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Australian Clubs Protest Tax Rise

25 June 2003

AUSTRALIA – As reported by the Sydney Morning Herald: “Clubs are warning the State Government of an angry campaign against proposed poker machine tax rises announced in the state budget, warning that one in five clubs would go broke within five years.

“Many clubs, already struggling because of increased insurance costs and reduced gaming revenues, would cut funding to charities, said Clubs NSW. Others would aggressively increase the gambling dollar, increasing potential harm.

“…The Government announced an increase in taxes on poker machine revenue over the next seven years to a maximum of 40 per cent for clubs and 50 per cent for hotels.

“Pubs and other gaming interests are prominent donors to the Labor Party and clubs often have close links to local MPs. Before the March election, the Government said it would not increase gambling taxes if this was avoidable.

“…Club auditors had estimated 300 clubs would not survive the tax rises, said Clubs NSW chief executive David Costello. The top 63 clubs with gaming profits of over $10 million (US$6.7 million) faced increases of 133 per cent, he said. Less than one-third of the state's top clubs would remain profitable and the 400 poorest clubs would no longer get a GST rebate from the State Government, he said.

“…Last year clubs donated $55 million to charities - receiving tax concessions for $33 million - and gave an extra $50 million in kind.

“…The unexpected tax rise would cut into the club's budget for donations to community groups like Stewart House, the Spastic Centre and Hope for the Children, an intervention program that supports new mothers…”

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