by Brian de Lore
Published 2nd May 2020
Last week we highlighted protest letters and OIA (Official Information Act) requests to the Minister of Racing and RITA (Racing Industry Transition Authority) from the Trainers’ Association, the Owners’ Federation and the Next Generation of NZ Thoroughbred Racing.
The letter not mentioned but also written around the same time on April 22nd, was sent to Minister Peters on behalf of the New Zealand Thoroughbred Breeders’ Association (NZTBA) and signed by its CEO Justine Sclater. The letter was not a long one but very much to the point and hopefully will have struck a raw nerve with the Minister.
It expressed concern about future funding from RITA, how little information was coming back to the codes and how this uncertainty would prevent owners from bringing their horses back into work for a resumption of racing. It also dragged up the Winston Peters quote from the launch of the Messara Report in referring to the administration as a ‘dead horse’ – a euphemism that no one in this game will let the Minister forget.
The livelihood and businesses of our 1400 members and their employees is at stake here and RITA have given us nothing to reassure us that we will in fact have an industry post-COVID-19 – NZTBA
The Breeders’ letter also said: “The livelihood and businesses of our 1400 members and their employees is at stake here and RITA have given us nothing to reassure us that we will in fact have an industry post-COVID-19. Owners will not return their horses to work in local stables without some indication of what they are racing for, and many will in fact send their horses off-shore.
“Our association had grave concerns around the solvency of RITA prior to COVID-19 but were optimistic that your new Racing Act would solve that problem. We appreciate that the Minister has other portfolios to maintain, but we know how much you have invested in the Racing Industry in New Zealand recognising the old Racing Board was a “dead horse”, and presenting us with the Messara Review as a way forward.
“We find this situation with RITA unacceptable,” the letter continued, “and seek your help in making RITA accountable to our industry stakeholders. This is a view shared by our fellow stakeholders the New Zealand Trainers Association and the New Zealand Thoroughbred Racehorse Owners Federation.”
If we were to summarise what the Breeders’ letter says and add the thrust of the intent of the other three letters from last week, the strong message to the Minister is simply, “we have all had enough – fix the problem or the racing and breeding industry in New Zealand will be annihilated under your watch.”
Above, I tongue-in-cheek made the suggestion the letter might strike a raw nerve with the Minister. The question is, are there any raw nerves to strike? – it’s very doubtful! Wiley old politicians have their raw nerves removed very early in their careers and forever-after, it’s water off a duck’s back. With all due respect to the serious nature and good intentions of the Breeders’ letter and the three aforementioned letters from the other groups, history would suggest they are likely to receive scant consideration upon reaching their final destination.
…in the one to two decades of the stealthful hijacking of the racing industry by Government appointees or their ex-civil servants/managers…
History, indeed, tells us that in the one to two decades of the stealthful hijacking of the racing industry by Government appointees or their ex-civil servants/managers ( the ones who required shifting sideways because once you’re a civil servant you don’t get sacked) the codes and racing’s sector groups have had virtually no say in the selection of the NZRB board (now RITA) and the senior executives of RITA.
And while on the subject of civil servants getting the sideways shift, readers will be delighted to learn that our esteemed former NZRB CEO John Allen has been appointed chief executive of WellingtonNZ. The Wellington Mayor said, “He’s a big-picture, creative thinker which are exactly the skills Wellington needs at this time.” Another councillor said, “John’s track record speaks for itself,” which is a sentiment upon which most racing people would agree.
I digress, however. But still in Wellington, the Government should be continually reminded that racing is an industry that employs something like 15,000 people full time, another 13,000 part-time, and between all employees and volunteers, the number involved is more than 57,000. That was according to the last Racing Size and Scope Report that was released exactly two years ago (May 2018).
When you add up what Treasury rakes in from racing’s betting levy, PAYE on employees, and GST, the figure amounts between $80 and $100 million annually. As a consequence, shouldn’t Government have treated us better? Minister Peters did racing the favour of clawing back a third of the betting levy in this financial year ($4 million), and eventually (three years), we get it all back. But, two questions arise on the betting levy rebate.
The first is this: When you owe the bank $45 million, it’s hard to make a case to say racing’s participants should be giving the Minister a round of applause, especially considering the debt has doubled under his Ministerially appointed RITA and his watch as Minister. A third of the betting levy is only a drop in the ocean of debt.
…why would the Minister not go back to Treasury and make a COVID-19 hardship argument for racing to get the full $13 million this financial year…
Secondly, why would the Minister not go back to Treasury and make a COVID-19 hardship argument for racing to get the full $13 million this financial year instead of waiting for the incremental claw-back over three years? Wouldn’t that be a better option than the Minister promoting to Treasury that racing be granted an Air NZ-like bail-out loan that would forever see racing under Government control?
The $15,000 a race with stakes money back to 14th place announced this week by NZTR is for a limited number of race meetings in July only and offers no guarantees for the stakes level to be set for the new season from August 1st. It won’t continue at that level but is an incentive to get owners to put their horses back into work. But remember, RITA is insolvent, and with a miserable end of July result looming, racing for half that amount is a possibility for August.
Ideally, RITA could be replaced by a racing commissioner who would restructure the TAB and immediately commence an outsourcing/partnering agreement funded by the recently announced Grant Robertson two year interest-free loan facility.
The 2019 Budget granted racing a $3.5 million for efficiencies, which apparently was available for leadership redundancies but isn’t yet utilised and will be available only until June. Is it held over by RITA to affect layoffs at the TAB which by all accounts became known to employees at a meeting on April 20th? Why RITA didn’t see the necessity for such an action last July or didn’t immediately use the COVID-19 crises when they applied for the Wages subsidy six weeks ago is a mystery – delaying the inevitable.
Politicians are renowned for not keeping promises, but how could the industry have been so blatantly deceived?
With an ever-increasing regularity, The Optimist has since the last election tried to be a constant prodder to the conscience of our Racing Minister Winston Peters – to no avail. Politicians are renowned for not keeping promises, but how could the industry have been so blatantly deceived? Racing fell into the trap of voting for NZ-First after they released a racing manifesto full of the reform the industry so badly needed.
Implementation of the racing policy hasn’t occurred. Subsequent promises made through documents such as the Messara Report, the Minister’s speech at the Messara Report Launch at Claudelands, the Terms of Reference for MAC, the MAC Interim Report, The MAC Final Report and the Ministerial Letter of Expectation, so far has not been acted upon.
Taking a helicopter view of all that carry-on leads you to the only possible conclusion– the slow and methodical and stealthful hijacking of the racing industry from its true and rightful owners – the codes, clubs and racing participants – is no less a crime than the Great Train Robbery or the French Bank Vault Tunnellers.
Today, racing codes and stakeholders appointed by racing people have zero say, and in 175-years of racing in New Zealand, the industry is in its worse financial state and affectively bankrupt both morally and financially.
…raising of the flag of revolutionary reform…
The small window of opportunity in this cascading graph of racing’s decline was the release of the Messara Report almost two years ago. We all thought, for a second or two, the Minister’s excitement on the day of its release was a raising of the flag of revolutionary reform and everything from that point forward would be a positive for our ailing industry.
The appointed RITA failed to carry out the Minister’s Terms of Reference, and so why has the Minister not held RITA to account as provided for in the conditions of his Letter of Expectation? The course upon which this ship was plotted has neither changed nor has it given racing’s stakeholders cause to believe that what should be a simple fix based upon sound business principles is ever going to happen.
If you doubt that claim above, here are some quotes from the Minister speech at Claudelands on 30th August 2018:
“As Racing Minister, I commissioned this report because for far too long this once great industry has been sitting on its hands.”
“It is being killed by inertia.
“Mr John Messara’s report confirms our worse fears.
“Not only is the industry in a state of serious malaise but it has reached, in his view, a tipping point.
“That means we are staring at a downward spiral from which we may never recover.
“The vital signs of our industry are dreadful.
“In other words, it is an industry in a self-perpetuating decline which is nothing short of terminal.”
“By comparison to New South Wales the returns to New Zealand owners are low:
2016/17 Return to NZ owners 22.9%
2017/18 Return to NSW owners 48/1%
“In reality the numbers are against us. Add it all up and the NSW owner’s returns are double that of a NZ owner.
“Messara was given, in effect, a blank sheet with this review.
“He has been allowed to develop his own thinking on what the New Zealand racing industry needs.
“He has had the chance to talk to a lot of people about what this industry needs.
“This is what an independent review does. It wasn’t an exercise of ghost writing for a Ministerial office wish list.
“What you have in the following recommendations is a clear view on what needs to be done.
“In summary the recommendations:
- Current governance structure needs to change
- Outsourcing TAB commercial activities to an international operator to help increase prizemoney
- Amend the distribution formula to the codes on a more equitable basis
- Repeal the betting levy paid by NZRB to the Government
- Construct three synthetic all-weather tracks
- Increase thoroughbred prizemoney, potentially doubling to about $100 million per year
- Reduce the number of thoroughbred race tracks
“This choice is yours. This choice is whether, as an industry, you accept that you are at a crossroads.
“Do you accept the status quo which evidentially offers a continual, gradual decline? Or do you accept a need to adopt change, and are willing to approach that change in a constructive way?
“The government’s next steps: When receiving the report, one of my staff members advised me the racing industry was going to “freak out” from this report.
“The reason being is that the Messara report pulls no punches and offers a very prescriptive plan on governance, licensing, and particularly on consolidating race tracks.
“It is a matter of public record that many aspects raised in this report are matters which, as Racing Minister, I’ve expressed concerns about before. In particular, governance structure and incentivising ownership investment.
“If you think I’m a harbinger of doom of gloom, read the Racing Board’s annual report out this year.
“Here’s a fact. Some of your code distributions and activities are being funded from cash reserves and borrowing.
“Does that sound promising? Or is that ominous? But to be honest you all know that alarm bells have been ringing for industry for years now.
“Here is a fact. This year a three-year revolving debt facility was established to supplement the NZRB balance sheet.
“And total equity is budgeted to decline by $15.6 million this year.
“Some will argue that the Racing Board is turning the industry around.
“But my bet is, like me, this hall is packed with people seriously concerned with the status quo.
“Mr Messara has today offered a blueprint, especially on race-course consolidation. It’s going to focus the attention of many of you.
“And the Government will take a look at it. We accept the need to make a real effort to restore the industry.
“Change is challenging and difficult, but real reform is also the pathway to the restoration of this once great industry.
“These are John Messara’s 17 recommendations. The main ones of which we’ve covered in tonight’s presentation.
“Ladies and gentlemen, as John Messara said in his introductory video, we have a chance to turn racing’s ominous present and future around.
“We all know that so much of the legislation governing your industry was written not for the industry’s benefit, but for the convenience of politicians and bureaucrats. And all of us are to blame for allowing that to happen.
“Tonight we have set before your industry a liferaft of reforms. It is over to all of you now – sink or survive and flourish.
“It is to be hoped that the industry seizes this chance as comprehensively as possible.It’s a now or never moment.
“In the words of the genius of human motivation Shakespeare – “there comes a tide in the affairs of men which is taken at the flood, leads on to fortune”.
We as owners all have the option of investing in Australia, and that’s what I’ll be doing in future.
What a very sad and TOTALLY UNNECESSARY state of affairs.
One of the greatest insults and painful thing to have said to one is:
I AM VERY DISAPPOINTED IN YOU.
I am afraid Deputy Prime Minister , I am.
Well said Henrietta ….and well said Brian.
The only difference between the great train robbery and the hijacking of the TAB was this ….
Ronnie Biggs needed a face lift to avoid detection ….and eventually still got caught…….but Winston’s face could never be lifted …………that reassuring smile will NEVER go away as fraudsters need to retain a smile on the dial.
As a commercial participant in both the Thoroughbred and Harness Racing industries for over 65 years, in both New Zealand and Australia, as an owner, trainer and breeder, I along with many others fear for the future of our industries.
I am afraid that there will not be any help from the present minister or his cronies forthcoming before a runup to the next elections.
Peters will then blame Covid-19 for not doing anything and will again make all the noise he thinks will gain the support of racing industry participants. It will not happen.
Regardless of the government in power what we need more than anything else is governance by people who not only understand the industry but also wish to make it prosper.
Forget about the public servants who’s only ambition is to stay in the job (or jobs) long enough to gain their golden egg pension.
Messara got it right. If Peters, who lauded the report, can’t show he’s capable of exercising his duty as minister….Lets have someone who can.
They have screwed the little owner and the little punter for years!!!
I think the biggest thing that they have forgotten is that there is a limited amount of gambling money available in New Zealand.
Turning Racing into something similar to a pokie machine was always going to fail.
Racing is no longer an attractive option for the gambling dollar, it has sadly lost its heart.
I do not agree that racetracks need to close, the smaller clubs put on a much better atmosphere and provide a better day out than most big clubs. I would rather go to the Taupo races than Ellerslie
Whilst many of us accept change is adamant, there are still people out there that dont want their clubs affected, they have no choice, because they are part of the problem it costs money to hold meetings in small areas….its like taking super rugby to the islands its great fun and a good experience but it costs more money than it makes. The Messara report can work we just need the right people to make it work… It is very frustrating to see that it has been nearly 2 years since the report and nothing has come to fruition.
It’s good you have kept a record of Winston’s statements so he can be held to those words. I’d have to say it’s remarkable how far your position has moved on the Minister, having once hailed him as the saviour.
But I think we have to face the fact that outside a rescue package of sorts in the Budget, COVID-19 related – and more focused on retaining jobs, there is little will in this Government to do any more than keep the sector alive, maybe move a few deck chairs.
And that means not giving us back the necessary control over income and distributions to effect the changes that are required. We have been pushed back into a completely passive, take-it or leave-it position. Hard to reconcile that against the strength of the Racing Conference when I was first reporting on these matters over 30 years ago.
The problem then was the Clubs/venues exerted too much control. In addressing this and the consolidating the codes at the same time that we ended up the RIB, which is when things really started to unravel. Now we’ve got to a position where the Minister and DIA have assumed an unhealthy amount of control over a sector in complete disarray.
The horse has effectively bolted. And now we’re dependent on the whims of a Minister, who has already shown signs of losing interest/patience; which seems to be coinciding with his waning influence over this Govt.
In fact I think we need to think of life after Winston, and whether the next Govt. will even have a Minister. Then we will be in serious trouble. The sector will be under the control of some bureaucrats in DIA….
I have a home-bred returning to work in a Cambridge stable next week, and another about to go to the breakers – possibly the best if bred over the past 20 years.
I only wish they were coming to the fore with racing even half as strong as it was back in the the 1980s. But there’s no rewinding and in some ways COVID-19 is fast-forwarding us into an unknown future – that we have far too little control of.
Alan Groves
I backed Winston at the election in the misguided belief he would keep his word, and got it very wrong. The only consolation I have about that is: where were the options for racing? I don’t mind admitting I got that wrong and my position has changed on Winston from one extreme to the other. But, to avoid bigotry and prejudices you have to keep an open mind, be willing to process information in an unbiased fashion, and write it as you see it without regard to personalities. If that stops happening I’ll give up writing about it.
In my last three conversations I’ve had with Winston, each time I’ve put the phone down and said to myself, “this guy doesn’t have a clue what’s going on!” But he put himself in charge and the buck stops with him. His defence on that is to blame racing people.
ROME HAS ALMOST BURNED This was to be our chance to save this great sport and industry so many of us love passionately.
What an offront to a gentleman like John Messara is RITA’s inertia on progress .
In a crisis such as this desperate measures are vital.
Salaries and costs in administration should be slashed and Brian de Lores suggestion of a commissioner appointed from racing looks a great start .
Winston you have had your opportunity —it seems you have failed or will you do something to rescue the 57000 volunteers and workers you said you would help?
Congratulations to Brian de Lore
John Frizzell
Well Stakeholders ,you continue to lye in the same bed, and my sympathy for you all is zero.
To be able to think so narrow minded, in that NZTR/ RITA is your sole option.
You/We must be the weakest breed of all the world.
The soft ease going kiwi who makes little noises ,grins and she will be right.
I,m laughing at you, as you wait for something to happen from a regime that has and will continue to milk your last drop of blood,sweat and tears, as you wait for WHAT?
There will be no winston, there will be no minister after september.
Why? who needs a minister for an insolvent industry.
CUT THE CORD, start a complete new ENTITY.
We have privately owned racecourses, thats a good start.
We are free to conduct Hunts , Point to Point and Beach race meetings.
We could strike now (ops we could with hold product), but why waste more time.
Lets pick a venue, pick a date , run our horses, and while we are together discuss our future race dates, get some sponsors, arrange Betfair to run a book.
Ohhh thats rights we kiwis.
Any news on a NZ Bloodstock taking over ?
Rocket Science.
Thanks for your comments Graham, its said life is a joke, not funny when we are the joke.
As Ive written before, anyone interest in starting up a new Entity.
My number 027 6233020.
Steve Herlihy
Steve …..as Iv’e said before I love your passion but unfortunately your pleas are falling on deaf ears ….why? …
Well for a start running a beach meeting with Bet Fair running a book would be impossible as legislation would prevent it.
If you look at the hold on our racing Bet Fair usually holds a mere 2k and sometimes a lot less and probably 0.222% of Kiwi punters have a Bet Fair account anyway as it hasn’t taken hold in NZ unfortunately.
So I don’t think WE are the joke Steve ….I think we are mere pawns on a chess board getting shuffled about with our hands tied behind our backs.
As I have previously stated the best man for any kind of redemption at the TAB is Michael Dore …..he would find a way I am sure of that with or without Winston……but even he would probably admit that it might take 2 or 3 years to resurrect (maybe more) with the diabolical situation that has been allowed to happen……..sad but true Steve.
What a get day has dawned.
With the inevitable news that the TAB has raised the white flag and have surrendered our huge salary burden and realized they took
so much from the product owners, they could not return the crumbs that fell from their table to offer any reasonable stakes from the hand that fed them.
Why does our industry administrators take 6 weeks to do what other companies have done in the first 2 weeks during COVID ?, DOWNSIZE.
Also, CEOs, top sportspeople accepted the fact, for the good of all and their profession, took pay cuts.
Including our Chief CEO Jacinda.
So Mr McKenzie, why as our trust leader have you not followed suit as an honourable man?
Have you been treating your RITA position as part-time/limited employment?
Because unless you can tell otherwise, it’s totally obvious to me,
your lack of decision making in the Masara report proves it.
I am publicly requesting your immediate RESIGNATION,
and the return of your $600,000 to $700,000 salary.
The type of person that we will seek to replace you, is someone with the LOWEST bid.
Why? , because the recipient would be passionate, and if you were, you would have dropped your salary.
Mr Mc Kenizie, also mentioned on Track talk that, quote, “önly two people were running the TAB at the moment”.
That was about 2 pay packets ago x 230 TAB personal.
Does any else wonder why we are now broke?
Steve Herlihy
First, a point of order, Mr Chairman.
Winston Peters is not the Minister of Racing, he is the Minister for Racing. And anyone who thinks the distinction doesn’t matter needs to bone up on their political science studies.
Following on from that, if the sport had been administered in anything like a businesslike manner over the past century, it would have no need, none at all, for a Minister, either of Racing or for Racing.
The idea that racing’s problems have all arisen recently is a nonsense; they’ve been building since not long after British soldiers raced their mounts along the Petone foreshore before heading off to face Te Rauparaha or whoever else was bothering their masters.
I could list a dozen things that need fixing but let’s just concentrate on one — the number of race courses in New Zealand.
Here’s a way to boil it down: New Zealand (population 4.8mil) has 52 racetracks for thoroughbreds; New York state (population 19.4mil) has four.
OK, NZ is a different shape to NY and at 268,000 sq km covers an area twice as large as NY’s 140,000 sq km.
But, fair dinkum? Fifty-two racetracks for 4.8 million people? It’s insane.
Northland (pop 180,000) has two. One is OK, the other a joke. Yet when there was a move to shut Dargaville down ten or so years ago, Graeme Rogerson led the charge to keep the joint open. And every subsequent attempt has been met by a cavalcade of bleeding hearts, appealing to community this, community that, and community every other thing.
If an industry leader like Rogerson can’t see what the problem is, in fact advocates for the stupid side, then is it any wonder that the game is stuffed. Of course, when someone of the status of Rogerson attends Dargaville races, they’re not expected to slum it with the peasants so maybe their perception of the place is somewhat slanted.
I’ve resided for the past 25 years in the Kaipara District, for which Dargaville is the administrative centre. I’ve been to the races there once and won’t be going back. Why? Because on my only visit I copped an arseful of splinters from a weatherbeaten seat and when I sought a beer I was directed to the tractor shed, where I was handed a can, warm. At least they’d taken the tractor out, so that’s something they got right.
Up until the 1950s, it was easier for racing to be taken to the people. But since the 1960s, at the latest, and more so in these times of modern motor vehicles and reasonably good roads, it is just as easy for the people to get to the races. The need for every town, village and hamlet to have its own race course disappeared so long ago that the only people who remember the case are sitting in rest homes wondering whether Covid-19 or the Queen’s telegram will arrive first — if they can wonder at all.
Skewing all this was the move in the 1990s to televise racing and, in one of racing’s most egregious decisions, to make it free to view. In one fell swoop, the on-course crowds were removed; ten years later, the internet killed the TAB’s retail arm.
So now, with pretty much every punter sitting at home with his own private betting terminal, what is the point of having fifty-plus venues?
New Zealand could probably get away with four but, let’s be generous, and have say eight in the North Island and six in the South.
If racing’s movers and shakers can get their heads around that set-up they would be making the first move toward running the sport for the good of all participants.