Hudson Brett: Gambling Amendment Bill (No 3) — Second ReadingText is incorporated into the Bound VolumeHudson Brett: Gambling Amendment Bill (No 3) — Second Reading[Sitting date: 04 June 2015. Volume:706;Page:4372. Text is incorporated into the Bound Volume.]BRETT HUDSON (National): I rise in support of the Gambling Amendment Bill (No 3) in its second reading. May I start just by saying that it was an absolute privilege to serve on the Government Administration Committee and to hear submissions on this amendment bill. I would like to take the opportunity right now to acknowledge all of the submitters particularly those who work in the areas of problem gambling and with people affected by issues around gambling. Particularly we heard from a number of individuals who themselves have experienced all of the trauma upset stress and financial misery that does unfortunately afflict some in our community with problems around gambling. They were extraordinarily courageous to share their very private and traumatic stories with the committee. I thank them for showing that courage and I would like to take this opportunity to reiterate—as I think other members have done—that the committee listened very closely to what they had to say and took that into consideration as we worked through the evidence on the bill.As I think has been covered—but I think it is important—we should look at the nature of what class 4 gambling adds to New Zealand. New Zealanders spent around $700 million a year on pokie machines in the year 2013-14 and about $246 million of funds are distributed through non-club societies—to community groups sporting groups and other very very worthy recipients—across our society. This is an entertainment activity that helps to fund many groups and needs. I think it is important within that to look at the statistics of problem gambling because I think that is where the submissions either in opposition to or expressing concern about these changes were raised. So for instance in the data from 2012 supplied by the Department of Internal Affairs 0.7 percent of New Zealanders are listed as having problem-gambling issues with a further 1.8 percent being at moderate risk.So what that is saying to us is that for that number of people there is a very real and deeply affecting issue—one that this Parliament ought to give real consideration to. But as with most things in the legislative process there is a balance and the balance that we also need to bear in mind here is that for 99.3 percent of people gambling in this form of gambling does not represent a clinical or defined problem level of gambling and its associated problems. So we do need to bear that in mind and the committee members did as we worked through the evidence we heard and as we reached the amendments that we recommended which are reflected in the bill as it was recommended back to the House for this reading. I would also note just in finishing on that area that we saw the greatest reductions in problem gambling in the 1990s and the data shows us that that level has remained fairly stable since then. So great work has been done and as I say the vast majority of people gamble responsibly and without issues arising from that.The main purposes of this amendment are to increase transparency of grant making which is very important; to reduce potential conflicts of interest which are of great concern around our communities; to simplify compliance and reduce costs; and particularly there was an issue around the appeals process. I may deal with more than one or two of those but what I really want to spend some time on right now is this area of potential commission-based payment for venue operators. I will acknowledge that certainly most submitters themselves were not either corporate societies or venue operators. Most submitters were submitting in opposition to a move to commission-based payments but although they all expressed concerns about what might happen it is very important that we note that not one submitter—and I will particularly reference Professor Bill Abbott the pro vice-chancellor and dean at the Auckland University of Technology who himself was very open that there is no evidence to suggest that a commission-based payment would result in higher levels of problem gambling or incentivise inappropriate behaviours. I will acknowledge that Professor Abbott was opposed in principle. He did not want to see a commission-based approach but he did acknowledge that there is no evidence in New Zealand or around the world that actually demonstrates that a move to such a system would in fact incentivise improper behaviours or lead to worse outcomes.I would like to have a wee look at what leads the department or this Parliament to even consider the possibility that we might allow through regulatory powers a commission-based system. Quite frankly the venue cost at the moment is a highly complicated set of formulae that is difficult and costly for venues to manage and is difficult and costly for the department as the regulator and overseer to actually also oversee and manage from a compliance perspective. In reality if you are a reasonable or large sized venue it has actually led to a situation where these venue operators are getting what amounts to a capped commission of 16 percent of takings per machine. So we actually have by de facto—or you could argue by design—the nature of the complicated means that we have. There are four different limits that are used in determining what the venue machine costs are today. Three of them are mutually exclusive but the fourth one can operate with any of the other three. What they have found is that option D the final one has actually become that de facto standard—16 percent when you get to a sizable operation.So we are further challenged in determining that by the regulations around the cost inputs. The legislation as it stands demands that the costs are reasonable actual and necessary but how the costs are determined is subject to the decisions of the department as the regulator. The department determines what tasks can be included in the actual real and necessary cost inputs and the amount of time each of those tasks will take and the reasonable value therefore of each of those tasks. In fact a couple of submitters highlighted to us that those talks the durations and more important the employee pay scale for delivering those have not been looked at for years and the pay scale has not been adjusted even to meet inflation. Although inflation might be at 0.1 percent now it has been running in previous years particularly prior to this Government at much higher rates than that. So we have a potential situation that the costs that are being allowed to be claimed at the moment may not actually be truly reflective of the costs to run those machines in the venues.Those submitters also pointed out that they just take into account a tiny tiny portion of an employee which the business still has to fund for the rest of their time of employment. So it can actually create a real challenge for them. The options that were in front of the committee were to retain the status quo which would be bad as it is complicated and unwieldy and to go to a set charge per machine which we also discovered though discussions in committee would mean that some venues would come out winners and some venues would come out losers. We do not I think overall want to see that either.But in the commission there is more than one way to skin the proverbial cat. We could just have an open commission that says that the more that you collect the more you will get ad infinitum. We could have a tiered commission based on whether you have a small number of machines at your venue or a medium or a large number or we could in fact just have a cap that said that you charge a commission but that it goes to a certain level—it could be that 16 percent even—and then stops. As a committee we did determine that perhaps the best way to address this was actually to go through a consultative process through the regulator and therefore that is really what drove the decision the recommendation to do it through regulation rather than through the principal legislation. That is why we have come back proposing that.Just as I close off on this issue of commission-based payment I would just like to make this point because I think it is very important. If it is the venue operator that is getting commission based on the takings it is the behaviour of the operator that is in question not the behaviour of the gambler. It will not affect the gambler at all. Just simply with something like Lotto we see evidence that it does not necessarily—in fact it does not—see a rise in bad behaviour by the operator. This bill has been returned and I think it is very sound and pragmatic and I commend it to the House.The question was put that the amendments recommended by the Government Administration Committee by majority be agreed to.