Racing Industry Puts $1 Billion Funding Deed Proposal on the Table
Tasracing plan seeks 20-year commitment from Government as racing prepares for life beyond the current Deed
Tasmania’s racing industry has put a price on what it believes is required to secure the long-term future of racing in the state, proposing a new 20-year Government funding deed worth more than $1 billion.
Under the industry’s proposed model, Government funding through a renewed Racing Deed would begin at $42.1 million in the 2029/30 financial year and increase annually, reaching more than $61.3 million by 2048/49.
When projected Point of Consumption Tax (POCT) distributions are included, total Government contributions to Tasracing would start at approximately $50.4 million in FY2030 and rise to $73.4 million in FY2049.
Across the full 20 years, the proposal contained in the industry’s funding projections amounts to approximately $1.023 billion through the Funding Deed, plus a projected $202 million in POCT distributions.
That takes the overall proposed Government contribution across the period to approximately $1.225 billion.
The figures provide perhaps the clearest indication yet of what the Tasmanian racing industry believes will be required to provide financial certainty beyond the expiry of the existing funding arrangements.
A critical time for Tasmanian racing
The proposal comes at a particularly significant time for the industry.
The Tasmanian Government has committed to ending greyhound racing by 30 June 2029, meaning the structure of Tasracing — and the funding required to support racing — will look considerably different when a new long-term agreement comes into effect.
The future of the Racing Deed has already been the subject of considerable discussion within Tasracing, Government and Parliament.
Tasracing CEO Andrew Jenkins told a parliamentary committee earlier this year that he expected the industry’s submission for future funding to be in the order of the funding currently received, although work on the final submission was continuing at that time.
The Government has also confirmed that Treasury and the Department of Natural Resources and Environment are examining options for a future racing funding model.
That work includes examining the economic benefits generated by Government investment in racing, Tasracing’s financial model and comparisons with funding arrangements in other Australian racing jurisdictions.
$42.1 million starting point
The industry’s figures propose a base Funding Deed payment of $42.1 million in 2029/30.
That amount would then increase by approximately two per cent each year.
By 2034/35 the annual Deed payment would be approximately $46.5 million, rising beyond $50 million in 2038/39 and reaching $61.3 million in 2048/49.
POCT distributions are projected separately, beginning at approximately $8.32 million in 2029/30 and increasing to approximately $12.11 million in 2048/49.
Combined, the industry’s projected annual Government contribution would therefore grow from $50.4 million to $73.4 million over the life of the proposed agreement.
The sheer length of the proposed agreement is also significant.
Rather than seeking another short-term funding arrangement, the industry is advocating a 20-year commitment, providing certainty for racing through until 2049.
Such certainty would potentially allow Tasracing and the industry to make longer-term decisions surrounding prizemoney, race programming, infrastructure, breeding, participant investment and the future viability of Tasmania’s racing clubs.
What happens to greyhound funding?
One of the major questions surrounding any new agreement will be the impact of the Government’s decision to phase out greyhound racing.
Tasracing currently distributes millions of dollars annually to the greyhound code, but greyhound racing will no longer operate when the proposed new funding arrangement begins in July 2029.
That creates an obvious question for Tasmania’s thoroughbred and harness participants:
Will the money currently supporting three racing codes effectively remain within Tasracing when it becomes a two-code industry?
Tasracing’s Jenkins has previously indicated that the organisation expects to seek funding around existing levels despite the removal of greyhound racing.
That position could prove critical for thoroughbred and harness racing.
Maintaining funding at comparable levels across two codes could potentially provide opportunities to strengthen prizemoney, improve infrastructure and address some of the financial pressures facing owners, trainers, breeders and clubs.
However, that will ultimately depend on what the Government is prepared to accept when negotiations over the new Deed are completed.
Greyhound transition a separate financial issue
Complicating the picture further is the cost of winding down greyhound racing itself.
The Government has allocated an initial $4.843 million over four years towards the greyhound racing transition.
That funding is intended to assist with areas including administration of the transition, participant support and animal welfare.
But evidence before Parliament has indicated that additional Government funding is likely to be required once final compensation and rehoming arrangements are determined.
That makes it important to distinguish between the cost of ending greyhound racing and the money required to fund Tasmania’s continuing thoroughbred and harness industries after 2029.
More than a billion-dollar decision
While a billion-dollar figure inevitably attracts attention, the proposed expenditure needs to be viewed over its full 20-year lifespan.
The industry’s proposal is not for an immediate $1 billion payment.
It seeks an initial $42.1 million Funding Deed contribution in 2029/30, followed by annual increases over two decades.
Nevertheless, the cumulative numbers demonstrate the significance of the negotiations now confronting Tasracing and the State Government.
By 2048/49, the annual contribution under the proposed Deed and POCT arrangements would be approaching $75 million a year.
For Tasmania’s racing participants, the outcome could shape the industry for a generation.
The current funding arrangements helped provide long-term certainty following the sale of the TOTE.
Now, with greyhound racing preparing to disappear from the Tasmanian landscape and thoroughbred and harness racing facing their own challenges, the industry is effectively asking the Government to make another long-term commitment.
The industry’s position is becoming clearer.
It believes 20 years of funding certainty — and more than $1 billion through a new Racing Deed — is required to underpin the next chapter of Tasmanian racing.
The major question now is whether the Tasmanian Government agrees.
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