A Curate’s Egg describes something that is at least partly bad, but has some arguably redeeming features.
For a parliamentary Inquiry that started off with a hiss and a roar about alleged abuses in the NSW greyhound industry, the eventual report is a bit more logical. “The incidence is minimal”, it found, and “greyhound owners and trainers take great care and pride in their dogs”.
So much for the nonsense put about by a poorly researched ABC 7:30 program, Fairfax press and numerous animal lover organisations, including the RSPCA. All either got their facts wrong or used information selectively and out of context. Even so, it gave the industry a clear message that it needs to tell its story better and earlier.
What the Inquiry did find is that the NSW industry is desperately short of money and also that it needs organisational change. The former claim is pretty right and revolves around the crazy 99-year commission agreement signed off fifteen years ago. On the latter point the inquiry has got the right idea but has ignored the needed solution and instead proposed one that would make it worse.
The report now goes to Parliament and to the responsible Ministers but will be followed up by a second report (due in late June) which will include comments on financial options yet to be assessed by the Treasury.
The money question will, as always, depend on the will of the state government to over-ride the current conditions of the Racing Distribution Agreement in one way or another. The prospect of greyhounds continuing to subsidise the gallops and trots is unrealistic and unworkable, yet those two codes are immovable in demanding it stay as it is, despite their declining patronage figures and greyhound’s increased popularity.
To improve the working of GRNSW the Inquiry has recommended that the board be increased by two members, who should come from the ranks of licensed persons. There are two fundamental errors in that reasoning.
First, it implies that the current system and the current board members do not perform well enough, but bases that view primarily on the complaints of various participants and outside groups. They may well have reached the right answer but the evidence is mostly sketchy and reflects personal opinions, including those of animal lover groups, few of which can be substantiated. A better conclusion would emerge only from a forensic examination of the board’s actions – did it make good decisions and did their investments produce results, for example? They have never been properly scrutinised, but might be if the Racing Integrity position is enhanced, as the Inquiry recommends.
Secondly, to return to the bad old days by installing a couple of owners or trainers on the board would be to dismiss all the reasoning behind the recent appointment of (supposedly) independent people and to re-introduce the conflicts of interest that plagued previous boards. Justice would never be seen to be done. In any case, it tends to downgrade the importance of choosing members with special qualifications. Running an industry is a very different thing to running a greyhound kennel, for example. If you have a broken leg you don’t call the plumber.
What the inquiry did not address was whether the structure of this or any racing organisation is satisfactory or relevant. The evidence suggests that the concept of an Act of Parliament assigning all management authority to a committee is simply not workable in this day and age, which is why it is never used in commerce and has been largely bypassed in most “grower” style boards (wheat, wool, meat and livestock, etc). The long term decline in racing’s share of the gambling market is proof enough of its failure.
Committees which meet occasionally are, by definition, slow to act and reflect the lowest common denominator view. Rarely do they innovate. Any power they might delegate to staff is variable from place to place and tends only to confuse. It probably depends as much on the personalities as anything else, which is always a risky process.
The proper role of a board is to look after broad policy, the budget and capital expenditure and to hire and fire the CEO. It should not be running the organisation as such. Yet, to take a current example, Greyhounds SA has just announced that “the board” has approved the dismantling of the Follow-On-Lure system at Angle Park. Clearly, that is an ongoing operational matter in which the board has no special expertise. It would be like the BHP board telling its engineers what sort of drill bit to use. The job should be left to the CEO and staff.
Boards often make curious decisions anyway. In NSW, for example, a proposal to shift Tweed Heads greyhounds from NSW to Queensland jurisdiction has “the full support from the board”, GRNSW tells us. Yet although it started off more than a year ago and was highlighted in the 2013 annual report, nothing has been seen in practice. But why would a board take that action in the first place? What would it achieve? It has massive legal, constitutional and contractual implications in both states – measures which could cost millions to process. Nor do we know what the NSW Treasury thinks about the loss of taxes to Queensland, were it to happen. It has all the hallmarks of a financial and operational fiasco.
NSW has also spent over half a million dollars on each of Dapto and Richmond to re-furbish their tracks yet the outcomes were that pre-existing design faults were repeated and interference is still high. Similar problems occurred after constructing expensive new tracks at Gosford and The Gardens. This may be why the Inquiry recommended that GRNSW “develop and implement industry standards for best practice for race track design” (R16). Of course, the difficulty there is that no-one knows what best practice is. It’s a job that has yet to be undertaken. Either way, such an investigation is sensibly a national task requiring lots of money and a spread of technical skills, preferably independent ones. Demonstrably, they do not exist within GRNSW, or any other authority for that matter.
Otherwise, the Inquiry talks about increasing the number of swabs, providing information about drugs, more kennel inspections, re-homing dogs, and so on. However, there is a thread here of some lack of appreciation of how the industry works, to say nothing about how increased activity could be funded in a tight financial environment. For example, information about therapeutic substances and their withholding periods is a matter long since covered by Greyhounds Australasia and published in great detail. To the extent that NSW varies from those “rules” is to weaken and confuse the overall effort, given that hundreds of dogs and trainers cross state borders every day.
Nevertheless, the Inquiry at least got many things out in the open in an industry which has long been too secretive and still largely relies on the “she’ll be right” syndrome. It should happen more often, and it should happen nationally. For one thing, the Productivity Commission report on Problem Gambling got many things badly wrong about the Australian racing industry, not the least of which was its recommendation that racing authorities rely on betting operators paying commission on their profits rather than on turnover. Thankfully, Racing NSW and the High Court managed to get that straightened out, and most of the country is better off as a result.
Even so, in GRNSW’ case it still works on the profit basis, demonstrating that it brings in more cash than a commission on turnover. No doubt, but it is virtually the only racing authority that now does that, which indicates there are very peculiar transactions going on between betting operators and their NSW customers. That may well change over time, if or when the gambler profile continues to shift further in the direction of refugees from the poker machines. In that event, the impact on the industry will be much larger than anything discussed in this Inquiry.
Note: Complaints by many owners and trainers about the poor level of NSW prize money and the better options available in Victoria are both correct and understandable. However, I would be even more sympathetic were it not for all the empty boxes going around at Wenty every week. And Sandown and The Meadows are no better. We are talking about $4,500 to $7,000 per race here – for 5th Graders, or even Novices – but not enough people want to take the chance. Is there a hidden problem?