Productivity Commission Report on Australia’€™s Gambling Industry

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Productivity Commission Draft Report on Australia’€™s Gambling Industries
July 19, 1999
The New Tax System Advisory Board
July 21, 1999
Productivity Commission Draft Report on Australia’€™s Gambling Industries
July 19, 1999
The New Tax System Advisory Board
July 21, 1999

Productivity Commission Report on Australia’€™s Gambling Industry

Transcript No. 99/53





Tuesday, 20 July 1999

Interview with Alexandra Kirk AM

8.10 am


SUBJECTS: Productivity Commission Report on Australia’s Gambling



Responding to the interim report by the Productivity Commission into the $80 billion

gambling industry, Mr Costello said the Commission had mounted persuasive arguments for

greater protection. Mr Costello said that the GST would offer the States a growth tax to

substitute for their reliance on gambling revenues. The Industry Commission report found

that there are 330,000 chronic gamblers, mainly in New South Wales and Victoria, with 21

per cent of the world’s gambling machines to be found here in Australia. Alexandra

Kirk asked Mr Costello for his response to the report’s findings.



What the report says is that, it doesn’t say you should be banning gaming or

gambling, it says that there are particular areas where there are very heavy social costs,

particularly in relation to gaming machines. And it finds that there is quite a

substantial number of Australians who have a, what he calls, a problem with gambling.



Do you think there needs to be a cap then on gaming machines?



There are other interesting comments, I think. It talks about consumer information,

whether or not these machines should have to actually disclose to consumers the upsides,

the downsides, the chances of winning. Some of the consumer information that we put in

relation to other products in the community, such as tobacco and alcohol, much tougher in

drawing to the attention of the consumer some of the problems in relation to gambling. And

it actually has some very, very interesting ideas, I think, in relation to consumer

protection and information. They should be studied very carefully.



And do you think there is a case for that?



Well, I think that the Commission makes pretty persuasive argument.



And considering that the report has found that Australia has 20 per cent of the

world’s gaming machines, do you think there is a case there for putting a cap on that




Well, it’s an incredible statistic, isn’t it? And I think the argument that

is put in the report is that to some degree the market is increased by supply, this is one

of the markets where you increase supply, you’ll increase use of gaming machines. And

as I say, not coming to any final decisions on this, but it’s something that all

interested parties ought to address and have a careful think about.



And are you willing to take on the gambling industry, and in your own home State of

Victoria, Premier Jeff Kennett, who said when you commissioned your inquiry that it would

be like reinventing the wheel?



Well, I think it was the criticism that was made when the inquiry was set up was, that

this was some kind of attempt to get more taxes. As you can see from the report that was

not the intention in any respect whatsoever, in fact, it was rather to look at the effect

of the taxes. Now, one of the arguments in the past has been that gambling is a growth tax

for State Governments. With the passage of goods and services tax last month, the States

now have access to a growth tax. And all of this has changed for State Governments and

their instrumentalities. But we said, when the Productivity Commission was commissioned to

do the report this was not part of a tax agenda at all. And as you can see from the report

it wasn’t, it isn’t. This is a response to a legitimate inquiry into a big

industry in Australia. And the Productivity Commission can look at all industries in

Australia, and particularly in relation to some of the social aspects of that particular




But isn’t the whole thing out of control? The States, even perhaps if they wanted

to, couldn’t reduce their dependence on gambling as a source of revenue?



Well, the point I’m making is, in the past, you see, States have not had growth

revenues. But, everything has changed with the tax landscape in Australia with goods and

services tax, States now do have growth revenues. And so that argument is passed,

that’s behind us now and we ought to look at tax policy in a whole new light.



So you’d like to see the States wean themselves off gambling revenue?



Well look, as I’ve said, this is a draft report. Everybody should put in their

views and I think all levels of Government will have to seriously consider the final

report when it comes out.