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Report: Australia Can't Rely on Gambling Taxes

26 November 2004

AUSTRALIA – As reported by the Sydney Morning Herald: "The states have been warned they cannot rely on ever-increasing revenue from gambling taxes, setting the stage for a budgetary crisis as the population ages.

"Unless they are willing to tempt people into new forms of gambling, there will be even more stress on public finances, according to the Productivity Commission. Its analysis suggests other taxes will have to rise or services will have to be slashed.

"…States' revenue from gambling has been rising rapidly for two decades but this will halt with the ageing population and cannot be expected to climb again, according to the commission.

"Contrary to popular perception, young people spend the most on gambling. After the age of 55, people's spending on gambling decreases rapidly.

"…The Productivity Commission's report says 27 per cent of the $4 billion collected in 2002-03 came from the 18-29 age group, while the 60-69s accounted for 10 per cent and those over 70 only 6 per cent. The commission predicts an overall budget shortfall for the state and federal governments of 7 per cent of gross domestic product in 40 years, requiring an average rise in tax rates of 23 per cent to bridge the gap. The most important source of state revenue, the GST, is likely to shrink as a share of the economy because more will be spent on GST-exempt items such as health. And the ageing population will put health finances under growing strain.

"…State governments have come to rely heavily on gambling taxes. Research by CommSec shows average per capita spending on gambling has doubled in the past decade to $15.50 a week…"

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