Huge changes have been proposed for the New Zealand racing industry. Photo: Race Images South An independent committee has recommended sweeping changes to safeguard the future of the New Zealand racing industry. The Sir Peter Vela-led committee has called on both major racing codes and the TAB to act on its recommendations ‘‘at pace’’ to protect a $1.72 billion industry that supports more than 12,500 jobs. It follows a revelation in The New Zealand Herald that New Zealand Thoroughbred Racing and Harness Racing New Zealand were seeking up to $25 million from TAB reserves to help balance their books. The committee said the New Zealand racing industry ‘‘faces a significant and worsening structural deficit that funding alone cannot resolve, and that demands structural reform before the position deteriorates further.’’ It said the industry carried a structural deficit of over $50 million a year, and both codes were on track to exhaust their reserves within two years. As expected, two of the key recommendations in the report relate to governance and assets. The committee calls for thoroughbred and harness racing organisations to unite as one entity. Each code could still retain its ‘‘identity and code-specific expertise’’ but the time had come to have a joint approach when it came to strategy, funding, the racing calendar and marketing. Industry administration costs were about $91 million a year — equivalent to 58% of stakes and bonuses — and a code merger could free up $20 million to be redirected. The more controversial, if hardly unexpected, recommendation relates to assets. The committee argues for a ‘‘centralised property vehicle to rationalise venues, unlock capital, and direct investment to priority infrastructure’’, and claims that would create over $700 million of capital. The devil will be in the detail but the reality is that would mean clouds hovering over the futures of several racing clubs and venues in New Zealand. Under the committee’s proposal, tracks would be vested in a single entity, managed by a professional board. Individual clubs could exchange their land ownership for ‘‘equity units’’, meaning they would retain a financial stake but no longer control the assets directly. Under-utilised or surplus land could be repurposed or sold — a recommendation that will doubtless have direct ramifications for some smaller clubs that may cease to exist. Interestingly, the report says clubs could choose not to transfer their assets, but any decision to operate independently would mean being blocked off from industry-sourced infrastructure funding or major capital projects. ‘‘Over time, this creates a strong but voluntary incentive to join,’’ the committee said in the report. ‘‘Industry capital is channelled only into assets that sit within the unified, professionally governed network, ensuring that scarce funding is not spent propping up non-participating or low-priority venues.’’ Other recommendations relate to tax and regulatory change in a bid to stimulate the domestic breeding industry, the transfer of Racing Integrity Board funding to the Crown, and modernisation of the TAB. The committee recommends the immediate establishment of a governance group containing representatives of both codes, the TAB and the committee to push ahead with the reform. ‘‘The time to act is now,’’ Vela said. hayden.meikle@odt.co.nz
