by Brian de Lore
Published 21 June 2019
A racing milestone took place with Thursday’s third and final reading of the Racing Reform Bill No.1 meaning the racing industry will come under new management and legislation from Monday, July 1st.
Stage One complete, but all the planning and hard work by Minister Winston Peters and his NZ-First office headed by Jon Johansson, the Ministerial Advisory Committee (MAC) and DIA, will pale into insignificance compared what needs to happen over the next year or more to turn around the fortunes of this ailing industry.
By next Friday MAC is due to deliver it’s second and final report to the Minister which under the Terms of Reference is to outline the plan for structural changes and the transition to the new legislation to be implemented by RITA (Racing Industry Transitional Authority). The MAC has been busy writing that blueprint and schedule for the workload which they will undertake for themselves under its new auspices of RITA.
The final MAC report is likely to be even more comprehensive than the 123-page Interim Report which was completed and delivered by the end of March. The requirements for this one are:
- final advice on any operational or other matters that the Government should consider in its response to the Report; and
- a draft transition plan for the racing sector, identifying key steps, processes, and timings.
In a press release dated June 21st (today), the Minister announced: “RITA will be led by Dean McKenzie (Chair), Bill Birnie, Liz Dawson, Kristy McDonald, Anna Stove, and Sir Peter Vela.
“With transitional powers, RITA will enable the urgent changes required to drive the racing industry toward a financially sustainable future,” says Mr. Peters.
“To provide continuity and maintain the momentum for change, the Chair and members of the Ministerial Advisory Committee (MAC), established by the Minister in 2018, have been appointed to the board of RITA.
“Mr. McKenzie’s experience, dedication and passion to improving the industry make him the ideal choice to lead this very important work,” says Mr. Peters.
“Members of the MAC – Bill Birnie, Liz Dawson, Kristy McDonald and Sir Peter Vela will continue to support Mr. McKenzie in revitalising the racing industry.
“Mr. Peters expects that Ms Stove will bring a fresh perspective to RITA, along with her extensive experience in leading and driving transformational change.”
Anna Stove has strong leadership skills and is presently Vice Chair of the Counties Racing Club and was due to step up to Chair in October. Her extensive global executive experience includes being Chair of Global Woman New Zealand Trustee, Director of Hikurangi Cannabis Company (Medical Research), formerly a Director of Medicines New Zealand, and for seven years the Vice Chair and Director of Shooting Star Hospice in London
Anna is the ideal appointment – she is the daughter of the well-known breeder, studmaster and owner of Progressive Farms, Brian Mollet. She grew up riding, has been around thoroughbreds and for many years has been actively involved in breeding and ownership.
Anna is the sixth member of RITA, and a seventh may be appointed at a later date when a person with another specific skill set has been found – possibly a wagering one.
We know that the NZRB board will be defunct by Monday week. RITA takes over the ship’s wheel on July 1st, but no one knows but themselves and the Minister what the first moves will be except they will focus on revenue growth, support a Change Management Program and set leadership and governance arrangements.
Those points were clearly outlined in the Interim Report as well as stating: “Change will happen quickly, and disruption must be carefully managed and minimised.”
If that is to happen, then it seems logical that McKenzie would take up the position of Executive-Chairman to expedite all the changes and rein in the costs while maximising the revenue streams – that would simply not happen under the current management which has no genuine record of cost-containment or sensible business practice.
Dean McKenzie’s RITA’s challenges include 1. A failed leadership team 2. CEO still in denial 3. Disillusioned and demotivated staff. 4. Unpopular fixed odds betting platform. 5. Significant loss of customers. 6. Insufficient income to fund stakes at current levels. 7. No further borrowing capacity. 8. Over resourced and too expensive. 9. Racing product in serious decline. 10. Substandard racing surfaces and dilapidated infrastructure.
Everyone bleats on about BAU (Business As Usual), and disruption must be minimised – but for what? BAU for the NZRB is currently advertising 14 employment positions and the recent appointment of a General Manager of Technology who will reputedly earn $350,000 to $400,000 a year, and who is due to relocate from Australia to take up the position at the end of July.
The GM of Technology will no doubt be a replacement for Dianna Taylor who played a substantive role in the Fixed Odds Betting (FOB) saga but resigned two weeks after it’s launch. Taylor was also a major player in the Kiwi Bank computer system build which went on the scrapheap after six months at a loss of $90 to $100 million.
With RITA coming on July 1st and the executive, overpaid management team knowing it, would not any reasonable organisation have put staff appointments on hold rather than exacerbate the problems to be confronted by RITA.
BAU should really be BSAU. And minimised disruption shouldn’t enter into the calculation because to get the job done quickly and efficiently, disruption is inevitable. Do you think V’Landys and Messara were worried about disruption when they planned their Coup d’état on Racing NSW and turned the industry around with the blessing of the NSW government? Doubt it.
To get the job done will require steely-strong leadership of the kind that’s been lacking in racing in New Zealand for so long. The challenges are mounting up which is in evidence with the reaction of several sporting entities that have voiced dissatisfaction with the Racing Reform Bill No.1 after the third reading.
It’s developed into the needy and the greedy. The racing industry is The Needy and will die without both parts of the legislation, and the sports organisations which have their hands out for more money are The Greedy.
The second part of the legislation scheduled to be introduced by December to be passed into legislation by January 1st will be a more challenging assignment by the admission of sources within the NZ-First office. It involves changes to the structure of the entities, establish TAB NZ, and put into place any revenue structures not covered in Bill No.1.
Bill No.1 was passed into law with full Coalition support including the Greens. That support will also be required in December, but some of the betting issues may prove to be a bone of contention with the establishment of TAB NZ. Add to that what is certain to be a growing whinge from The Greedy, and a hurdle becomes a steeplechase jump.
Sports entities clearly do not grasp that they will all be financially better off with the legislation passed in its entirety than at present. Racefields (Betting Information Use Charge as it was renamed by MAC, just to confuse you further) and the POC (Point of Consumption) levy will provide two new revenue streams for both sports and racing never before accessed – despite it being law in Australia since 2008.
The initiative to collect these taxes and levies came from the racing codes, not NZRB, and would have been unknown to sporting entities. Sport pays nothing for the maintenance of the vehicle (TAB) which collects the revenue for them (currently $10 million annually)
“Ït’s pretty disappointing to have people who would make that comment when we are trying to rapidly grow the pie and ensure that everyone gets more out of it,” said Winston Peters today (Friday 2st June) on NewstalkZB.
“If you have people saying that then I think they should come and have a chat to me about it. It’s disappointing when they show no gratitude while we are trying to fix things up – to take that attitude.”
When questioned on whether or not he could save the racing industry, Peters replied: “If you get the structure right and you get the people right, suddenly it will take off.”
