Peter Costello

Media Transcripts

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 Industry


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 number?



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 industry.



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.

20 Jul 1999

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