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The Victorian Racing Industry (VRI), comprising Racing Victoria (RV), Greyhound Racing Victoria (GRV) and Harness Racing Victoria (HRV), has welcomed the Victorian Government’s decision to increase the Point of Consumption Tax (POCT) pass-through to the VRI in connection with an impending increase to the POCT rate.
The Victorian Government has today announced that following the passage of legislation, effective from 1 July 2021, the POCT on wagering by Victorian residents will increase from 8% to 10% of Net Wagering Revenue (NWR), bringing it into line with the POCT rate currently in place in New South Wales.
The Government has also announced that the VRI's gross share of POCT receipts from wagering will be increased from 1.5% to 3.5% of taxable NWR. However, on a net basis, after the deduction of the VRI's 'make-whole' obligation under the remaining term of the current Victorian wagering and betting license, the VRI expects to retain at least 1.7% of taxable NWR under the new POCT arrangements. This is comparable with the NSW racing industry which receives the full 2% industry share of taxable NWR in addition to other favourable wagering taxation arrangements.
Subject to the passage of legislation, the new POCT arrangements are expected to increase the VRI's net receipts from the POCT by around $20 million per annum from 2021-22, as compared to the VRI's expected net receipts under current POCT arrangements.
When introducing the POCT, the Victorian Government committed to the three codes of the VRI that they would be no worse off both individually and collectively under the new tax regime. The Victorian Government has also committed to maintaining the national pre-eminence of the VRI and its competitiveness against interstate racing.
The increase in the VRI's share of POCT is an important step in closing the gap and addressing the relative Government funding differences between Victoria and New South Wales. Current favourable Government funding arrangements in New South Wales are enabling it to aggressively chase wagering market share and participation from Victoria, thus impacting industry funding, events and tourism.
This increase in funding will assist the industry to fund its operations and support jobs across the state, and also to continue to maintain its investments in prizemoney, important animal and participant welfare initiatives, and the development and maintenance of world-class racing and training facilities and infrastructure.
The VRI is one of Victoria's most significant industries and makes a substantial contribution to jobs, communities and the state economy. It delivers $4.34 billion in economic value each year – around half of this in regional Victoria – and supports over 34,000 full-time equivalent jobs.
Quotes attributable to RV Chairman, Brian Kruger:
"We are pleased that the Government will introduce legislation that will amend the net POCT receipts for the VRI from 1 July 2021.
"We welcomed the opportunity to contribute to the POCT review, the outcome of which is important both for the future of our industry and in addressing the sustained challenge by New South Wales on Victorian racing and its major events. The increase will assist the VRI in closing the gap with New South Wales racing in terms of the funding support it receives from government funding streams.
"The impending adjustments to the POCT arrangements are a vital step in helping ensure the sustainability of the VRI which supports over 34,000 full-time equivalent jobs and delivers more than $4.34 billion in economic activity annually to Victoria.
"This additional funding support will allow us to continue to invest for the benefit of our participants, our other stakeholders and for the overall future prosperity of the Victorian and Australian thoroughbred industries.
"We also remain focused on working with the Victorian Government to finalise the terms for the next Victorian Wagering Licence post 2024 and securing important ongoing funding outcomes for the industry."
Quotes attributable to GRV Chair, Peita Duncan:
"GRV welcomes the planned changes to the POCT revenue sharing arrangements with the VRI.
"These arrangements will assist in ensuring Victorian greyhound racing continues to be the premium greyhound racing jurisdiction in the world. This will assist us to continue to increase prizemoney to our participants, as well as allowing us to further invest in animal welfare and safe racing initiatives.
"We thank the Victorian Government for their ongoing support to our industry."
Quotes attributable to HRV Chairman, Dale Monteith:
"The amendments announced to the POCT arrangements for the VRI are welcome news for the Victorian harness racing industry and will help narrow the funding gap to New South Wales.
"Furthermore, these commitments by the Government are an encouraging step to ensuring the ongoing viability of the harness racing industry in Victoria for years to come. HRV thanks the Government for their continued support of our industry."