Canberra on the brink
Crippling cost of insurance cruelling capital’s training ranks with total costs ‘$60k’ higher than across the border
Canberra may be the capital of the nation, but the Australian Capital Territory’s thoroughbred racing industry could be considered as withering on the vine as its trainers struggle to combat skyrocketing insurance premiums and inequitable restrictions placed on them for rich country-only races such as Highways and the Kosciuszko.
Racing at Canberra’s Thoroughbred Park, the host of important Golden Slipper (Gr 1, 1200m) lead-up race the Black Opal Stakes (Gr 3, 1200m), is currently at a standstill due to the Territory’s Covid lockdown, but the sudden closure has now placed a spotlight on the industry’s long-term viability in the city.
Canberra trainers canvassed by ANZ Bloodstock News this week all say it is becoming harder to remain financially viable based in the capital and the biggest issue is the Work Cover insurance premiums imposed on them as employers.
The insurance costs imposed on Canberra trainers is exacerbated by the fact their horses are also placed at the bottom of the ballot order for the $100,000 country-restricted TAB Highway races in Sydney on a Saturday.
The races, along with the Country Championships and $1.3 million Kosciuszko (1200m), have become a big marketing tool for trainers in attracting owners to the bush.
Leading Canberra trainer Matt Dale says he is at least $60,000 worse off training from the capital than what he would be over the border.
“Pro-rata it is a massive difference. It is something like 20 per cent of wages, and some people are on different rates, but I think that is about the minimum,” Dale said.
“It is around $60-something thousand more for my operation to train in Canberra than it would be in Queanbeyan or Goulburn or wherever else in NSW.
“We have to absorb that (cost) and ultimately that’s $600,000 in prize-money you have to earn before you are back to zero based on that figure.”
While Dale is well established and has a strong client base, he says Canberra will struggle to attract new trainers to the city, which in turn affects field sizes and industry revenue generated through wagering.
“The thing is, no young and up-and-coming trainer would set up here purely because of the costs … but being ostracised within Racing NSW is another massive restriction,” he said.
“I have been going to the races in Canberra for 35 years and Canberra was always part of Racing NSW. Their trainers were always part of Racing NSW and every business operating in Canberra at the moment, trainers wise, was built around being part of country NSW.
“Then, in the past couple of years, once the restrictions have come into play, you can’t operate or compete like you could to attract horses.
“You’re at the bottom of the ballot for the Highways, there’s a restricted number in Kosciuszkos and things like that, the biggest thing week-to-week has been the Highways.”
Racing NSW operates its own in-house workers compensation insurance scheme which is another factor in it being considerably cheaper than for Canberra trainers and even those interstate such as Victoria.
Fellow Canberra trainer Doug Gorrel, a former Canberra Times sports editor who prepares his small stable at Thoroughbred Park alongside the likes of veteran Keith Dryden and Group 1-winning trainer Nick Olive, warned the ACT faced an exodus of trainers in the next five years if the exorbitant workers’ compensation premiums imposed on stables is not rectified.
“Look, it is tough here. It is really tough. We have got a different workers comp situation compared to NSW. The ACT one is pretty savage, so, of course, insurance costs are higher as a result and being a small, little jurisdiction which is probably not that interested in racing, as such, it makes it hard,” Gorrel said.
“Racing stables need to be in NSW; we are all slowly going broke in the ACT. It is a great spot to live in Canberra, but it’s probably not a great spot to have a small business, not just in racing, but for any small business in Canberra.
“It’s tough work because of the Territory laws and rules about workers comp and other things.
“I don’t know what the long-term solution is as you wouldn’t think the Canberra Racing Club would want to give up this site where they are, it’s a brilliant location for raceday, they have some terrific racedays because they are ten minutes from the city.
“But maybe down the track it is not going to be a training centre, it’s just going to be a racing club.”
Joe Ible recently relocated from Canberra to Kembla Grange, with the prohibitive public liability insurance believed to be one of the reasons for the promising young trainer’s decision to move.
Paul Jones, who trains in partnership with his brother Matt and his mother Barb Joseph, operates a Canberra stable as well as a base at Sapphire Coast on the NSW South Coast.
He says his workers compensation premium is ten times as much at his Canberra stable compared to what he is charged under the Racing NSW to operate his Sapphire Coast barn.
“I have got two stables, so I have got an idea what it costs me down at the Sapphire Coast stable, where wages are similar,” Jones said.
“Down at the Coast I am on close to $3,000 a year (workers compensation premium) and up here in Canberra I am around $32,000 (last year it was close to $50,000). For my ten per cent (of prize-money won) I have to win $320,000 to pay for my workers’ compensation.
“Last year, even though we went well as far as the winners go – we didn’t have any major wins as such – I think our prize-money won was just under the $1 million mark, so for $100,000 in earnings, half went in workers’ comp.
“As far as the training business goes, especially in the country, if you’re not training winners, you’re not making money.
“Your training fees just cover your costs and really the cream on top that makes it worthwhile is the ten per cent, but when half of it is going in workers compensation, it’s like hitting your head against a brick wall.”
Andrew Clark, chief executive of the Canberra Racing Club, acknowledged the insurance premiums paid by ACT trainers placed them at a significant disadvantage compared to their peers over the border.
“In the Territory, there is uncapped common law which means workers’ compensation insurance is definitely more expensive within the Territory than it is in NSW,” he said.
“The Club’s released initiatives this year to try and help reduce that impost to trainers (through starter rebates) because it is definitely cheaper for a NSW trainer than a Canberra trainer with their Work Cover premiums.
“The Club’s looking at both short-term and long-term options and we’ve got a short-term initiative in place at the moment to help reduce that impost.”
Proposal to build NSW-based greenfield racecourse and training centre
One radical plan floated to revitalise racing in Canberra was to leave the Territory altogether and build a new racecourse and training facility in close proximity to the city, but in NSW.
Greenfield sites near Hall, on the NSW side of the border neighbouring the ACT, have been suggested as an ideal location for a purpose-built racecourse and training centre which could secure the long-term future of the industry in the region.
Decommissioning nearby Queanbeyan, which was to host a race meeting on Monday but it was postponed due to the track being deemed unsafe after weekend rain, as a racing venue would form part of the proposal to centralise training in the region in the suggestion aired by owner, trainer and breeder Neil Osborne of Mane Lodge.
“I brought it up at a meeting some time ago where I told (the Canberra trainers), ‘sooner or later the government is going to get rid of you altogether and I’d be looking at a plan to move into NSW’,” Osborne said, who is based in NSW at Sutton but gallops his horses at Canberra.
“They should consider a joint venture with Racing NSW if they would entertain it and get rid of Queanbeyan.
“Whether it’s a joint venture with the ACT Racing Club or the Southern Districts or whatever you want to call it, and move just over the border. There’s a couple of really good sites there just outside Canberra near Hall.
“Hall is in the ACT and within one kilometre of Hall, there are two sites that I am talking about, on the Barton Highway, so you have still got access to all the Canberra people and the business that goes on in Canberra. All you need is to move 12 kilometres from where it is now.
“It would save the trainers in Canberra over a million dollars a year in workers compensation by moving to NSW. I have canvassed a lot of the trainers and that they should be trying to get together on this issue, but at this stage it is just my opinion.”
Jones says if a large-scale greenfield project ever got off the ground – and how it would be funded is an obvious question – trainers would be flocking to the facility.
“Put it this way, if they did that, they’d have every trainer signed up from Queanbeyan, here in Canberra and Yass, it would be a super centre and they would have close to 300 to 400 horses in work (instead of the 200 at Canberra there currently is),” Jones said.
“I think we would not be in a position where we are shrinking in numbers at the moment and I think everyone would be able to plan for the future.
“We built a stable down at the Sapphire Coast at the start of the Highway (races initiative) and we started to see really good growth in country (ownership) but, before we’d finished building the stables, we (Canberra trainers) were kicked out of the Highways.
“It’s a good alternative for our horses, but instead of the business growing, we’ve stagnated, if not shrunk somewhat, because of the increasing workers compensation and the issues we have in getting to the Highways.”
Club banking on Thoroughbred Park redevelopment
Clark, however, rejected any suggestions of the Canberra Racing Club leaving Thoroughbred Park at Lyneham, which is just ten minutes drive from the city centre.
The Club is currently in the process of gaining approval for the rezoning of the land at the racecourse which would enable the proposed construction of commercial and residential developments, a retirement precinct and a mixed use precinct.
It is modelled on a similar project which was undertaken by the Brisbane Racing Club at Eagle Farm where land was used to build residential and commercial premises and new stabling was constructed inside the racecourse itself.
“We believe we’ve got a bright, long-term future. We’re currently in the process of working through a significant precinct master plan of our venue at Thoroughbred Park,” he said.
“That is in the early stages of the Territory plan variation. It is about to be lodged and that would secure our long-term sustainability within the Territory.
“We are committed to Canberra with where we stand now.”
He also believes thoroughbred racing has the support of the Territory’s Labor government and played down the threat of the industry being extinguished like greyhound racing was in the ACT.
“All sides of the political equation in Canberra committed to extending the MOU (memorandum of understanding) that we had in place in the lead up to our last election and that, along with our good relationship with government, gives me confidence that our funding will continue,” he said.
“We’ve got an equine welfare officer and we are about to release an equine welfare report about how we deal with things and we’re working with the ACT government long-term on a range of matters such as that precinct masterplan and equine welfare, so our MOU does give me confidence that we do have a long-term future in Canberra.”
A matter-of-fact Osborne still harbours doubts about the ACT government maintaining its support of the industry.
“They’ve got rid of the greyhounds. If they put a pen through thoroughbred racing in Canberra, then (the trainers) are stuffed,” Osborne said.
“People say that with a change of government, it’ll be better, but they will never, ever change the (Labor) government in the ACT while the public service is the majority employer in Canberra.” Gorrel also says it is hard to foresee the Territory government suddenly changing its tune towards racing.
“We love the game to death and no one goes into it to make heaps of money – it is a lifestyle more than a business – but it is just not sustainable as a business model the way it is,” the journalist-turned-trainer said.
“I think at some stage we have got to get at least into the NSW insurance scheme, but if that’s not possible, I can’t see stables surviving in Canberra unless this Labor Government suddenly does an about face and values racing higher than what they do at the moment.”
Gorrel flagged Wagga Wagga, in southern NSW, as a hub for Canberra trainers to relocate to if a planned on-course stable complex at the Murrumbidgee Turf Club was built.
“Wagga’s the place … (that) is screaming out for major Racing NSW investment because they have got the best racetracks in southern NSW and they are just a super racing city,” he said.
“Wagga’s the place where most of us would probably head if we could but, at the moment, they have got no (available) stables.”
Why is Canberra racing on hold?
When the state lockdown was implemented on August 11, a request by the Canberra Racing Club for exemptions for NSW-based jockeys to ride at its meetings was rejected by the ACT government.
Canberra-trained horses are still permitted to be trained on the track daily and race in NSW and interstate, but ACT-based participants cannot attend those meetings.
“They can’t attend themselves, so if they were to go into NSW and return then they would have to go into 14 days quarantine, so they have had to rely on employing strappers at those regional meetings and in Sydney to look after their horses when they are transported for them because they can’t send their own staff, either,” Clark said.
“It has been a challenging time for everyone.”