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Opening address by Simon Coveney T.D., Minister for Agriculture, Food and the Marine. Draft Horse and Greyhound Racing Fund Regulations 2011

 Draft Horse and Greyhound Racing Fund Regulations 2011

Joint Committee on Communications,

Natural Resources and Agriculture

Chairman, Members of the Joint Committee,

Background

The horse and greyhound racing industries receive financial support from the State through the Horse and Greyhound Racing Fund (the Fund) under Section 12 of the Horse and Greyhound Racing Act, 2001 (the Act). Payments are made from the Fund to Horse Racing Ireland and to Bord na gCon by my Department. In the period 2001 to date a total of €730.46m has been paid from the Fund to the horse and greyhound racing industries in accordance with the provisions of the Act.

State funding provided through the Fund is pivotal to the survival of the horse and greyhound racing industries.

The current ceiling on the Fund (€730.46m) has been reached.  In order for my Department to continue to make payments from the Fund to these industries in 2012, the aggregate limit on the Fund must be increased from the current limit of €730.46m to €786.75m so as to allow for the provision of  €56.29m to Horse Racing Ireland and Bord na gCon, which is the amount allocated for this purpose in  Budget 2012. The €56.29m will be allocated 80% to HRI (€45.03m) and 20% to Bord na gCon (€11.26m) in accordance with Secion 12 (6) of the Act. To give effect to this Estimates allocation it is necessary, under the relevant provisions of the Act, to have the increase in the Horse and Greyhound Fund specified in a regulation.  The aggregate limit of the Fund has been increased in this manner in 2004, 2009 and  2010.

Importance of the horse and greyhound racing industries

Funding of both of these organisations - Horse Racing Ireland (HRI) and Bord na gCon (BNG) - supports two very important productive industries and helps to sustain the role of the thoroughbred horse and greyhound breeding, training and racing enterprises in the development of the rural economy. These industries, together, account for an estimated 27,000 jobs, generating approximately €1.4bn in economic output and make a vital contribution to the rural economy including farm incomes. These industries produce a very good return on the State’s investment and are a significant net contributor to the exchequer. They tick all the boxes in terms of employment, foreign direct investment and they are the type of export-orientated industries we need. Not alone that but they are very much part of our international reputation.

The Fund has allowed Ireland to develop into a world centre of excellence for horseracing and has allowed Horse Racing Ireland to undertake a capital investment programme that has underpinned growth in the sector.

The funding being provided to the greyhound racing sector helps sustain a long standing tradition. This funding underpins the economic activity in what are in many instances, less affluent regions of the country. It has also contributed significantly to the improved facilities now available at greyhound tracks around Ireland.

Broadening the tax base

The funding mechanism, which was established under the Horse and Greyhound Racing Act 2001 Act, has proven not to be satisfactory insofar as it has required an increasing level of Exchequer funding, over the years, due to successive cuts in betting duty coupled with an increasing amount of betting activity migrating to tax free platforms. The amount collected from excise duty on off-course betting has declined from a peak of €58.9m in 2000 to an estimated yield of €27m in 2011. Since 2002  the amount paid into the Horse and Greyhound Racing Fund has been a combination of the amount collected in excise duty from off-course betting plus direct Exchequer subvention. It is against this background that the Government recently decided to proceed with legislation to amend the Betting Act 1931. This will provide for the extension of the betting duty regime to remote betting. It is the Government’s intention that this legislation will be introduced in the first quarter of 2012.

The Draft Regulation

The draft regulation before you today provides for an amount totaling €56.29m to be allocated to the horse and greyhound industries in 2012. This will be comprised of approximately €27m from Excise duty on off-course betting and the remaining €29.29m in the form of a subvention from the Exchequer.

The 2012 allocation of €56.29m compares to €57.29m in 2011 – a reduction of €1m.

Forthcoming developments

I announced on Monday that I will shortly be commissioning an external review of the structures and legislation governing the horse racing industry. The 1994 Irish Horseracing Act and the 2001 Horse and Greyhound Racing Act achieved structural reform but I believe the reform process now needs to be completed to ensure that governance and administrative procedures are modernised and fully effective in supporting a world-class horse racing industry. In taking this action I am acutely aware of the huge effort and commitment given by so many in bringing the industry to where it is today. But now we need to build on the achievements of our thoroughbred sector to date and to provide a framework that will facilitate all of us, concerned with the well being of the horse industry, to achieve grow and develop this great industry and to optimise it’s potential.

I believe that the funding of the horse and greyhound sectors has to be placed on a more secure footing and I will be including this matter in the review process.

Conclusion

As I stated at the outset State funding provided through the Horse and Greyhound Racing Fund is pivotal to the survival of the horse and greyhound racing industries.  These very important industries require this funding for their survival and in order to facilitate growth and development into the future. The Government has made provision in Budget 2012 to allocate €56.29m to the Horse and Greyhound Racing Fund. In order for my Department to distribute €56.29m to HRI and Bord na gCon in 2012 the aggregate limit of the Fund to date must be increased by €56.29m pursuant to the provisions of Section 12(5) of the Horse and Greyhound Racing Act 2001. On that basis the draft regulation which is being considered by the Committee here today provides for an increase in the current aggregate limit from €730,461,713 to an aggregate figure of €786,751,713 – the cumulative provision in the Fund since 2001.

I am circulating a copy of the draft regulation to the members of the Joint Committee.

Section 12(13) of the Horse and Greyhound Racing Act, 2001 provides that a draft of these regulations be laid before both Houses of the Oireachtas and a resolution approving the draft be passed by each House before the regulations are made by the Minister.

I ask you for your support so as to ensure that Horse Racing Ireland and Bord na gCon receive the funding provided for in Budget 2012 and that the very important role of these industries, and the employment supported and economic activity generated, is sustained.

I commend this regulation to the Committee and I look forward to discussing any matters arising with you.

Thank you.