New Zealand industry welcomes government relief package
Leading New Zealand racing figures have welcomed the government’s decision to grant a rescue package to its ailing industry, saying that the bail-out provides a secure platform on which the industry can rebuild in the wake of “years of bad administration” and the crippling impact of the Covid-19 pandemic.
Racing minister Winston Peters, also the nation’s deputy prime minister, announced a NZ$72.5 million support package for the industry, which will be included in the Ardern government’s budget handed down by finance minister Grant Robertson on Thursday.
Of most urgency is a $26 million relief grant to allow the Racing Industry Transition Agency (RITA) to pay its outstanding supplier bills, with RITA facing the risk of defaulting on its debts by Friday.
A further $24 million will ensure that RITA and New Zealand’s three racing codes – including New Zealand Thoroughbred Racing (NZTR) – are able to resume their activities while maintaining what Peters calls “baseline functionality”.
Also included is $20 million to construct two new synthetic race tracks at Awapuni in Palmerston North and Riccarton in Christchurch. They will complement a track already under construction in Cambridge, a crucial first all-weather surface in the perennially rain-soaked New Zealand.
The remainder of the package will be allocated to the Department of Internal Affairs in a fast-tracked bid to stop wagering revenue from leaving New Zealand’s shores. A rise in off-shore gambling, coupled with Covid-19’s effect on wagering, has had a knock-on effect to community and sport groups that rely on a share of gambling revenue to operate.
“We knew from the beginning of the Covid pandemic that the racing industry was facing an unparalleled crisis in its history,” Peters said yesterday. “The racing industry is seriously underestimated for its important contribution to our regions and our economy.
“Our studies indicate that it contributes $1.6 billion to the economy each year, there are 15,000 full-time racing industry jobs and nearly 60,000 indirect jobs. There are 15,000 owners, 800 trainers and 200 jockeys. Not only is New Zealand’s bloodstock world class, it’s a significant export earner. All are facing an unprecedented threat.”
New Zealand’s racing industry was in the middle of a reform package after Peters commissioned Australian racing heavyweight John Messara to prepare a review of the industry.
The Messara Report, which was delivered in August 2018, was blunt in its assessment of the state of New Zealand racing, declaring that the “thoroughbred racing industry in New Zealand today is in a state of serious malaise”.
The report offered 17 recommendations across a wide variety of areas, including governance, funding, prize-money, racecourse rationalisation, TAB outsourcing and animal welfare.
RITA, which replaced the New Zealand Racing Board (NZRB) and manages the TAB, the New Zealand tote, across all three codes – thoroughbreds, harness racing and greyhounds – has been tasked with implementing the report’s recommendations and administering the industry’s overhaul, acting as a temporary governing body until a permanent structure can be put in place.
“It’s well documented that the racing industry has experienced several years of financial underperformance. It was part-way through a serious reform program, when Covid arrived. As one expert put it, this has created a perfect storm,” Peters said.
“We can’t gild the lily – this has taken the industry to the brink of insolvency. It’s a matter of urgency for the government to provide support. We have to protect what we have and we have to rebuild for the future.
“Sadly, there has been some internal squabbling in racing circles. Some blame [RITA] for the problems it inherited. Look, to be honest, we’ve had enough of mostly old men leaning against the rail, scratching their derriere and blaming everyone else. Fortunately, common sense is now prevailing and most accept that common sense is the key to recovery.”
On behalf of the thoroughbred racing industry, NZTR chairman Dr Alan Jackson welcomed the intervention but also warned that it was a lifeline that should not be taken for granted.
“The Minister described this as the first step in the restoration of racing, and emphasised that this a long-term process,” he said. “The industry needs to be aware that the support package is a leg-up, not a hand out and there are expectations from government that the industry will make the necessary changes required to live within its means.
“NZTR, along with the other codes, will also be continuing to work with RITA to ensure that future reforms are in line with those expected by the Minister and others in government.”
The package, which was announced live on free-to-air television by Peters, was warmly received by some of New Zealand’s biggest stakeholders.
“We all know that change is needed and we are fortunate enough to have a government that understands the value of the racing industry and the contribution that it makes to the economy – both domestically and in export dollars,” David Ellis, whose Te Akau operation is an industry leader in both New Zealand and abroad, told ANZ Bloodstock News yesterday. “We need now to be proactive and finish up with a leaner and sharper and more efficient industry.
“I think that Covid-19 has changed the world and certainly the racing industry in many ways. Our industry is not exempt from the Covid-19 problem. The landscape is different, but the industry leadership now has the financial support and the legislative framework to empower it to make the tough decisions that are necessary for the future prosperity of our industry.”
Andrew Forsman, who – with Murray Baker – has formed one of New Zealand’s most formidable training partnerships, believes that the government’s lifeline will give the industry an opportunity to implement a more efficient and effective model, especially with more stakeholders choosing to invest in Australia rather than New Zealand.
“We’re suffering from 20 years of poor administration, I guess,” Forsman said. “RITA, who took over from the TAB, was riddled with debt but thankfully the government has bailed them out and given them enough to prop us up.
“Hopefully, we can now put in the measures in place that were laid out in the Messara Report two years ago to try and get the industry running efficiently again.
“We just have to get back on to a level playing field, clear that debt and allow RITA a little bit of room to move in cutting costs. That’s something that has had to happen for a while and it hasn’t happened, we’ve been too top-heavy and with no return to the stakeholders. We are starting to lose investment to Australia with a thriving industry over there.”
While acknowledging that Peters is viewed as a divisive figure in the New Zealand political arena, Forsman believes that having a racing minister with a passion for the industry has been a positive for its stakeholders and participants.
“I think Winston has at least made things happen for us: commissioning the Messara Report, putting RITA into place, those things,” Forsman said. “They’ve had a pretty big mess to clean up, two decades of neglect really, and at least Winston has been on our side in that regard.
“Hopefully now, we can put the right processes in place and have a sustainable model heading forward.”
Fellow Group 1-winning trainer Tony Pike, president of the New Zealand Trainers’ Association, is another with praise for the government’s actions.
“It is obviously huge for the industry,” he said. “Without government support the TAB, or RITA were heading west. By the sounds of it, they hadn’t been paying suppliers for a while, with $26 million to clear their current liabilities. This provides us with enough money to carry on until domestic racing gets back on track in addition to sports and gaming.”
However Pike pointed out that, while it has been framed negatively in the New Zealand mainstream media as a lifeline for the gambling industry, the racing scene is much larger than just the wagering sphere.
“For people at the coalface, it is not considered a gambling industry,” he said. “It employs a huge number of people and an enormous amount of care is taken looking after the horses and we are renowned on the world stage.
“It is a stimulator for the local economy. Areas like Cambridge and Matamata, their local economies rely heavily on the thoroughbred industry. It is a massive export earner with horses being sold overseas and income coming from overseas investors who support breeding and training in New Zealand.”
Now, with the future of the industry secure in the short-term and promising in the long-term, the primary focus is returning to a sustainable racing product in the medium-term, with racing set to kick off again in early July and a host of top New Zealand gallopers set for spring riches on both sides of the Tasman.
“It’s certainly a very exciting time for Te Akau, we have a stable full of really nice horses and the best lot of yearlings that we’ve broken in,” said Ellis, who is set to be represented by Group 1 winners such as Te Akau Shark (Rip Van Winkle), Melody Belle (Commands) and Probabeel (Savabeel) later this year.
“It’s nice to be able to send our team to the track, start educating the yearlings in the barriers and start the whole process again. It’s a very exciting time for certain.”
Forsman added: “We’re very happy to be back in the swing of things and very glad to have a job. A lot of people aren’t that fortunate.
“While we’re probably at half-capacity at the moment, we’ll fill up over the next few weeks. We have lost owners to Australia and that’s always frustrating, but we just have to knuckle down now. It’s certainly nice to be back and we can’t wait to be back and racing.”
Peters – whose press conference received more attention for his call, as the most senior Maori member of Jacinda Ardern’s government, to adapt the traditional hongi greeting for the coronavirus era – did have one hope for New Zealand to be able to match their trans-Tasman rivals Australia.
“I don’t know if this news will reach the Queen but I hope that it might reach Buckingham Palace,” Peters said with a grin in response to a question about the Queen’s approval of the continuation of racing during a phone call with Australian prime minister Scott Morrison last week. “She has a great interest in racing and is seriously knowledgeable about it.
“In the long-term, if we get all the steps correct, there is no reason why racing in this country cannot be a world-class industry, stronger than ever. We are out of the gate, but we have a distance to cover before we get to the home straight and the winning post. That said, we are going to make racing great again.”