Parliamentary report into proposed Rosehill redevelopment slams Racing NSW

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A parliamentary report into the mooted sale of Rosehill has slammed the way in which the proposal was handled, asked the state’s corruption watchdog to investigate the matter, and recommended an inquiry be considered into the operations of Racing NSW.

The keenly awaited 160-page report of the Legislative Council’s Select Committee on the Proposal to Develop Rosehill Racecourse, tabled on Friday, also highlighted severe doubt over how much money the proposed sale would generate, and raised questions over the benefits to the state’s taxpayers.

Having also uncovered concerns over probity matters in the messy and rushed manner in which the proposal was first handled, the report has also been forwarded to NSW’s Independent Commission Against Corruption (ICAC) for its consideration.

After an inquiry taking evidence from a host of stakeholders through four public hearings, the committee’s report contained a range of damning findings into the handling and the detail of the proposal, which stunned Australian Turf Club (ATC) members and the wider racing committee when aired late last year. It is due to be voted on by members on April 3.

The report’s ten findings included that the state Labor administration and premier Chris Minns had not adhered to the government’s unsolicited proposals submission guidelines in announcing and championing the plan, in a press conference at Rosehill last December 7.

In details aired at the time, the government and the ATC had said the sale would raise an estimated $5 billion for the embattled club, and lead to the construction of 25,000 homes on the Rosehill site. It was also claimed a metro station would be built there, but that the ATC had been informed this would only be approved if 40,000 dwellings were constructed in the vicinity.

However, the report noted evidence had suggested a more realistic figure from the sale would be $1.6 billion, and said the inquiry “did not receive evidence” that the ATC had any basis to believe 40,000 homes would be needed to justify the building of a metro station.

“There is conflicting evidence and uncertainty with the financial assumptions behind and the financial viability of the proposal to develop Rosehill racecourse,” the report said in one of its findings.

The report found that when the ATC’s head of membership and corporate affairs Steve McMahon met with Minns – a long-standing friend – on October 30 last year to “assess whether the government would be opposed to the idea”, the ATC board had yet to be informed of the proposal.

Amid questions over how enthusiastically and rapidly the government had embraced the plan, and whether it adhered to proper processes under the government’s unsolicited proposals guidelines, the description in Minns’s diary that his meeting with McMahon was a “meet and greet” forms part of the reason why the report has been forwarded to ICAC.

“The evidence before the committee raised concerns that the proper process had not been followed by the government in the early stages of its dealings with the Australian Turf Club about the proposal,” committee chair Scott Farlow, MLC, wrote in his foreword summary.

“The committee found that the premier’s diary disclosure of [the McMahon meeting] as a ‘meet and greet’ was inaccurate, misleading and did not adequately describe the purpose of this meeting. It was inappropriate given the long-standing friendship of Mr McMahon and the premier and the nature of the matter discussed at the meeting.

“The committee also found that the manner in which the premier and government announced the proposal to develop Rosehill racecourse for housing was in breach of governmental guidelines on unsolicited proposals by failing to maintain impartiality when it championed the proposal.

“Throughout the inquiry there was significant conflicting information that was presented, which asked more questions than it answered. Given this conflicting evidence and unanswered questions before the committee with respect to concerns regarding direct dealings and conflicts of interest as part of the proposal to develop Rosehill racecourse, it led the committee to take the step of referring this report to the ICAC upon its tabling.”

While the plan to sell Rosehill would appear dead in the water, given the hostile response of ATC members, who must approve the sale, it has inadvertently shone a light into the operations of Racing NSW, including its long-standing chief executive Peter V’landys.

The report said “multiple witnesses and submissions raised serious concerns about Racing NSW” and how these may impact the nature of the body’s involvement in the proposal.

These concerns were “a general lack of transparency and accountability, including of finances, a culture of bullying, the tenure of the chief executive [and] the controlling nature of Racing NSW”.

The report noted witnesses from RNSW had “vigorously” defended the body. V’landys had decried the allegations against his organisation, and denied any complaints about the culture at RNSW and about sexual harassment.

However, the committee found the allegations were sufficiently serious and plentiful to make a recommendation that the Legislative Council consider an inquiry into RNSW. This was one of five recommendations tabled in the report.

“Racing NSW as both the regulator and commercial operator of the industry is in a very unique position. Large amounts of evidence were received by the committee both public and confidential, from a wide range of participants who are involved in the racing industry concerning Racing NSW,” the report said.

“This evidence alleged serious concerns with Racing NSW and in particular its chief executive officer, many of which were denied by representatives of Racing NSW in their evidence before the committee and subsequent correspondence to the committee.

“While noting that the matters did not fall within the terms of reference, the committee was particularly concerned by the significant volume of confidential evidence we received from whistleblowers within the industry, which raised serious concerns about Racing NSW, including allegations of illegal activity and other conduct that is plainly not acceptable from a regulatory body.

“The committee grappled with how to address these allegations without breaching the confidentiality of those who came forward, many of whom feared retribution for their actions.

“The committee believes that these matters are worthy of further investigation.

“We accordingly recommend that the Legislative Council give consideration to establishing an inquiry into the operations of Racing NSW.”

The report also suggested RNSW should be open to greater government scrutiny, saying: “Racing NSW is established under the Thoroughbred Racing Act 1996. The Act sets out the functions and powers of Racing NSW, and specifies that it is not subject to direction or control by or on behalf of the government. The committee is of the view that the various provisions of the Act require examination.”

RNSW has also come under the spotlight with a new investigation into whether it was guilty of a possible contempt of the inquiry for “discouraging or intimidating” witnesses from giving evidence.

“On 12 August 2024, the committee received correspondence from Racing NSW, responding to matters raised at the hearing on 9 August 2024,” the report said.

“The correspondence made specific reference to allegations raised at the hearing by a member arising out of confidential evidence received by the committee. Racing NSW’s correspondence stated that it had ‘investigated the issues raised with utmost urgency’.

“The committee met to discuss this correspondence. Due to the rest of the contents of the correspondence from Racing NSW and other contextual factors, the committee was concerned that such an ‘investigation’ could be interpreted as a wrongful attempt by Racing NSW to uncover the identity of confidential submission authors, potentially with the intention of discouraging or intimidating these inquiry participants from giving evidence.

“The committee subsequently resolved to prepare a special report to the House, recommending that the correspondence be referred to the Privileges Committee for inquiry and report on the basis that it may constitute a substantial interference with the work of the committee and therefore a possible contempt.”

Fears from some stakeholders that most of the proceeds from the sale would end up going to RNSW, rather than the ATC which owns Rosehill, were also highlighted in the report, as mentioned by syndicator and prominent industry figure Jason Abrahams, who gave evidence as a spokesman for the Save Rosehill Group.

“What I can say is that there has been a concentration of power and wealth by Racing NSW to the detriment of all clubs, not only the ATC,” Abrahams told the inquiry.

“In the submission made by Racing NSW to the government, they mentioned that they would like to divert proceeds from the sale away from the club to other areas. That leads you to think, as an ATC member, that ATC members won’t get the full sale proceeds because Racing NSW looks to be elbowing in on the proceeds of the sale of an asset which, frankly, they don’t own.”

V’Landys, however, told the inquiry RNSW had no intention of “seizing” proceeds from the planned sale.

In another of its findings, the report also castigated the ATC for signing a memorandum of understanding on the proposal with the government without proper consultation with its members.

“The announcement … was poorly handled,” it said. “Communication between the Australian Turf Club, its board and members, and the general public should have been better managed throughout the whole process.”

The report also found the suggestion contained in the proposal that a new replacement racecourse might be built at the “Brick Pit” site at Homebush was unsustainable, and that no other feasible site had been identified in metropolitan Sydney.

In its final finding, the report said evidence tendered had not demonstrated the proposal presented “immediate monetary value for the New South Wales taxpayer or would, alone, make a significant impact in meeting New South Wales’s national housing accord targets”.

“It may, however, provide wider economic and social benefits and make a positive contribution to resolving a chronic housing shortage in Sydney,” it said.

The report’s findings and recommendations were not unanimous, with three Labor MPs on the inquiry writing a dissenting report saying the referral to ICAC was “calculated to cause political damage”.

The NSW government has three months to reply to the report. It is not compelled to act on the findings or recommendations, but would have to provide reasons as to why it would not.

V’landys was contacted for comment on this article.