Garry’s Corner – 25 May
Who gets what? I have had more time to digest, not that it took a lot, the Winston largesse to encourage more breeding. I really think the breeding industry should be at the back end of any consideration, if racing and racing ownership had a positive outlook breeding will, as always meet the requirements. To be fair, depreciation of any asset is only acceptable to the Tax Department after the Government of the day accepts the asset does, in fact, do just that. The belief that investors will spend large amounts of capital to save 28% of tax liabilities would make one wonder how they were smart enough to get in that position in the first place. My advice to the very few that ask it if you invest in the stallion or broodmare because it suits your breeding interests. Horses, unlike machinery, are impossible to value. Fortunately no two see them the same. The value of ten bulldozers is substantiated by the other 100 on the market with the same specifications, not so with horses.
I had a beer with a mate who cheerfully told me the 200k he had been encouraged to invest in a couple of colts had saved him 150k tax. I said, after he had bought his round, you know better than that, your 200k investment has reduced your immediate commitment by 28% of the 150k, yes he agreed but the missus will believe how smart I am saving the 150k, you see, it’s all about perception. However that’s not the point right now. The point is the focus on the budget announcement should not distract us, we are currently awaiting the Messara way forward that’s where we hope some common sense will prevail.
You know, I have expressed my concern on our betting agencies focus on sports betting, the nett return of 2% to racing as against our current 15% deduction, therefore, requires a turnover of 7.5 times the racing deduction.
You know that, as both de Lore and I have alluded to this before. In the silence we are immersed in, we need to know how much of our marketing budget is being focussed which way. I have nothing other than the bits and pieces fed to us, but I would wager the efforts and money focussed on sports wagering must be significantly carried by our share of the budget. Does this matter? Of course it does, the2% alone should be enough to shake the cages but beyond that remember the foundation and purpose of the TAB is to profit from the growth and benefit of our codes.
One wonders how our Board members perceive their role. I am sure despite their lack of exposure they understand why they are there. They have presided over an enormous blow out in costs, borrowing to pay stakes, the numerous attempts at great cost to improve our IT, the dissipation of 100m in reserves, the sale of capital assets to balance the books. All bar one are due for reappointment this July. Regardless of the Messara report, the Minister has no choice or will have little credibility if any are reappointed.
I am off to the Gold Coast Broodmare sale, not to buy, but to have a week of positivity.
Cheers from the Corner Bar. G
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