John Messara

Racing in New South Wales, Australia received a major boost last November when the state government passed legislation to reduce its share of wagering tax revenue. The legislation brings the government's sharing of the wagering taxes in line with the state of Victoria, and means an additional A$235 million will be funneled into New South Wales racing over the next five years. That money will go towards the likes of purses, with an early focus on country and provincial racing; racecourse capital developments; marketing; and training and apprenticeship programs in the state's rural areas. It also secures the financial future of The Championships, Sydney's two-day season-ending showcase that bookends the Inglis Australian Easter Yearling Sale Apr. 2 and 9. The TDN's Kelsey Riley sat down with Racing NSW Chairman John Messara to discuss how parity came to fruition, and what will be done with the early funds.

KR: Can you describe the process Racing NSW went through with the New South Wales government to have the legislation changed that would lead to parity with Victoria?

JM: It was a long process, but achieving “parity” was one of the principal objectives which the new Racing NSW board set for itself in early 2012, after I was appointed chairman. For us in the racing industry, the inequity of the NSW wagering tax regime was obvious, but it was a quite obscure concept to the decision makers in the state government and it is always difficult to persuade any treasury to give away revenue.

So it was a big job to convince the government and its advisers of the disadvantage that NSW suffered from the differential tax rate and the impact that parity would have on NSW racing and the NSW economy as a whole. This involved the commissioning of independent studies by both ourselves and the government and, of course, numerous meetings during the process. We enjoyed support for our cause from a few quarters in the media and this brought the issue to the fore. In the end, with the steadfast support of our Racing Minister, the Hon. Troy Grant, the NSW State Premier Mike Baird granted us parity on a graduated basis over five years.

This has palpably raised confidence in the Thoroughbred industry and allowed us to begin to execute our Racing NSW Strategic Plan for re-invigorating the state's racing industry. That's important for national racing too, because we're the largest jurisdiction in Australia.

KR: I understand that the first A$10 million instalment went to The Championships and Highway races. Can you explain why these were the first priorities?

JM: The first two Championships events were funded by government grants pending consideration of our submissions on parity. It was always intended that The Championships would be funded out of parity money if and when it was granted. As for the Highway Races, they form part of a much larger stimulatory package for country and provincial racing, where the ratio of training costs to prize money was more out of kilter than in Sydney.

Regional participants are a critical part of our industry and their sustainability is important to the overall health of NSW and Australian racing. As funds from parity permit, from July 1 this year, minimum prize money will rise 33% in the country; we will hold 40 showcase meetings across the regions in NSW at elevated prize money levels; and of course, we've already launched the Country and Provincial Qualifiers and Championships. All this has brought new life to country and provincial racing.

KR: It was also announced that Racing NSW would put A$1 million towards a trainee and apprenticeship scheme for youth in regional NSW, and funds will also be put toward capital developments at country and provincial tracks. Can you explain why these are important initiatives?

JM: The trainee and apprentice scheme will boost the supply of various skills, such as farriery, track maintenance, etc. that are required for future industry growth.

We have had a major agenda of capital expenditure in country and regional areas totaling A$70 million over the last two to three years, which is still underway. This program has been funded from a once-only windfall from our Race Fields Case. However, the capital expenditure you are referring to in the Strategic Plan is for capital works on a continuing basis into the future, as required.

KR: How will the government, and the state, benefit from reducing its share of the state wagering taxes?

JM: The state is set to benefit economically from additional interstate and international tourism, employment, investment and also from the multiplier effect of the added prize money distribution, especially in the country and provincial regions.

KR: The first day of the third renewal of The Championships went off successfully Saturday, with the second day set for Saturday, Apr. 9. Can you summarize what has been accomplished with this meeting in its first two years, and what the future vision is for The Championships going forward?

JM: The experts tell me that it takes five to 10 years to establish a brand. I think the first two years of The Championships have launched a brand that will stand alongside the great racing events of the world. Importantly, The Championships have been able to attract the best horses from Australasia as well as some international competitors.

The Championships have been established from races with a rich history, but they have been lifted to a new level. The Queen Elizabeth S. is now Australia's highest-rated race and as a 2000-metre race I hope for it to become an important target for the world's best horses, while the TJ Smith S. is the highest-rated sprint in the world. Our great city of Sydney now has a racing event that is truly aspirational and that showcases the Thoroughbred industry in our state of NSW. Valuable economic consequences are beginning to flow for both the industry and the state.