin's committee is the establishment of a thoroughbred industry board to take over the functions of the existing Racing Board with wider functions of planning for the future of the industry. That recommendation goes on further to state that they do not envisage the governing bodies, that is the Turf Club and the INHSC, being part of the new statutory body as such. The Turf Club are a very important body in the Irish racing industry. They have many functions including looking after stewards, trustees, the Curragh, races, jockeys, betting, the accident fund, the owner register, entries and declarations, licensing, accounts, dope testing, patrolling courses, starting stalls and so on. The INHSC have the repsonsibility of looking after stewards, flagmen and the clerk of the course. Therefore, they are very important people in the Irish racing scene.
The arguments that have been made to exclude the governing bodies from being part of the new body — and this is one of the disappointments of the report — ring hollow. We should remember that the report quite clearly suggests that the governing bodies are archaic and undemocratic. I do not say that they are archaic or undemocratic but the report says they may in some way carry that tag. I do not say that we should abolish the Turf Club and their sister organisation but what I would say is, and this, as I have said, is one of the disappointments of the report: why not a full examination mindful of the fact that the functions which these bodies carry out are of vital importance to the industry? I note that at their final meeting in March 1986 nine members of the committee of 14 were also members of their sister organisation. I hope and expect that is mere coincidence but I feel that self-examination is not the best form of examination and a glorious chance has been lost. That is a matter for consideration in the future. It would be better if independent consultants were brought in to examine how the workings of the Turf Club and their sister organisation could be improved for the betterment of racing.
Senator Magnier in his excellent address earlier today referred to new betting methods. He referred to a reducation in tax to a rate of 7.5 per cent with 1.5 per cent of the revenue raised going to the industry itself. That is a new idea and is worthy of consideration. In my opinion, sooner or later the Tote will compete in the off-course market. Let me make one observation. It is absurd that the Tote operates credit betting while not entertaining deposit betting for new customers.
Let me now turn to deal with the question of tax. Again, in support of looking at new ways of betting, why not a tax on winning bets only as distinct from the present arrangement where tax is payable when a bet is actually struck? Many punters would prefer this and, indeed, at my request my local bookmaker carried out a survey over a five week period following which he concluded that, even if the betting levy were increased to a rate of 12.5 per cent, it might not affect his turnover if the tax was payable only on winning bets. I know the results of the survey are not a good yardstick but it does provide food for thought and that is what this report is all about, to get us thinking and talking. My local bookmaker came to the conclusion that, by taking this option, there would be an increase in revenue to the State of about 14 per cent and if that were to be the case the argument for ploughing it back into the industry would be all the stronger.
Let me make another observation that all tax free bets should be outlawed. It is wrong that the big bookmakers and even some of the smaller ones are allowed to take a bet without tax being paid on it. I know they pay the tax themselves on it but can that industry carry that kind of loss? It amounts to unfair practice. I am not saying that bookmakers should not be allowed to introduce innovative bets, for example, higher limits or place betting on the first five horses home in a race, or other traditional gimmicks which are necessary to attract punters, but if this practice is allowed to continue certainly the big bookmakers in time will wipe out the smaller bookmakers.
In regard to betting let me make the point which was touched on by Senator Magnier that, with the completion of the internal market in 1992, it is probable that there will be no obstacles to placing bets in other member states, notably the United Kingdom. If UK rates are more favourable it could spell disaster for the industry in this country. We should aim to reduce our rates below those of the UK to encourage the placing of bets from the UK here. That is where I see much merit in Senator Magnier's proposal in regard to a reduction in the rate of tax charged to 7.5 per cent. If you like, it adds to his case.
Breeding has already been referred to and the Killanin report states that that section of the industry is in a healthy state at present and I believe it is. As long as the present tax regime remains, it should stay that way. Senator Magnier referred to the danger of relocation if there were to be any change in the present tax regime.
I cannot let this occasion pass without referring to point to points and the contribution they make to the national hunt scene. Many of our top national hunt jockeys started their careers at point to point meetings throughout the country. In my own area in south County Westmeath there is a hunt which is 100 years old and certainly they are keeping the flag flying in a very competent manner.
In conclusion, I have enjoyed this debate and I have read the Killanin report a few times. I enjoyed reading that report and I gleaned great knowledge from it. I congratulate Senator Magnier on initiating this debate and perhaps we will take up his offer in the future. I also congratulate the Killanin committee, in particular Lord Killanin. I admire his work in this area and the role he played in the Olympic Games movement. The report before us provides us with a great insight into the industry. I hope this debate will lead to optimism in the future. As the Minister has indicated, the Government will soon be discussing this report. That it will be on the Government's agenda is something positive as is the realisation that something will be done for this industry which provides so much enjoyment for so many people.
I have been a declared runner for this debate for some time but unfortunately the rules of the House did not allow me to get away from the starting gates until now. I understand the rules and procedure of the House but that fact does not diminish my enthusiasm to take part in this debate.
At the outset I would like to join with you, a Leas-Chathaoirligh, in acknowledging the presence in the House of the esteemed chairman of the commission and author of this report and to say how pleased I was to append my name on behalf of the Labour Party to this motion, with my colleague from County Tipperary, Senator Magnier, which takes note of this very fine report. Indeed, Senators went into some depth in dealing with this report. I would also like to put on record the fact — and I do this in the presence of a Minister from County Tipperary supported by an adviser from County Tipperary — that this is an indication of where the Golden Vale starts and ends as regards racing and breeding.
The Labour Party considered this industry very important and were in Government with another party when this commission of inquiry into the industry was set up. The employment potential of the industry, was outlined by many of the speakers today. We recognise it as a major employment industry, albeit a service industry.
Although it has occasionally been referred to as the sport of kings — and my friend Senator Magnier almost fell into the trap of acknowledging the kings and princes still involved like His Highness, The Aga Khan, Prince Abdullah and the Maktoum family — it is also the sport of many ordinary people, who own horses of all descriptions, from national hunt to thoroughbred runners. Occasionally they own those horses at considerable cost to themselves because the Irish people love that particular animal.
The industry gives a lot of employment and a great deal of pleasure. It is enjoyed by a wide sector of the community, whether we are gainfully employed, unemployed, housewives or anybody else, all of us some way are involved with and have an interest in racing. We had a submission from the Racehorse Trainers Association who itemised approximately the numbers employed; 2,000 grooms to look after 5,500 horses, assistant trainers, secretaries, horsebox drivers, stablelads, studgrooms and those in indirect employment like printing, garages, petrol stations, chemists, veterinarians, hoteliers, saddlers, farriers, horsebox companies and so on, and we realised that some 18,000 to 20,000 people in Ireland are involved in the industry.
Certainly we felt that the Labour Party should not only take an interest in the industry and formulate a policy on all its aspects, including breeding, racing and betting, but should also submit a policy to the commission, as was advocated by the last Government who set up the commission. We did that. It is of particular satisfaction to me that it is acknowledged in the report that the Labour Party were the only political party who made a submission to Lord Killanin and his commission. That says more than I can indicate in this House of the importance that the Labour Party attach to this industry. We were concerned that whoever would sit down to investigate it would have the benefit of the input from a democratic political party who represented and continue to represent the vast majority of the employees in the industry who also had submissions made on their behalf by the various unions, the Irish Transport Union, the FWUI and the IRMA and the IUDWC. We also wanted to ensure that we could advise the Cabinet members who were Labour Party members of our views on this industry.
I was a member of the committee we set up on the thoroughbred industry and which dealt with aspects of taxation and how we felt the industry should benefit from changes in taxation. Our committee, representing as we did the party, made a submission to Lord Killanin and his commission advocating that the rate of tax on betting should be reduced for a trial period from 20 per cent to 10 per cent. We were delighted that the then Coalition Government with which our party were involved accepted this and brought in a change in the Finance Act which brought this into being. This proposal was accepted by Lord Killanin. We advocated that this reduction would be self-financing, and that it would address the problem of money going out of the country on telephone betting to Britain because the levy on betting here was double that in Britain. I think it is agreed by anybody who has had an interest in what has happened in the meantime that this step was not alone justified but was of benefit to the Exchequer.
In fairness to Senator Magnier, he has suggested what is a slight change to what was suggested by Lord Killanin, that in a self-financing way the current rate of tax on off-course betting be reduced from 10 per cent to 7½ per cent. If it is self-financing I think this should at least set at ease Senator O'Toole's reservations, because if the current rate of tax on off-course betting was reduced and some of this reduction was in fact transmitted to the industry, then it could only benefit from that process. This suggestion would have initial implications for the Exchequer but provided it is self-financing I do not think we would have a reservation about it because we used the same argument in our submission to reduce the other levy on betting which cut it in two and yet the Exchequer benefited.
When the Minister is addressing the problems of state funding and the preparation of next year's budget with his colleagues, perhaps he would consider a trial period to see if it is self-financing. It should certainly be considered in that light only, when there are widespread cutbacks in public sector spending which involve all the social areas that the Labour Party are extremely concerned about such as health, social welfare or education. If the income for current budget spending was interfered with in some way by suggestions like this, then it would create problems and the concern that has been expressed by Senator O'Toole would be justified. In fairness, Senator Magnier has said it would be self-financing from the Exchequer's point of view. He also says, and I agree with him, that it will have an immediate visible impact on the industry. Also in our submission to Lord Killanin, we took what we considered a courageous step and advocated that the income from stallion's fees should continue to be tax-free. It was not easy for the Labour Party to suggest that.
May I ask the Senator to allow me to intervene for a moment? Regrettably, I have to leave at this point. I had actually entered into committments on the basis that there was a fixed time for the debate, which I now understand is not the case.
Unlike the other House, we have freedom of speech here.
I make no criticism of the fact. I was told that the debate would conclude by 2 p.m. On that basis I made arrangements for discussions. I regret that I have to leave. My colleague, the Minister of State, Deputy Kirk, will be here, and I will hear a full report afterwards on it.
On a point of historical accuracy, while I am on my feet, it is a tribute to Lord Killanin that everyone is claiming paternity for this report. My historical recollection has now been verified and it was, I understand a Fianna Fáil Government which set up the commission in 1982. I know that it reported to my predecessor Deputy Deasy, but it is just a point of fact.
We will allow the Minister that parting shot and hope he will take on board some of our suggestions in the area of taxation. I know the Minister expressed the view on many occasions that when changes in Exchequer funding are involved he has a high regard for the finances of the State. What I am trying to put in context is the validity of the suggestion put forward by Senator Magnier which was made on the basis of being self-financing. We have used that example when we were in Government and the Minister, Deputy O'Kennedy, was in Opposition. In fact, we reduced the tax by 50 per cent and that move proved beneficial to the industry and the Exchequer.
I have been dealing with the recommendations that income from stallion fees should be tax free, as provided in the 1969 Act. We carried out a lot of research into this and we came to the conclusion that such a provision had advantages for the economy because while it is difficult to move goods, at least until 1992, it is easy to move money, as has been proved in the past. If breeders are to be taxed on their thoroughbreds it will be a simple matter for them to move their stallions outside the country. Such a move would lead to a drop in employment in the industry here. No longer would thoroughbred mares be brought to Ireland to be serviced. We had no hesitation in advocating that that sector of the industry should be tax free. We are aware of the loopholes in the tax code which result in shares in the ownership of stallions standing in other countries being tax free.
If the Minister permits abuse of that provision the whole concept of the concession will be defeated. We are in favour of the owners of stallions maintained here getting a tax concession because there are tremendous benefits for our economy. The Labour Party, at an annual conference, accepted the benefits of the 1969 provision and that says something for our interest in and commitment to this industry. It is wrong to say that the industry is tax free. We are all aware that profits from all other activities in that industry are subject to tax. It is important to remember that employment in that industry is not State assisted. We have always advocated that profits should be subject to tax but we made an exception in this case. It was pleasing to note that Lord Killanin accepted our recommendation in regard to that provision.
Senator Magnier dealt with off-course betting from which the State benefits to the tune of £20 million annually. The suggestions put forward by Senator Magnier would result in the Governing losing approximately £8 million, if they did not prove self-financing. In his view the only beneficiaries would be the industry and the punter. It is popular to suggest that the Government should reduce taxation but I am sure that punters, who always complain about having to pay tax on bets, realise that if the industry is not allowed to prosper there will not be any racing to bet on. Likewise, those involved in breeding, training and racing realise that without the punter the industry would collapse overnight. Those who invest in thoroughbreds accept that they will get little return on their investment. The State invest very little in that industry. In my view the State should consider our suggestion so that we can compete with the industry in Britain where attendances at race meetings are higher than in Ireland. In my view attendances here are dropping because of inadequate facilities and high admission charges. It should be possible for people in our big towns to bet on the Tote. Profits from the Tote go to the Racing Board who play a useful role in the development of the industry.
We suggest that the Racing Board should be an independent body and not, as Lord Killanin has suggested, amalgamated with all those involved in the industry. Some sectors of the industry are not compatible and it would not be good for the industry if they were amalgamated. Senator Fallon referred to membership of the Turf Club which, as everybody knows, is an exclusive club. It has been part of the racing scene since the foundation of the State and existing members can nominate new members to the club. I am sure Senator Magnier is in a position to explain the procedure better, but most people are aware that it is difficult to become a member of the Turf Club.
The legislation establishing the Racing Board stipulates that of the 11 members representing the State on that board six must be from the Turf Club. I do not have any objection to that if those involved have a knowledge of racing and a commitment to the development of the industry and are not simply appointed on their membership of the Turf Club. Lord Killanin has suggested that five members should be appointed to the board he has recommended from the membership of the Turf Club. In my view the Minister should appoint the members of the Turf Club to the Racing Board and it should not be left to the Turf Club to decide. I accept that the Turf Club includes people who are expert in horse breeding but they should be appointed by the Minister. I do not think the Turf Club should have the majority of members on any board appointed by the State.
The Racing Board own, or have a major shareholding in three of our most important racecourses, Leopardstown, Navan and Tipperary where a very high standard is maintained. The Racing Board give grants to racecourses and recently paid £300,000 to Fairyhouse. Supporters of National Hunt racing agree that Fairyhouse which has a long tradition with the Irish Grand National, is an important racecourse.
Perhaps the Minister when replying, might say what are the proposed plans for the spending of £300,000 of taxpayers' money through the racing board on a racecourse like Fairyhouse. The taxpayers are entitled to know. Likewise, we give a grant of £300,000 to the Turf Club. Perhaps they would tell us on what they spend this money. I have never seen any of their accounts published. If public funding is being allocated to an organisation, it is appropriate that we should know what the money is being spent on. Perhaps there are very simple answers to all these questions. I am trying to strike a balance between what the taxpayer considers is his obligation to the industry and what happens to his contribution. The Turf Club deal with entries, overnight declarations, arrangements about jockeys and other such matters. It sounds a very simple process. Perhaps they might even have a very worthy credit balance at the moment. If we saw their accounts, perhaps it would be of benefit to all of us in the House.
In Lord Killanin's report he recommends the establishment of a thoroughbred industry board, about which the Minister has expressed some reservations, as indeed I have. He also suggests that the National Stud, the Totalisator, the Racing Apprentice Centre for Education, the Irish Equine Centre, a racecourse management company and other companies would be subsidiaries of the board. Many of these probably would have compatible interests. The Totalisator, the State run betting organisations which is a subsidiary of the Racing Board, could be revamped in a way which has not been done in the past. As I suggested, maybe outlets could be opened throughout the country to ensure that the State has a further take from betting at that level. That money could, of course, be transmitted back into the industry as Senator Magnier has said.
One of the other bodies mentioned in the report as being brought under this umbrella organisation is the Racing Apprenticeship Centre of Education, which is an extremely important service to young apprentices. One of the best jockeys in Ireland at the moment, Christy Roche, who comes from my native village of Bansha; came through that procedure and I consider him worthy of mention among the greats in sports. He has brought much pleasure to many people who knew him. They are proud that he came from a small village in the heart of County Tipperary.
I would like to bring it to the Minister's attention that in this year alone AnCO, through FÁS, have reduced all grants to this sector of the industry. It is important that we recognise that this training sector is doing a useful job. It should be supported by the Government through the Youth Employment Agency funding. The Irish National Stud supported it by making a six acre site available to it but it is still in need of urgent funding.
Another recommendation of the commission of inquiry is that there be a change in the financing of the Irish National Stud. I want to pay the highest compliment possible to this State run stud both for the service they have given to small breeders and for the fact that, despite legislative restrictions, they have been able to borrow to meet their requirements. Under the 1976 Act their borrowings were limited to £500,000. In the 12 years since then no account whatsoever has been taken by the Government of the change in money values. I was pleased to hear the Minister today say that he is in favour of the recommendation to update this figure. I am also pleased to acknowledge that the Taoiseach has put it in writing that he is personally in favour of increasing the borrowing capability of the National Stud. Certainly, as it has no consequential cost factor on the Exchequer, it should be supported. I hope sincerely that the necessary amending legislation will be brought before this House as quickly as possible to ensure that, as no additional public funding is involved, we should at least facilitate the industry, through the National Stud, to be able to avail of borrowings from banks, based on expertise and on record.
It is appropriate, when speaking about records, to put on record some of the performances of the members of the National Stud in the past. I would like to pay tribute to a previous chairman, Larry Ryan of Cratloe, who brought much expertise, ingenuity and common sense to the industry. When he purchased the sire, Ahonoora, for £250,000 he actually brought to the State a horse which has since proved to be worth £7 million. That has been of tremendous benefit to the State. I am delighted that that horse is still standing in this country.
I want to put on record my appreciation of people like Senator Magnier, Vincent O'Brien and the owners of all the other stud farms in the County Tipperary area such as Ballykisteen, Longfield, Lismacue, Rathduff, and so on. I could go on listing them. All of them have made a tremendous impact on employment in the county. They employ more people than some of the multinationals and are a great asset in the area. When discussing this motion in the name of Senator Magnier it is appropriate to record the appreciation of everybody within the county for what those people are doing for the bloodstock industry.
I am delighted, as I have said, that the National Stud were able to realise the kind of money I have mentioned from a stallion which they brought for relatively little. It is important that the nation be involved in acquiring stallions which could be used for the benefit of smaller breeders. With their success on the racecourse they could benefit the State in no uncertain terms as that horse has done. I hope the Committee of Public Accounts will recognise that fact when they meet representatives from the National Stud tomorrow.
Lord Killanin's report recommends that the National Stud be involved with other people in the purchase of stallions. I know it might be a complicated leasing process but at least the State would be still involved. Because of the legislative restrictions on their borrowing they have used another system, involving people with an interest in horses, to acquire such stallions as Magical Wonder and the classic winner, Clash of Steel. That is an indication of the commitment of the National Stud, in spite of the restrictions placed on them.
The report deals with other matters such as Sunday racing, a concept which has been a tremendous success. Let us hope that the new licensing laws which have been passed and which are relevant to race meetings on Sundays in particular courses are subject to ministerial amendment. The Labour Party believe that if the industry is addressed in a constructive way it will have tremendous employment potential and give job satisfaction to those involved. Many of the people employed in the industry are involved in it because of the enjoyment many people get from going to racecourses and having a flutter on a horse.
In addressing the recommendations of this report, I believe we have a duty to respond, where necessary, to it by way of Government legislation. We should also recognise that the industry has addressed some of the needs in this area. Hopefully some of the criticisms that have been made here about the facilities at racecourses and the exploitation of the people who attend racecourses will be addressed by the governing bodies. I hope that the Turf Club do not take my criticism too severely because Members of this House are criticised on a daily basis. If the criticism is constructive perhaps they will become more democratic, open and frank with people so that there will be a better regard and more support for the contribution they obviously make to the industry in conjunction with the State agencies. I hope FÁS will address the question of the apprenticeship education group and that the other groups who need assistance by way of additional employment incentives will get it.
This is a service industry. Anybody who says that the process of artificial insemination is not used in the bloodstock industry shows a lack of knowledge of the industry. Artificial insemination used on a widespread basis, as it is for cattle breeding, would eliminate the whole concept of quality and the demand for extra special horses. At times artificial insemination can be used by veterinary inspectors.
On the last occasion when we discussed the rationalisation of the Veterinary Surgeons Act with regard to the change in Community Regulations, I paid tribute to Dr. Brendan Farrelly, an Irish veterinarian, who has gained recognition in the field of equine diseases to such an extent that he is regarded as a world authority on equine diseases. I am delighted that in relation to the identification of disease, in particular those that are transmitted by the female of the equine species, all the studs I know have set up laboratory facilities to ensure that a process of isolation takes place due to the tremendous movement of international bloodstock from Australia, Japan, New Zealand and other countries to this country.
Because of the quality of the stallions standing here I believe that if we did not operate a control system over the transmission of some of these damaging diseases the industry would have been decimated by now. The industry has shown a willingness to address this problem. It is an international industry and people recognised that it had international risks because of the movement of animals, I am happy that the Department of Agriculture and Food and the veterinary research laboratory in particular as a result of the work of Dr. Farrelly, made facilities available so that people could identify whether visiting mares had contagious diseases which could decimate the bloodstock industry and cause major losses.
In spite of what is perceived by the ordinary punter and the ordinary man in the street this industry does not make money. This is an industry in which major capital risks are involved. The infrastructure is such that the people involved cannot evade tax and they are not tax assisted by way of grant. The actual capital investment involved is very considerable and if it were not for the dedication of some people in this country and some international people who have chosen Ireland as a suitable place in which to stand their stallions and have mares visit here the industry would be very poor. Instead of that we have achieved an international reputation, of which I think all of us are proud.
I want to commend Lord Killanin and his group on this report. On behalf of The Labour Party I have expressed our reservations on it. I commend Senator Magnier for having brought the report to the floor of the House so that at least one House of the Oireachtas could address this very important economic development that takes place within our shores.
I will be very brief because the contents of the report have already been dealt with in great detail by other speakers and I do not wish to prolong the debate by repeating what has already been said. However, it is very important that the House should discuss the Killanin report and consider the many recommendations made by the committee for the betterment of the bloodstock industry. Some of the recommendations made by the committee have already been put into effect and I hope that as far as possible the Government will implement the other recommendations as soon as they can.
The thoroughbred industry is, as Senator Magnier rightly stated, one of Ireland's greatest assets. Irish horses are recognised world wide as being the best and are eagerly sought after by breeders and trainers throughout the world. The sale of bloodstock abroad and the employment generated by the industry at home made a tremendous contribution to our balance of payments.
I should like to compliment the Irish Thoroughbred Breeders Association, the representative body for the breeding industry in Ireland. Their main aim is to promote and protect the interests of the breeders and owners of thoroughbred stock. I had the pleasure of working very closely with them during my term in the Department of Agriculture and I saw at first hand the commitment of men like Captain Seán Berry, Secretary of the Irish Thoroughbred Breeders Association, Sir Ian Harris who was chairman at that time and his successor, Mr. Stan Cosgrave. Those people and many others are slogging away to ensure that the thoroughbred industry is protected and expanded. With a little support the industry will continue to play a major role in international bloodstock markets and the domestic bloodstock industry at home can play an increasingly important role in our economy.
Finally, I should like to thank Lord Killanin and the other members of the commission for this very important report, for their in-depth investigation into the problems of the industry and for the many recommendations they made to improve the industry. I am satisfied that this debate will highlight some of those problems and I hope that there will be a resolution of them in the very near future.
I too want to add my voice in welcoming the Killanin report into the thoroughbred horse breeding industry. Like Senator Hussey, I do not want to go over much of the ground that has already been covered. I believe the report has got a significant airing as it is. Nevertheless there are a few important points that need to be emphasised in the context of the discussion on this report in the Seanad.
As has already been pointed out by Senator Magnier, racing is a business today. It was probably regarded as a sport or as a hobby in the past, but now it is a big business. Without wishing to sound facetious I have no doubt that even the sale of newspapers would go down by about 50 per cent were it not for racing. Many people get up in the morning with the intention of buying the newspaper to seeing where they can back a few winners for the day, whether it is in Ireland or across the channel. That is an important feature of everyday life in this country and is an important part of the day's work for many people who have nothing better to do. We must acknowledge that there are, unfortunately, a growing number of those people in Ireland today. In addition it gives enjoyment to a large number of people.
I am heartened by the statistics on page 201 of the report which show that out of a population of 3.2 million people, 1.1 million recorded attendance days are shown for Ireland. Compare that with Great Britain — our nearest neighbour — where out of a population of 56 million people there are 3.8 million attendance days recorded. That gives some indication of this important feature of Irish life, which is a traditional part of Irish life — the racing industry. Various speakers have acknowledged the enormous contribution the industry are making to employment both part time and full time. Many parishes have ideal conditions for racing and agri-related activity and they would feel the pinch were it not for the enormous contributions of the O'Brien stable, Dreaper and Mullins. If those people were not involved to the extent they are involved in the horse racing industry, many thousands of people who derive their livelihood in a local rural community would find great difficulty in finding similar employment or in finding employment at all. We know the consequences for rural parishes in particular in that the emigrant boat or the spectre of unemployment would loom greater for them.
The great spectacle of racing gives everybody a thrill. In fact, the spectacle of the Budweiser Irish Derby, the Irish Grand National or the English Grand National has a significant interest for us all because of the impact Irish horses make abroad at meetings like Cheltenham. Horse racing captures the imagination of the Irish psyche to such an extent that I do not think we could live without it. The Minister for Agriculture and Food has an onerous responsibility to meet the challenge of the racing industry in the future. We must admit that the racing industry today is not in good shape. It is not in good financial health and the standards are not good. A large amount of finance is required for capital investment to modernise the facilities and to keep attendances up in order to compete with other sporting organisations and other sports that have become modernised very quickly and are competing in the diminishing marketplace of the sporting attendance and the sporting public. We have to put it in context with other sports such as rugby, GAA games or tennis. Because of the vast sums of money invested in sports over the years, they will have a great attraction for the younger generation who will be looking to leisure activities for their free time. The older age groups in our society have grown up with a traditional love of the Irish racing industry and a traditional love of going to a race meeting. That trend can change quickly if we are not careful and if we do not plan ahead to meet the challenges of that extra competition.
A character who frequented race meetings in the past was the single young person with a good job and who was a big spender in the leisure activity he or she enjoyed. Unfortunately, those people are now emigrating. All too often we rely on redundancy payments from factories that go into liquidation as the main source of big spending sprees that are so essential to keep many race tracks open. That is a short term expedient and something that will not last.
Senator Magnier has drawn attention to the drying up of the sponsorship money that will become available in the future. He sounded a warning about that source of revenue to keep the many race tracks in operation. It is not good enough that the State which derives significant finance and employment opportunities from the industry should rely totally on the private sector and on the goodwill and expertise of people in the Racing Board or the Turf Club to bring sponsorship to this country to the significant extent we have seen in the past. I pay tribute to the efforts of the Racing Board to attract a significant amount of sponsorship in the past couple of years and I hope it will continue. We must heed the warning that the pool of sponsorship is diminishing. The State will have to plan ahead to upgrade the facilities and standards and modernise the industry so that the attractiveness of sponsorship will be maintained for people who want a return on the investment and a return on their sponsorship.
There is no doubt that there are too many race meetings at present. Senator Fallon developed that point and showed graphically the problems that can arise and the bad name that racing as a sport can get from having small fields and too many racing days. It is notable that, if you go to race meetings frequently, you will see the same faces. There is only a certain amount of disposable income in the country now and it is even less now than it was a few years ago. That disposable income is becoming less and less with the impact of the national lottery and the effort to maintain the standards of living to which people have become accustomed. If we do not have rationalisation of race days and if we are not positive about making our tracks more attractive to keep attendances up, other sports will benefit and other attractions will become the norm and racing, unfortunately, as an industry and as a leisure activity will suffer.
I want to support the 2 per cent levy on off-course betting or the 20 per cent of turnover suggested by Senator Magnier and in the report. I think Senator Magnier mentioned a figure of 1.5 per cent of 7.5 per cent of the off-course levy. The report mentions 2 per cent and a 10 per cent levy. Whatever figure is arrived at a significant case can be made for some proportion of the off-course betting to be levied and given to the racing industry to meet the challenges to which I have referred. There are no better people than those involved in the racing industry to channel that money into projects that will get the required investment return essential for the benefit of the Irish economy. Leopardstown is a perfect example of that. I hope that other courses will see the need to modernise and the need for extra resources to be made available, whether by means of the national lottery or through the financial incentives as outlined by Senator Magnier. Those courses should upgrade their standards and modernise to the extent that is so essential.
I question the value of some of the sponsorship we get in this country. I question the value of some of the races and stake money because we have classics which perhaps might be over-rated even though they are of tremendous benefit to the people involved. There are classic runners that are trained for one race from the time they are born. Their owners derive an income from the stud fees they generate afterwards. Taking the racing industry in its widest context, the high level of finance we get from some companies for sponsorship could be spread more evenly in order to cater more widely for the range of racing owners and trainers who have put in a tremendous amount of money in their own way to keep their interest in the racing industry.
The contribution of bookmakers could be more significant in the development of racecourses and facilities. I would like to question the Minister as to what contribution bookmakers made to racing at the moment. My information is that it is not significant; in fact, it is only nominal. That could be looked at in the context of generating extra finance.
Communications have been referred to in the report. The need for modernisation and improving our standards was never so important as now in the context of the improvement in satellite communications throughout the world. The day is fast approaching when TV cameras from Australia will be beaming on to Irish racecourses and betting taking place on Ireland and Australia races and vice versa. That day may not be very far away and the impact TV can have, in no matter what country, is an important selling point for the country at large. The first impressions a person from outside a country receives of that country are important and the importance of the racing industry as a catalyst for tourism promotion and a contributor to the development of the economy cannot be overestimated in this context.
Sunday racing has become a novel feature which has caught the imagination of and is being supported by the general public, but I hope it will not be over-emphasised as an essential solution to the financial problems of many of our racing boards at the moment. Sunday is a day much revered by the ordinary people. In my opinion we have opportunities enough with the present number of race days without over-relying on Sunday racing. We must recognise that we are living in a society which has a gambling instinct and if racing were arranged for seven days a week you would find the same people ending up at the race meetings every day. I fear that by developing too many race days and including Sunday, normally a traditional family day, we could over-kill in this regard to the detriment of many families.
Another area we could examine in the context of our racing industry is the inconsistency of stewards' inquiries. In my opinion, stewards are too old. With all due respect to their involvement in the industry, we should set an age limit on the stewards involved at race meetings, and they should be properly trained in order to provide more consistent decisions. In addition, the advent of computerisation to tote facilities is an important step forward. All too often I see people with permanent employment getting part time employment on Saturday or Sunday on the tote — the computerised tote as it is now.
There is an opportunity here for racing concerns and the Racing Board to insist that young people coming out of school with no hope of employment, who are well trained in secretarial courses and computerisation, should have this opportunity to gain some experience and get some financial help at a stage in their careers when they are vulnerable. At local level at the racecourses the Racing Board and the Turf Club could give a lead here in encouraging young people into that employment rather than giving it to people who are mostly civil servants — with all due respect to the civil servants present. If we want to get young people more involved in the racing industry and ensure the continuation of that industry, they should be brought more into racing under local administration and governing level. We have perfect examples of that.
I was sorry to see the report did not go in depth into the administration of the racing industry to the extent of discussing, examining and assessing the Turf Club and the Racing Board and whether there is a need for both. We have in the racing industry an opportunity to amalgamate many of the functions of the Turf Club and the Racing Board at the moment. Perhaps loyalty is coming before interest in relation to the racing industry in which there is an opinion abroad, rightly or wrongly, that the Turf Club is a very exclusive club and the ordinary person involved in the racing industry would find it very difficult to become involved in that very elite organisation. The ordinary people involved in the racing industry would articulate that opinion. From a public relations point of view alone, the racing industry should analyse to see how it can achieve greater involvement at local level in the operation, administration and governing of the racing industry. All too often, wrongly in my opinion, the common perception is that the hard hat is a symbol of power on racecourses.
Finally, I want to thank Lord Killanin and his committee for a very detailed and extensive report. There is an opportunity in this debate here today to appeal to the Government and highlight the fact that the racing industry is in a bad financial situation. Many racecourses are in the red and rationalisation is needed, as can be brought home by the fact that in Kerry we have three racecourses and I do not think we have a trainer. We might have two permits in the whole county of Kerry. In the huge county of Cork, probably the greatest county in Ireland from the point of view of breeding and training horses, the facilities are very poor, with only one racecourse. That is an example of the industry being at a crossroads. Now we have to appeal to the Government to provide some source of financial aid to ensure that this important industry continues with the contribution it has made to Irish life, the Irish economy and the Irish psyche.
At this stage of the day I will make just a few brief comments because time is getting on. First, I welcome Lord Killanin to the House. It is good to know that among all these Tipperary men Senator Ferris was referring to at least one man from the west who knows something about horses is here. I congratulate the commission members because I understand that in the preparation of this report they accepted no expenses during the time. That is to their credit. As Senator Magnier said, the report has become a textbook for the industry and is used abroad as well as here. I agree it has implications for a large section of the population, indeed, for everybody including the housewife; not, as Senator Ferris said, from everybody down to the housewife, rather downwards from the housewife to everybody.
The bloodstock industry is in what I call the traded sector, that is the sector of economic activity which is exposed to international competition or involves the provision of goods and services to international markets. The bloodstock industry on an international level gives rise to high added value exports in terms of sales of animals and sales of nominations. Consequently, the industry contributes in no small measure to a healthy balance of payments. These days we are hearing continually about the importance of increasing our exports in order to generate long-term economic growth. The bloodstock industry with its breeding, trading, racing and studs, is an industry we should encourage by every possible means, and this brings me to the nub of the matter.
I cannot imagine that breeding, training etc. could possibly survive or thrive without a viable racing industry. I welcome any incentives offered for racing. I know the Minister cannot make any promises today but I am sure he will take back our views to the appropriate quarter. I welcome Senator Magnier's proposals on taxation and his ideas on reinvesting in racing. The lower tax rates would leave the punter with more money to wager and I believe that he or she is likely to do this. The total betting turnover would increase and the Exchequer would ultimately benefit from this increase.
I would like to draw the attention of the House to one other point which is important. On page 202 of the report mention is made of the various prize moneys. The average prize for a flat race is £5,756 and for a national hunt race is £2,317. That is a ratio of about 6 to 2, which is a rather unfair allocation. Probably about 60 per cent of the prize money goes to flat racing, excluding classics and about 40 per cent to the national hunt. If we examine the revenue generated by betting we will probably find reverse proportions. If we look at the figures for France, West Germany, or the US there is a much fairer distribution between the two types.
The Minister referred to the small man who keeps a couple of foals. It is becoming ever more difficult to get a very good horse for flat racing but for a relatively small investment, he can still have a good hunter. We need some scheme to rejuvenate national hunt racing and one way in which this could be done is by increasing the prize money. Another suggestion at which the Minister could look is that when betting shops apply for a licence a levy of £500 per year per shop could be applied. There are over 2,000 shops in the country — perhaps a few more if all were told — but at £500 each, that makes a total of £1 million. That is a simple and effective financing method. I would like to see those funds allocated back to national hunt racing. It would do a great deal of good.
The Turf Club and the Irish National Hunt Steeplechase Committee have done a tremendous job down through the years. However, as one or two Senators have mentioned already, they are self-perpetuating in that they elect themselves. They are funded by the owners, but I am not sure the owners get to see the accounts. I am not suggesting that anything untoward ever happens, but as we draw nearer to 1992 and with the Fourth Directive of the European Community imposing upon corporations, indeed, private companies, the obligation of disclosure of funds, it would be no harm if we could get a peek at them. It might help to open it up just a little.
Finally, I would like to thank Senator Magnier for bringing this report before the House. It is thanks to men like him, Vincent O'Brien and John Mulhern, to mention but a few, that the industry is thriving. I welcome Senator Magnier's suggestion of a joint Oireachtas committee to look into any further details. In general, I welcome the report. It is a good report and one which commends itself to the House.
Like the other speakers, I shall be very brief, not just in order to facilitate the House but because I have a very limited knowledge of the subject on which I am speaking, which is not without precedent in this House. While welcoming this report, which is a very comprehensive and useful one, I would like to express one or two reservations about the way in which it is being treated in this House and about the report itself.
First, as a non-racing person, I would like to express a certain amount of puzzlement about the image of the industry. While this industry is obviously of great importance to our economy and even more important to tourism and employment, it has a very strange and very distinctive image and one which could mean that the population as a whole would be reluctant to see it subsidised to a large extent. I welcome what Senator Ferris said — and if it is good enough for Senator Ferris and the Labour Party it is good enough for me — in welcome of stallion fees being exempted from tax. If he believes that this makes good economic sense, then they should be exempted. If giving incentives like this would lead to increased employment and an increase in the wealth of the economy, further incentives should be looked at.
I would like to say something in general about the industry. I do not think people feel that they can identify with the industry. This is an industry which is glamorous in a sense, but it is very important to consider the benefits from it. It is important to remember that in this large industry there are the punters, the owners, the trainers, the breeders, but the beneficiaries are very few. As Senator Hogan said, it is an industry with which the ordinary punter does not identify. Nowhere was that more underlined than in the case in England of Lester Piggott, where the punters' great hero has ended up in jail — the man who has done more for British racing than anybody else.
It is generally believed — and I do not want to be sensational here — that the industry is not completely straight. We all know that horses have been pulled back and that strange things have gone on in this industry, but one person appears to have taken the rap for it all. It is important to underline that that sort of incident does the industry no good. It does not make the punter identify with it. That should be taken into account by the Minister and the Government when considering the recommendations of the report and also the reason for the industry as a whole being given the preferential treatment that it is at present receiving. I do not join quite so enthusiastically with the welcome given to the Minister's speech.
Senator Magnier recommended that we set up a joint Oireachtas committee on this issue. It would quite simply act as a bar on the recommendations or the postponement while a committee considered and reported on them in so many years' time. We have a real problem in this House and in the other House about reports of this sort. I could not help noticing that this commission was set up in 1982. They reported four years later, in July 1986, having done an enormous amount of work and we are only now debating the report in this House — two years later. The problem obviously was recognised six years ago.
I would just like to go through a couple of things the Minister said in his speech. It is indicative of how difficult it is for people like Lord Killanin and those who have written this report actually to get anything done. Whereas some of the minor recommendations of the report have already been implemented, the major ones are still hanging in the air and have not been acted upon. I was disappointed to read in the Minister's speech his response to the recommendations of this commission. I have no axe to grind, not being qualified to judge the merits of these recommendations. I accept them because they are written by people who were involved in the industry and who are experts.
The Minister's speech states that the main recommendation of the report is the setting up of a thoroughbred industry board to replace the Racing Board. It would have responsibility for: (a) planning, financing and developing racing and the development of an ongoing strategy for breeding; (b) it would have power to establish subsidiaries and be given responsibility for the National Stud, the tote, a new racecourse management company, the Equine Centre, the racing apprenticeship centre for education and (c) be financed by on- and off-course betting. That makes a lot of sense. It is the principal recommendation of this report which took four years, which the Government have had two years to consider and which we are now just considering in this House apparently for the first time.
The Minister goes on to say that all in all he did not favour the adoption of the concept of a single thoroughbred industry board. What is the value of a report like this if the Fianna Fáil Government which set it up will consider and then just dismiss something which they will not implement? They should take these things more seriously. The Minister said the report recommends that the National Stud should set charges at rates prevailing in its area and have its borrowing limit increased to £5 million but he dismissed several recommendations of that sort. The only recommendation he accepts is so minor it is laughable. He said he is in favour of the recommendation that the suffix IRL be used to identify Irish horses and he is happy that bodies with responsiblility in this area are endeavouring to have this recommendation implemented. He rejects the other recommendations or gives the worst possible response to a report like this. He says that these recommendations require further detailed examination, particularly with regard to the legal considerations.
These recommendations have already had six years of detailed examination and that is why I reject Senator Magnier's obviously bona fide suggestions that an all-party committee should consider matters which have already been considered for six years and which will then go back to the Government for consideration. It would have the effect not of having the recommendations in this report implemented but exactly the opposite. It would have the effect of delaying them. The Minister should not hide behind the fact that there are complex and legal difficulties because the Government have legal people and draftsman to advise them.
While I thoroughly welcome this report — what I have read of it is very good, effective and diligent — the Government's response is very disappointing. It is really not good enough to have a two or three hour debate today and then dismiss the matter and say these things need further consideration. What we should see if these debates are to have any meaning is certainly an opening speech by Senator Magnier, who is an expert on this, and several speeches from anybody else, but also a well prepared case by the Government in response to this report or reports of this sort. That is exactly what we have not got. What we have got is a mealymouthed, weak, milk and water response from the Minister saying these have to receive further consideration. I am very disappointed in it.
An interesting thing happened to me last Sunday. I was at a lunch and there was a debate as to whether this House should be abolished so I declared I was coming up here to move that the Seanad note the report of the Killanin Commission. Generally the people were very embarrassed at having suggested such a thing when they found out what I was going to do. When the third speaker got up here today, declared that he knew nothing about the industry and went on to say that he expected somebody to inquire into it, it behoves me to answer him. He is a prominent Member of the House and has plenty to contribute in other areas on matters he knows about.
I will go through what he said and the House should learn from what happened here today. What is the point of a member standing up in front of a senior Minister who is in a rush to get out of the place, who could not listen to the last number of speakers, after he declared he did not know what he was talking about? His remarks should be ruled out of order as they were total rubbish. He went on to say that people should be let in to racecourses free. This proves he does not know what he is talking about because the only source of revenue for race tracks is what people pay going through the gate. He also spoke about building an all-weather track. Who will build the track and why will they build it? To let all the people in free? That kind of thing is not representative of what goes on in this House and the Minister should not heed him.
The Senator said there would be no more money for this industry, that we were clawing back the small people's money. Maybe I did not explain it properly. Going from 10 per cent to 7.5 per cent is not a hand-out; it is really an investment and for the benefit of the Exchequer, the betting industry and, of course, the bloodstock industry but, more importantly, for the wider economy as a whole and all the other sectors that are integrated in the racing industry.
He then said that there was a lot of money circulating in the horse business. It is a pity he did not go to Bellewstown or his local meeting because he would find out that he was mistaken. He made one point of some merit, that he preferred to look at the national hunt racing as opposed to flat racing. I am an industry man and I share that Irish trait. Most people feel that way but the reality is that tens of thousands of people involved in the bloodstock industry, and whom we are supposed to represent, are dependent on the export industry and dealing with the world at large. It is very important for us to have a flat racing industry. When people come from abroad to see our racing many of them will demand flat racing because they are not into national hunt racing. However, we might be able to educate people in that regard.
He made another point that the trainers in this country are paying their people very badly. The ordinary trainer who takes his horse down, say, to Limerick city and wins £900 on a race will pay £200 costs in running that horse. The jockey gets 10 per cent if he wins, that is £90, the trainer will get another 10 per cent. By the time he has filled his car with petrol and given a drink to the winning owner — which is the custom — he is out of pocket. From the remaining £500, unless you work a loaves and fishes-type miracle, you could not look after everybody out of that amount. The structure of this industry is wrong and unless it is changed at Government level, it can never be put right. All the little things can be put right by people in the industry.
Another speaker rightly mentioned that it costs about £6,000 a year to keep an animal in training and that anybody who had anything to do with racing is employed in that area. We also have an image problem which Senator Ross mentioned. I am not concerned with the person who is paying £6,000 for the pleasure of making a fool of himself; I am concerned about the tens of thousands of people involved in the industry. Who represents them in this House? They have a voice as well and it is very important for them that we have a strong bloodstock industry. The main thing the whole debate has been about really is money. Unless the racing industry gets what they get in other countries, no more or no less, we will not be able to compete. The industry is very important for this country; it is a very big part of our GNP. The ball is in our court. The people, the raw material, the horses, the land, the foreign investment, and most important, the people in the industry are here. It is up to the Government. They have to decide if they are going to let the race tracks fall into disrepair, as they are about to do, or if they are going to give this industry a boost and safeguard the jobs I am talking about. Many of these people are very worried about what they will do if anything happens to the racing industry. Many of them do not have third level education. They live in rural areas. The racing industry can give a huge boost to the wider economy. This is a point I have tried to make today, perhaps not very well, but that and the image go together. This is something we need to work on.
Senator Ross mentioned committees. I agree that we do not need more committees; we need action at this stage. I was very pleased to hear the Minister say there is a memorandum before the Government about the report on racing, but in a broader sense the industry is big enough for some sort of a joint committee to look at it on an ongoing basis, not just to comment on the report.
I would like to thank Senators for their very constructive and wide-ranging contributions to this debate. I am also very grateful to the Minister and the Minister of State for being with us and responding so positively to the debate, and also to Lord Killanin.
Question put and agreed to.