Privileged bloodstock owners must pay their share of tax like rest of us

WHEN IT comes to the bloodstock industry, the rest of us simply are not at the races!

A 30-year-old measure brought in by Charlie Haughey means that multi-millionaires have earned untold wealth from stallions for whom romance is a way of life.

Haughey was Minister for Finance in 1969, and also a stud owner himself, at the time when this nice little earner was let out of the stalls. An insignificant little detail like conflict of interest wouldn't have particularly worried him.

Since then, fees earned from stallions at stud are exempt from tax, which means that breeders in the golden circle are raking in millions every year and do not have to pay one cent to the Revenue Commissioners.

Although it's difficult to be categoric about how much Haughey's largesse to the horsey set is worth, it has been estimated that the State loses out to the tune of about 100 million a year.

According to sources within the industry it is worth between 300 million and 400 million a year. Put another way, if the tax-free status of the bloodstock industry was reined-in, and the standard rate of 21% tax slapped on the revenue, it would probably fund almost 1,000 extra hospital beds.

The present Government, and indeed, successive ones, have been quite happy to live with this situation, despite the fact that multi-millionaires have quite legitimately been making more and more millions out of this equine sex.

On that criterion alone, they could hardly argue that they earned the money. The millions, are, essentially, unearned income and should attract some level of tax.

So ludicrous is the situation that Manchester United manager Alex Ferguson can earn up to 5 million a year tax-free, simply because a horse he is a co-owner of has been retired to stud in this country.

Roy Keane's boss struck it lucky with Rock of Gibralter, and the blessings of God on him Alex Ferguson, I mean, not the horse.

How many people could afford to splash out 3 million on their daughter's wedding? You know the answer to that yourself, but John Magnier could afford to do so earlier this year.

He owns Coolmore Stud, as well as expansive operations in Australia and America, and reputedly controls three-quarters of the Irish bloodstock industry.

Coolmore, alone, has about 50 stallions at home, in the US and Australia, and possibly the most famous is Sadler's Wells. His stamina is such is that he is able to service up to 200 mares every year. At around 200,000 a go, it's hardly any wonder that John Magnier has properties also in Geneva, Barbados and Marbella.

And Sadler's Wells is just one of the 350 top breeding thoroughbreds in the country doing his bit for the privileged few.

For some inexplicable reason, that privilege seems to be an untouchable holy cow, if you'll pardon the mangled metaphor. Although the economy is in free-fall, multi-millionaires have been promised that they will continue to be exempt from tax.

Bertie Ahern said during the week that the bloodstock industry's tax-free status is under review. But that's rather like saying that the last race in Fairyhouse was subject to a steward's inquiry, except in this case the steward, in the shape of Finance Minister Charlie McCreevy, has decided the result.

There will be no photo-finish if it comes down to a tussle between Bertie and Charlie McCreevy on this issue. McCreevy will win with a few lengths to spare. As recently as last September he declared that changing the legislation was a non-runner.

He seems quite happy that the multi-millionaires who enjoy a jet-set lifestyle in the industry he has a great affection for, should continue to enjoy it at the expense of those who are waiting interminably for life-saving operations.

In a comment which was as understandable to the layman as a bookie's tic-tac, Bertie Ahern said in the Dáil: "Horses can move around the place, and so can the industry, so the taxes foregone are only foregone when the animals are in this country. When they're not, not only do you not have fees, but you don't have the employment."

A lose translation, I think, is that the fees were never taxed, so what we never had we'll never miss, but that employment in the industry would suffer if a tax handicap were imposed.

At the moment, Ireland is the most attractive place in the world for horse breeders because they are not subject to a tax regime in any shape or form.

I don't think the imposition of a tax on such enormous earnings is going to scare off the industry to the extent that the 30,000 or so people employed in it would end up in the knacker's yard.

Some level of taxation would still leave this country an attractive location, and galloping inflation is something the industry has never had to worry about unless you are one of those cleaning out stables.

Actually, people working in the industry have more to worry from Charlie McCreevy than any of their bosses living most of the time abroad.

The Minister for Finance, who made the Celtic tiger disappear faster than Paul Daniels could, gave us an idea what next month's budget will be like when he announced the Estimates yesterday.

Twelve months ago we were told there was a budget surplus of over 2 billion and now the country is facing a possible deficit of the same amount.

Instead of telling those who can afford to pay up like the bloodstock industry the Minister has threatened the country's workers with a possible pay freeze.

The same Minister, comfortable in the security of a considerable pay hike on an already extravagant salary, which he, and his colleagues got recently, has no problem in telling the rest of us that belts have to be tightened.

Neither has the Taoiseach any problem in telling the 200,000 people who were promised a medical card as part of the health strategy, that they can forget about it. It will be mainly low-income families who will suffer from this latest u-turn on the part of the Government.

And if your children are attending school in one of the sub-standard, run-down buildings around the country, the chances are they will be for the foreseeable future.

Like the workers in IFI whose justified demands for their redundancy entitlements got scant consideration from the Government, which is the majority shareholder, cutbacks will be the order of the day for next year.

If you are depending on getting a house from your local authority, you can probably forget it. There are now almost 100,000 on public housing waiting lists.

Things are so bad in Cork that the City Council has had to put the names of 600 hopefuls into a raffle for the 40 houses they have available under the State-backed Affordable Housing Scheme.

Now, despite all those problems, the Minister for Finance has his priorities right!

Under no circumstances will the pampered super rich of the bloodstock industry have to worry about such mundane things as income tax because they might threaten to leave the country.

It's about time such privilege was put out to grass.

Or the Minister for Finance.