Government continues scandalous handouts to dog and horse industries

FIVE hundred and fifty million euro. It’s a fierce amount of money. I think of it as Charlie McCreevy’s legacy, God bless him. It’s around €140 for every man, woman and child in the country.

More than the amount we’re planning to spend on the entire health capital budget this year. A lot more than the amount we’ll spend on all of the arts, tourism and sports programmes designed by Charlie’s colleagues in the Government.

Yes. It’s the kind of money that would solve all sorts of problems.

More than enough, for instance, to end the queues in the accident and emergency wards of our hospitals. And those queues are getting longer and more inexplicable.

Recently I came across a case - and this wasn’t out of the ordinary by any means - of someone whose life-saving operation was delayed for four days. What was the problem, his family enquired. As far as they could find out, there was no problem in admissions, none in the theatre. The surgeon and the nursing staff were all on hand. The beds were ready in coronary care or intensive care, wherever the staff decided to send him once the six-hour operation was complete. But it transpired the hospital couldn’t be sure that there would be a bed available in a recovery ward once his stay in coronary care, perhaps five days later, would be over. They wouldn’t let him in for the life-saving operation until they could be sure he would be comfortable a week later. But, sure, €550m would even deal with that. Or it would fix every leaky roof and every broken bit of heating in every primary school in the country.

We are planning to spend €201m on the primary schools building programme this year. So if the €550m were put into a fund dedicated to that purpose, we could double the amount we are planning to spend on primary schools throughout the country this year and next, and still have about €150m left over. And according to the Government’s figures, that would be enough to build nearly 1,100 three-bedroomed houses.

So it’s no small legacy. But Charlie never intended it for any of those purposes. He’d regard all that as frittering the money away.

No, Charlie’s great plan was to create a totally different kind of fund, for a really useful social purpose. It’s the Horse and Greyhound Racing Fund. And out of all the money we’ll put into it, the horses will get 80% and the doggies 20%.

Charlie started this fund in 2001, when he and Joe Walsh guaranteed to give the two sports all the money collected in betting taxes. They persuaded all their government colleagues - colleagues who found they couldn’t ring-fence money for old people or broken-down schools or people with disabilities - to ring-fence all the betting tax instead, so no-one else could get any of it, and give it to the gee-gees and the doggies over four years with a review at the end of that period.

But Charlie told them, and Joe Walsh told the Dáil, that in order to guarantee that a review would take place, they would put a limit in place of €254m. That’s the amount of tax they were expecting to come in over the four years 2001-2004 inclusive, so that’s the amount of money they guaranteed to the two sports.

And Charlie and Joe were as good as their word. In 2001 they gave €58.89m; in 2002 €68.06m; in 2003 €64.19m; and in 2004 €66.91m. A grand total of €258.05m. And now, just as Charlie and Joe depart the scene, the Government, as a sort of going-away present for them, have decided to increase the fund by another €300m, to the total of €550m, and to keep it going for another four years.

I call it Charlie’s legacy because it was a promise Charlie made first - and, by God, he kept it. He made the promise in a famous interview in the Racing Post, when he said, “The next logical step is to put racing’s finances on a permanent footing. If that is not done, racing will be at the whim of the Government of the day and when the pressure comes for expenditure on things like health and education, racing will go down the political priority list ... Now is the opportunity, while myself and Joe Walsh are ministers, to finalise the matter once and for all.”

Alas, even good fairies don’t get everything right, it seems. As I told you, their plan was to ring-fence the betting tax and give it to our nice four-legged friends. But as soon as they began to do it, didn’t Charlie reduce betting tax from 5% to 2%, and as a result didn’t the revenue start to go down!

It was all right for 2001 and 2002 - the same amount came in as they gave out. But in 2003, only €47.95m came in, and in 2004 the yield from betting tax went down further, to €38.42m. So in the first four years of the fund, they managed to give out just about €45m more than they took in. And each year from now on the yield will do down further. Because, not only is the betting tax reduced, but more and more people are betting on the internet, where they don’t have to pay tax at all.

So in addition to the shortfall of €40m they already have, over the next four years they’re going to pay out €300m, while they’re not likely to take in more than around €100m.

All together, over the eight years (and I’m sorry for all these figures) the Horse and Greyhound Racing Fund will collect around €315m but it will pay out €550m. That’s a shortfall of €235 million.

You’ll never guess who is going to have to pay that.

Yes, that’s right, it’s all going to come from general taxation. Every last penny will be guaranteed, and all of us saps on the higher rate and on the standard rate of tax will have to pay our share. Even if we don’t know one end of a horse from another.

But as we’re paying up, we should all remember the really good news. The horse racing industry has a plan. Their plan is to increase the prize money available for horse racing from the figure it was in 2002 (€46) to at least €60m by 2007 and to reduce the amount owners pay into the prize fund (through entry fees) from 31% to 25% of the total fund.

So, the more of our taxes go into horse-racing, the bigger the prizes will be. And the very rich men and women who already win a disproportionate share of those prizes (all tax-free, thank goodness) will have to pay a lot less to enter their horses in the races.

I have to say, I think that’s a hell of a legacy. Every time I think of, every time I do the sums, I realise again that Charlie is one Finance Minster we should never forget.