The anonymous contributor
Dear Crikey, Letters
who attempted to cast doubt on John De Vries' financial analysis
What Federal Hotels is making ... AN ANALYSIS
of the costs to the taxpayer incurred by the Tasmanian Government giving away a 15 year monopoly licence to Federal Hotels to operate poker machines in Tasmania, by making (incorrect) reference to his family, seems to have conceded on the substance of the issue – the figures.

Such desperate slur tactics are not surprising as DeVries' calculations are based on publicly available tax information and broadly accord to those of the only other independent analysis done to date – that of Citigroup then director equity research Jenny Owen.

Even the State Liberal leader has been able to use his calculator to see what was at stake - telling the Tasmanian Parliament’s Public Accounts Committee that "I have calculated that the rights to do that (run Network Gaming) and to run the two casinos, in gross profit terms pre-tax, are well in excess of $1 billion – you can work that out from the taxation numbers."

The boss of Treasury’s only public reply to this figure to date (in the PAC) has been "I don’t know, I haven’t done that sum." He also admitted that even a simple interstate tax comparison was not done before the Federal Deal was concluded, surprising even to the low-key Chair of the PAC, Tony Fletcher. Hansard records the following disturbing exchange:

"Chair – I don’t have the backing of Treasury and I don’t have you’re skill and training but I want to make a judgement as to whether you achieved a good result or not.

Mr Challen – yes, I understand that.

Chair – How do I do that? If you cannot provide me with something to measure against, am I take to take your word as the sole decision maker in relation to this matter?

Mr Challen – I am not sure how I can help you with that Mr Fletcher."

Federal boss (and with his three siblings, the sole owner of this private company), Greg Farrell acknowledged that he considered the possibility of not having his licence automatically renewed, "extraordinarily remote" and that even before the vaunted "cap" (which actually further increased the number of poker machines), the market was "in balance".

Tasmania faces a pervasive crisis in health and community services after 15 years of governments (initially with no choice) prioritising debt repayments over the needs of an ageing population.

The Government handover of $200 to 300 million of taxpayer dollars to four wealthy individuals in this context cannot be defended by name calling.

If the Government disputes De Vries' and Owen’s analyses it should do so with the figures of its own, or renegotiate this disgraceful deal and, in the process, end the (unmonitored, unevaluated) system of industry self-regulation of patron care, set a socially and economically responsible cap based on social research, not Federal’s posturing, and get the best possible market price for these to invest in sorely needed health services.

This is not pie in the sky idealism – it is what the premier of the only other state where the ownership of poker machines is separate from their venue of operation has already promised. The market expects Steve Bracks will get Victoria up to $3 billion in the process.

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