I will give a short overview of the industry and discuss the key achievements of the industry in the last few years. I will also discuss some current concerns.
There are 17 greyhound stadia in the Irish Republic, nine owned directly by Bord na gCon and eight privately owned. These provide the nucleus of the greyhound industry ecosystem which is spread throughout rural Ireland. Approximately 11,000 people derive employment both directly and indirectly from the industry in Ireland. It is responsible for over €500 million in economic turnover. Most of these jobs are rural based and in some locations the greyhound industry provides the only level of meaningful employment. In 2010 the greyhound industry will receive €11.8 million via the horse and greyhound fund. However, during this period Bord na gCon will return over €5.5 million in direct and indirect taxes to the Government. In addition, based upon 2009 figures, Bord na gCon will receive €6.2 million directly via the fund from off-course bookmakers as a result of the 20% split the sport receives from the 1% levy on off-course betting. Therefore, at current levels of funding, the Irish greyhound board costs virtually nothing to taxpayers while providing nearly 11,000 jobs.
Clearly that level of input is not sustainable and policy makers must understand that to protect this level of employment, meaningful long-term investment must be put in place. We are all aware of the level of ongoing investment the IDA and Enterprise Ireland make in companies which do not provide a fraction of the employment levels the greyhound industry supports. With moneys received from the horse and greyhound fund we have delivered on a well-structured capital development programme which has meant that we now have 11 fully developed facilities nationwide. The level of investment comes to over €90 million during this period. Developing our facilities means we can market our stadia to a wider audience that allows our stadia to go from loss making to delivering a positive cash contribution to the industry. Taking Cork and Mullingar as recent examples, our capital investment programme in these locations has yielded over 10% per annum without considering the wider economic benefits to the community of having developed facilities.
Our current capital development programme in Limerick has enabled over 250 people to gain employment over the course of construction of the stadium and will result in over 100 people being employed during the course of its operation. Its construction is a very clear example of effective regeneration in the entire mid-west region. The level of local interest from schools, hospitals and clubs with regard to running community and fund-raising events at the stadium has exceeded all expectations. This again shows the value and economic benefit of the greyhound industry to Ireland.
Bord na gCon contributed €7.9 million to overall industry prize money in 2009. Based upon 21,370 races, this corresponds to an allocation of €369 per race. This level of investment is very prudent given the cost to the greyhound owners in getting six runners entered and ready for competition. Each year the cost to greyhound owners of keeping the "greyhound pipeline" in operation is €257 million. This is a significant return to local rural economies. However, during this time the greyhound owners compete for approximately €11 million in overall prize money. It is clear from these figures that this is not a good "financial" investment for the greyhound owners. It is clearly the passion for the sport and the dream of winning a derby that keeps people engaged with the industry. For that reason, we must ensure that any new legislation, such as the Dog Breeding Establishments Bill which I will discuss later, cannot derail this level of "emotional" investment.
Accordingly, nobody can reasonably state that Bord na gCon is paying too much in prize money grants to fund racing. The opposite is the case. Following the significant reduction in the 2010 horse and greyhound fund we had to reduce prize money grants to compensate for this reduction. Given the significant level of employment, this clearly is not the right economic thing to do, but we had no choice with the reduced level of funding from the fund in 2010. The industry cannot sustain any further cuts in the horse and greyhound fund in 2011. The fund has already been reduced by 23.6% since 2008. We have taken those reductions on board. The industry simply cannot take any further reduction. To do so would mean dramatic reductions in employment which will ultimately cost the taxpayer more in social welfare payments.
The greyhound industry has been enormously successful in helping various clubs, social groups, schools and social causes in raising over €7 million a year in funding via the use of its stadia. This ensured that the needs of these very necessary causes are met but also ensured that Central Government did not have to foot the bill. Over the past 12 months, for example, Mourne Abbey Community Development Centre in Cork raised €34,000, Edenderry GAA raised €25,000 and Templeogue soccer club in Dublin raised €25,000. It is an important source of funds for such worthy causes.
While trying to encourage wider industry growth Bord na gCon has also been very focused on running a streamlined commercial operation and trying to ensure that high levels of capital surplus can be delivered each year to fund capital developments and pay down capital debt. In both 2007 and 2008, we delivered a surplus of over €5 million each year as against a surplus of €2.2 million in 2006.
In 2009, we have again been very much focused on cost controls given the drop in funding and consumer spending and we have reduced our labour costs by €1.3 million. This, in combination with other reductions in 2008, represents a reduction of almost 25% over 2007 labour figures. In addition, we have reduced our operating and administration costs by more than 23% from €72.6 million in 2007 to €55.8 million in 2009. There are not many other semi-State companies which can show this level of cost focus. However, this has been a necessary approach for us to survive and be able to continue to support the wider industry. We plan to continue this focus on operational efficiency in 2010 and beyond.
Not only do we face many funding pressures as a result of the reduction in the fund, we continually need to invest in welfare and integrity programmes to safeguard the industry. These investments clearly are significant with more than €6 million a year being provided for this purpose. Integrity is a key cornerstone of our industry and this needs continuous investment and review.
Bord na gCon has put significant effort into full compliance with corporate governance guidelines. This has resulted in overall improved organisational performance. This then allows more focus on industry development and growth.
It is very clear from what I have said that the greyhound industry has been an outstanding success story in recent years, especially in terms of how it has transformed itself into a widespread exciting consumer brand. Based on inquiries from other countries, they too want to replicate the Irish success story that is greyhound racing.
The greyhound community is currently at serious risk from the Dog Breeding Establishments Bill due before the Dáil in the very near future. We made clear that the regulation and management of the greyhound industry was already fully legislated for under the 1958 Greyhound Industry Act. We have secured legal advice which shows that under the 1958 Greyhound Industry Act, we can visit and inspect any establishment where greyhounds are kept. This conflicts with the concern that we have no right to visit and inspect. This legal position was proved in 2010 by a High Court ruling which upheld, without reservation, the right of officers authorised by the Irish Greyhound Board to visit and inspect any premises where greyhounds are kept.
Furthermore, our legal advice indicates that the 1958 Act can be easily amended by way of a suitable regulation to confer legal power on the Irish Greyhound Board to support the welfare and proper treatment of greyhounds by enforcing legal sanction to our findings. Accordingly, we believed this removed the one concern officials suggested as lessening the validity of the 1958 legislation in the context of the proposed Bill.
This is a clear and efficient path to a workable solution to the current concerns the Irish Greyhound Board has with the current Dog Breeding Establishments Bill. Current proposed amendments by the Department of the Environment, Heritage and Local Government simply do not address the genuine fears of the greyhound industry. We have the legal power to visit and inspect any place where greyhounds are kept. For the past 50 years we have been making these inspections and where any breaches of welfare conditions have been found, we have made recommendations which the greyhound people have implemented. However, if we want to make any breaches of welfare concerns amenable to law, there is an opportunity to do so by way of our own regulation. That is the most efficient way of doing that.
The measures being introduced for other breeds have been in place for greyhounds since 1958 and our record on welfare is exemplary. The welfare initiatives introduced by the industry are looked on around the world as a model of best practice. We are now being asked to submit to dual registration and double inspection systems. We will be saddled with unworkable definitions pertaining to the greyhound breeding cycle. We recognise the benefits of the legislation to outlaw puppy farming but we simply cannot allow the misguided extension of it to effectively destroy the greyhound industry in Ireland, whether this is the intention or not. It is a well-run industry driven by continuous improvements in welfare standards and populated by people who care deeply about the animals in their care. It is not too late to resolve this issue but we need more meaningful engagement and allowances to avoid this hammer blow to this industry.
The Irish Greyhound Board would like to see any necessary legislation being adopted out of a careful consideration of all the industry facts. There is some suggestion that this Dog Breeding Establishments Bill in its current format will improve the industry. Unfortunately, the consistent view from all industry stakeholders is that this view is an idealised one. However, let us consider some facts. More than 91% of breeding in Ireland is done by small breeders with three litters or fewer. Furthermore, 76% of the breeding in Ireland is done by small breeders with a single litter. Asking people who clearly would not consider themselves to be breeding establishments to pay an annual fee of €400 as well as submitting themselves to another inspection routine with unspecified standards which would mean significant additional cost will be the inflexion point for these people to leave the industry.
Furthermore, many smaller breeders would in the past have stayed in the breeding industry because if they had a good line, they would be able to keep breeding to recover costs. Now with the maximum number of litters set at six, this eliminates this outlet. Consequently, considering all these facts, we will have a massive reduction in the number of people choosing to participate in greyhound breeding. This will mean the destruction of this industry.
We will also witness a situation where breeders will not want female pups because once one has six or more bitches capable of breeding, one is considered a breeding establishment which will mean extra costs. Thus, the Bill in it current state will lead to the creation of welfare problems for the greyhound industry. The introduction of micro-chipping will cost the industry more than €1 million a year at a time when we are being asked to survive on significantly less funding. This will mean more costs for the greyhound owner. All considered, the assertion recently that this Bill will ensure that the vast majority of people who race their greyhounds will not be affected does not bear scrutiny.
Furthermore, one needs to consider the logic behind the article in last Sunday's edition of the Sunday Independent which had as its main thrust that overlapping bureaucracy needs to be reduced to have a more streamlined Ireland. Therefore, in light of the focus on efficient use of public resources, it is very hard to explain or defend a double inspection system in this modern age.
The list of modifications currently proposed is meaningless and betrays the lack of any willingness to recognise ours as a well-run industry. For example, allowing the Irish Greyhound Board to accompany the new duplicate proposed inspection without a clear role in the decision-making process is futile and does not give any comfort. This is presented as a concession but it is a folly of wasted human and financial resource. I cannot see the difference between the previously proposed one litter every 12 months and the new concession of a maximum of three litters every 36 months in terms of the ability of a small breeder to earn a living. I am sure members will all agree that this is not a concession. The final concession of a 12-month review clause with no clear parameters and scope is meaningless. Furthermore, within 12 months of this Bill being enacted in its current form, the industry will have already haemorrhaged too much talent and energy to ever regain its position as a world leader.
Regardless of whether it is intended, enactment of this Bill without further engagement with those who will suffer from its consequences will lead to the destruction of a fine traditional Irish industry. This industry is acutely aware of and educated on welfare issues and its loss would be a mortal blow to rural Ireland. We acknowledge the willingness of the Department of the Environment, Heritage and Local Government to begin discussions with the greyhound industry but much more engagement, flexibility and understanding of the greyhound industry is needed to ensure the greyhound industry is not undermined.