People doing such jobs are usually classed as “sound”, to use a term favoured by Sir Humphrey Appleby of Yes Minister* fame. Governments and Ministers do not like surprises.
Those jobs in NSW and Queensland are being carried out now by small teams of legal people – judges, barristers and policemen – looking into the live baiting and related scandals. So far, so good.
Yet the briefs to the reviewers actually go further than that. The Queensland review, for example, has to look into “maintaining a social license with the community” and “promoting integrity and public confidence” in the industry.
NSW goes even further and asks the team to “develop and improved model of governance for the industry.” Victoria has not established a separate team but its ongoing tribunals are tasked in much the same way.
These are very big challenges, yet all the teams are essentially legalistic in nature, staffed by people who are no doubt very good at their day jobs (past or present), but completely lacking in hands-on experience in running a commercial enterprise, or in the racing industry.
Having established and proved out the “facts”, the teams are then required to translate those findings into meaningful ways of structuring and managing the industry.
Are they qualified to do that? At face value, hardly. All these team members have spent their careers interpreting and arguing the toss about rules that someone else has set up – often to the extent of debating the meaning of a word or a phrase.
They are not charged with achieving the success of the industry involved. That is someone else’s problem.
The original purpose of the law does have some relevance but only to the extent that it is reflected in the detail of those same phrases. Even then, that is still a contentious area – as illustrated by the fact that the High Court, with the nation’s best legal brains, frequently comes out with a 4:3 majority decision. In lower courts, many decisions are reversed on appeal. Hardly definitive, is it?
How, then, will it be possible for the reviews to come up with better ways of structuring an industry about which they know relatively little – not in any direct sense. Particularly so when none have any experience in operating businesses.
By default, as usually happens, the respective Ministers will be able to select those bits they like from the reports and do what they were going to do in the first place.
Even then, neither the NSW or Queensland Ministers come from a commercial background (one is Army, the other Police) so how can we expect them to develop concepts which best advantage the industry in the long term? Their political affiliations may or may not help in that task, but will tend to confuse the issues anyway.
Bear in mind some of the history of reviews and inquiries in racing.
- A review of the use of betting exchanges by a task force of all state senior public servants found that they would constitute a clear and present danger to racing integrity (with NT opposed). They were WRONG, and ignored UK evidence to the contrary.
- The former Australian Jockey Club (now ATC) and its consultant, Access Economics, predicted a huge loss of income and the failure of Australian racing were betting exchanges to be licensed. Completely WRONG.
- NSW greyhounds Chairman, Percy Allen, warned participants in a speech at the Greyhound Social Club to boycott Betfair and online bookmakers. He was WRONG. NSW now welcomes income from these sources.
- The then-chairman of Queensland Racing, the boss of UNiTAB (now (UTAB) and the chairman of QGRA (now part of Racing Queensland) strongly opposed the arrival of Betfair. UNiTAB threatened to start up its own exchange if Betfair were ever licensed. It never did. They were all WRONG.
- The last review of NSW greyhound and harness racing (by a barrister) called for the amalgamation of greyhound and harness stewards, something the government accepted. They were all WRONG. The change proved much less efficient and much more costly and was later reversed.
- Racing Victoria chose to charge online bookmakers a percentage of their profits. A leading management consultant employed by RV supported that approach. They were both WRONG. RV and others are now much better off with a share of turnover.
- The ACT government, and its Competition unit, ruled in favour of charging online bookmakers a fee based on profits rather than turnover. WRONG again.
- Consultants employed by NT bookmakers “proved” to the Productivity Commission that they would face a fate worse than death if they could not pay fees based on profits. WRONG – at least from the industry’s viewpoint. The online bookmaker group has grown substantially in numbers and turnover since that time, even though it mostly pays fees on turnover.
- The Productivity Commission agreed with the above submissions from NT bookmakers that charging fees on profits would be the best way to go. WRONG. The industry is much better off with fees based on turnover.
- The Productivity Commission favoured the NT bookmakers position because it was the most “efficient” (ie lowest cost), but failed to consider the impact on the industry as a whole. It was WRONG. The PC incorrectly regarded wagering as an industry in itself when it is no more than one of many services provided to the racing industry.
- The WA Racing Minster outlawed use of a betting exchange only to be shot down by the High Court. The Minister and his advisors were all WRONG.
In fact, over the last decade, the only significant, correct decisions were those made by Racing NSW to charge fees on turnover (validated by the High Court), by NT to license online bookmakers and therefore invigorate a moribund wagering sector, and Tasmania to license Betfair, which punters were using anyway.
All these measures were strongly opposed by other governments and the remainder of the industry, who were all WRONG.
In total, governments, the racing industry and its advisors have proved remarkably incompetent at reaching decisions which stand the test of the law, and of financial benefit. They all have a common thread, which is to ignore consumer preferences.
The current reviews, which start public hearings shortly, may well produce some good answers. Whether they will be enough is doubtful.
*For those interested, here is a BBC transcript of the relevant bits of Sir Humphrey’s advice to Minister Hacker.
“Responding to a report with unwelcome findings: the ‘Yes Minister’ method.
Sir Humphrey: Of course. You simply discredit them. … You point out that the research could be used to put unwelcome pressure on the government because it could be misinterpreted. … You say it would be better to wait for a wider and more detailed study over a longer timescale. … Now in Stage Two you go on to discredit the evidence … You say it leaves some important questions unanswered, that much of the evidence is inconclusive, that the figures are open to other interpretations, that certain findings are contradictory, and that some of the main conclusions have been questioned. …
Minister Hacker: But to make accusations of this sort – you’d have to go through it with a fine toothcomb.
Sir Humphrey: No, no, no. You can say all these things without reading it. There’s always some questions unanswered.
Minister Hacker: Such as?
Sir Humphrey: Well, the ones that weren’t asked. [Beams]
Minister Hacker: And that’s Stage Two?
Sir Humphrey: Yes. Now in Stage Three you undermine recommendations. “Not really a basis for long term decisions, not sufficient information to base a valid assessment, not really a need for a fundamental rethink of existing policy, broadly speaking it endorses current practice” – all that sort of thing.
Minister Hacker: And that always does the trick?
Sir Humphrey: Nearly always.
Minister Hacker: Suppose it doesn’t?
Sir Humphrey: Then you move on to Stage Four… Now, in Stage Four, you discredit the man who produced the report. Off the record, of course. You say that he is harbouring a grudge against the government or that he’s a publicity-seeker or, better still, that he used to be a consultant to a multi-national company.
Minister Hacker: Supposing he wasn’t?
Sir Humphrey: Then he’s hoping to be. Everyone is hoping to be a consultant to a multi-national. Or he’s trying for a knighthood, or a Chair, or a Vice-Chancellorship..Really, Minister, there are endless possibilities”.
Source: Excerpt from the BBC satirical series, ‘Yes, Minister’ episode entitled ‘The Greasy Pole’.