That's a surprise, Mr LennonBy JAMES BOYCEThe Premier’s claim that “I am not interested in what the National Competition Council wants us to do” in relation to the Council’s questioning of the deal granting Federal Hotels a monopoly license to operate poker machines in Tasmania until 2023, will be a surprise to small businesses and farmers in the state - who have often been told by the Government that there was no alternative to seven day a week trading and the removal of various regulated markets because of NCC requirements. Mr Lennon’s claim that the alternative to the deal was a proliferation of poker machines, similar to Victoria, is also revealing. Victoria has in fact significantly less poker machines per person of gambling age, than Tasmania will have under the new ‘cap’ - which Federal owner Greg Farrell has admitted to the Public Accounts Committee was set at the point of market ‘balance’ and not even the Government pretends was based on any social or economic research. The threat made by Mr. Farrell and repeated by the Government since, that there would have been another 1500 machines without the deal because of Federal’s need to protect their competitive position after 2008 is transparent nonsense. Neither Federal nor the Government have ever been able to answer the obvious question why any company would flood the market with new machines that it would soon have no legal right to operate. Mr Farrell has admitted to the PAC that he considered the possibility of not having his licence automatically renewed ‘extraordinarily remote’. Mr Challen told the Committee that it was not ‘real life’ to consider that another operator may have been chosen. Given that almost all the fixed capital costs are borne by individual hotels, and Federal’s small investment in developing the IT network had already been returned many times over, the unanswered question continues to be ‘why?’ Mr. Lennon should indeed take inspiration from Victoria. The Victorian Premier has announced that there will be research and consultation to determine the socially and economically number of poker machines well before the current deal with Tab Corps and Tattersals expires. The right to operate these machines will then be put out to tender, and analysts expect a ten-year deal to fetch about three billion dollars. What a sorry contrast with Tasmania where every year something between ten and twenty million dollars of public money is effectively transferred to Federal Hotels because the government preferred a secret deal with its mates to an open tender process for the monopoly license. This large annual government subsidy is manifestly unfair to both competing hospitality businesses and Tasmanian taxpayers, and should be immediately ended through increasing taxation to reflect the true market value of the licence... Small business and farmers will be able to advise how it’s done. James Boyce is a Tasmanian historian and social policy consultant
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RAPID RESPONSE EMAIL: What do you think? Wednesday, November 17, 2004 |