Tisch Lindsay: Reserve Bank of New Zealand Amendment Bill — Second Reading 
Tisch Lindsay: Reserve Bank of New Zealand Amendment Bill — Second Reading 
[Volume:634;Page:5971] 
LINDSAY TISCH (National—Piako) 
: 
 The Reserve Bank of New Zealand Amendment Bill is important legislation amending the Racing Act of 2003. National supported the introduction of that Act but it was not envisaged at that time that there would be a rounding-down of the currency which will come into effect on 1 November. 
It is important that the racing industry which is a vibrant and growing one has the support of this House. As an owner of a racing horse— 
Hon Clayton Cosgrove 
: Shetland pony. 
LINDSAY TISCH 
: I can assure the member that it is not a pony. It ran third yesterday. So I have a vested interest in making sure the racing industry is able to support the punters the owners and the investment in the industry. The racing industry depends on gaming for its viable operations and it is underpinned of course by that. The significance of the industry is borne out in some figures. 
I will give some background because I think it is important that we see how important the racing industry is. I am not talking just about horses; I am also talking about greyhounds. They are part of the racing industry. The social and economic benefits of the industry are quite significant. In 2004 the study carried out for the racing industry showed that the industry directly contributes about $424 million to GDP. It supports about 9500 full-time jobs and another 18000-odd people are involved in an indirect way so it is a pretty big operation. In the Piako electorate that I represent—the heartland of racing in Matamata Cambridge and those areas—racing is very very important. 
If we were to look at what the Racing Act did in 2003—and as I said National supported that legislation—we would see that it set up a new framework. It disestablished the Racing Industry Board and the Totalisator Agency Board bringing them together under one umbrella the New Zealand Racing Board. The board has the role of making the betting rules for totalisator fixed odds and sports betting. Sports betting is a growing part of the income for the racing industry 
 Of course like all TAB operations around the world the board retains a commission. That is how it operates. That is known as the betting deduction and from each totalising betting pool it distributes the remaining to the winning bettors. If one has a win on a horse then the stake money is paid out. On top of that of course for those bettors who put their money on a win a place bet a trifecta—whatever one likes to do—some money will come back. So the board takes out its deductions and pays the money back into the industry as a whole—the owners and the punters. 
When declaring dividends for totalisator betting the board rounds down the dividend to the nearest multiple of 5c. 
Jacqui Dean 
: Is that right? 
LINDSAY TISCH 
: Yes and this is why legislation is so important. Because under the Racing Act the board must pay the 5c to winning customers. So an example of this would be a totalisator race betting dividend calculated at $3.18 which is declared and paid out as $3.15 and the board would retain that difference between $3.18 and $3.15—that 3c is not paid out. 
The Reserve Bank of New Zealand Amendment Bill is saying in the amendments to Part 2—and this is why it is so important—that we will not have 5c coins shortly. They will be phased out and the racing industry will not be in a position to meet the requirements under the Racing Act because of that change and that is why the Reserve Bank of New Zealand Amendment Bill is so important. The decision has been made to call in those 5c coins. They will cease to be legal tender from 1 November of this year. The board’s decision has implications for the racing board’s ability to facilitate racing and sports betting because of the requirement as I just mentioned to round down to the nearest multiple of 5c and to pay the 5c to winning customers. That requirement will come into effect on 1 November 2006. That will cause some issues and this amendment looks to address them. 
When that 5c is called in how will the board operate and be able to promote racing and sports betting? Well the board has been delegated the responsibility for making betting rules on the rounding of dividends for future-proofing of the Racing Act. This is so the board will be able to change the betting rules in response to any further decisions of the bank to call in other denominations of coins. Thus further legislative amendments will not be required to address the consequences of that. 
The submission that came from the Racing Board—which was a very good submission—was concerned and the Finance and Expenditure Committee took this on board which is good. Here is an example of what will happen. Although I do not know whether every party will support the amendments they will be passed as I understand that most parties will support this measure. The rules on the dividends will change and the dividends will be rounded down to the nearest 10c because we will not have 5c pieces. 
Colin King 
: That makes sense. 
LINDSAY TISCH 
: It will make sense as my colleague Colin King says. Of course harness racing in the area that Colin King represents is a very very important industry especially around the Blenheim area and he understands the importance of this industry. 
It would probably be best if I illustrate some points. 
Hon Member 
: Who will miss out? 
LINDSAY TISCH 
: No one especially not the punter. Here is an illustration of that. At the moment if we look at the bet type and put some money on for a win bet the current deduction is 15.5 percent. Under the proposed deduction with the passing of this amendment the deduction would be 14.5 percent. If we place a bet for a place which is 15.5 percent today under this proposal it will be 14.25 percent. In terms of dollars in the last financial year—2005-06—the amount of money that went through the totalisator was $1.4 billion in round figures. It was paid out at $1.1 billion but under this proposal $1.11 billion will be paid out. So there is an immediate increase to the punter. So this is an advantage. There was some concern of course that rounding down would in fact disadvantage the punter. Those examples show that it will not. 
We have to have some commonality with Australia because it is very easy to bet offshore. We have to have that commonality. We have to have the flexibility and these rules will provide that. What New Zealanders have to do and what this amendment does and why we are supporting it is to have the flexibility to meet the market. National supports this very important legislation. 
Bill read a second time.