SA’s racing industry at risk

Mr Sam Hayes, Managing Director of Cornerstone Stud.

The Barossa could lose some big names in the racing industry unless changes happen to the tax handicap claims prominent racing identity, Mr Sam Hayes of Angaston.

The racing industry recently put a proposal into the State Government to try make South Australian racing competitive again.

It revolves around the point of consumption gambling tax, where South Australia has the highest rate of 15 percent.

The main competition for the state is New South Wales with their tax rate of 10 percent, and Victoria with a tax rate of eight percent.

Sam, the Managing Director of Angaston’s Cornerstone Stud, explained that really what they want is for the tax rate to go down to 10 percent, to be in line with our neighbouring states.

He said that because South Australia has the highest tax rate, corporate bookkeepers are encouraging their clients to bet elsewhere.

“So what that’s actually doing is costing our industry quite a lot of money and it is falling further behind the others,” said Sam.

“In January/February this year the income for the industry was $800,000 less than two years ago before the tax came in.”

Sam added that with the increased betting turnover at the proposed lower tax rate, the net income to the Government would be the same over the next five years.

He then explained that in each other state, part of the proceeds of the tax are being re-invested back into the industry, just not in South Australia.
The income is leaking out of the industry upwards of $8 million a year.

The prize money also isn’t growing quickly which is putting a lot of pressure on jobs and investment in the state.

At the moment prize money on Wednesday is about $15,000.

In Victoria they are racing for $40,000 to $50,000 midweek, and $125,000 on Saturday.

What the South Australian industry are finding is that they have lost some interstate trainers that used to come to race here.

“We are seeing four or five horse races in Adelaide on Saturday which is a sign that the domestic horse population is decreasing and trainers are no longer bringing horses over for races,” said Sam.

“They could race for $35,000 here on a Saturday, or race in their own backyard for that money on a Wednesday. Prize money is really the wages of the industry.”

Sam explained that the difference in prize money is getting to the point where it’s now become uneconomical to attract people to race in South Australia from interstate.

It’s also becoming uneconomical to race horses here when you can just go across the border to win triple the money.

He believes that there’s a lot of trainers and people in the industry who are weighing up their options on where to be based.

Cornerstone Stud has been running for 50 years, and Sam being a third generation, would hate to consider the move interstate.

“It’s real and I think the people that are here are here because they are passionate about South Australia and connected to the communities and regional areas they are from,” said Sam.

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