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Economics is often used to scare or bamboozle those of us who aren’t versed in its complexities.
At Anglicare we don’t usually choose to make policy arguments based on economics. We value people, all people, and the quality of their lives and opportunities.
Interestingly, what is being demonstrated globally is that equity, good outcomes for all not just a few, is good economics too. When you prioritise people, the economy does better.
The matter of poker machines in Tasmania is something that Anglicare has campaigned on for decades. We know that these machines are deliberately rigged to win and designed for addiction. They harm people and don’t belong in our communities.
The main counter argument we have faced is that despite the damage caused by poker machines, they are good for business, jobs and the economy.
We are at a cross-roads on this issue in Tasmania, so Anglicare decided it was time to ask, “Is this true?”
Anglicare put this question to a Professor of Economics, John Mangan from the University of Queensland. His report, prepared for the current Parliamentary Inquiry into Future Gaming Markets, looked at the economic implications of removing poker machines from hotels and clubs. The findings are clear:
- Economic modelling shows removal of poker machines from hotels and clubs would lead to increases in both gross state product and employment;
- Expenditure on poker machines does not bring new economic activity to Tasmania, it displaces other activities;
- Gambling is only a small part of the Tasmanian economy, which means the social costs exceed economic benefit;
- The Tasmanian economy is in a period of growth where the expansion of service industries would more than counter any employment loss arising from the change; and.
- The Tasmanian government is not dependent on taxation from poker machines.
Professor Mangan used a model originally developed by accounting firm KPMG but since updated with the most recent data from the Australian Bureau of Statistics and other sources, which taken together best represents the Tasmanian economy.
Three scenarios were modelled to gauge the overall economic impact of removing poker machine from hotels and clubs in Tasmania.
The first one assumed that current spending on poker machines in hotels and clubs would all be diverted to other spending within the Tasmanian economy. The second scenario assumed 20 per cent of current spending would be diverted to the two casinos, and the third scenario assumed a 50 per cent diversion to casinos with the rest to the broader Tasmanian economy.
In each of the three scenarios the modelling showed that removing poker machines from hotels and clubs would provide a positive benefit to the Tasmanian economy.
In the first scenario the model estimated $61 million would be added annually to gross state product and 670 extra full time jobs would be created. Rather than costing jobs, as claimed by the Australian Hotels Association, removing poker machines from hotels and clubs would create jobs for Tasmanians.
In the scenarios where some proportion of the current poker machine spending in hotels and clubs goes to casinos, the modelling still demonstrated an overall economic gain for the broader Tasmanian economy.
Even in the arguably unlikely scenario which models 50 per cent of current spending diverted to casinos, the result was still an increase of $21 million in gross state product and an extra 183 jobs for Tasmanians.
The results come as no surprise to Anglicare, nor probably to the majority of Tasmanians sceptical of industry predictions of widespread woe should poker machines be removed from hotels and clubs.
The modelling contains conservative estimates of the reduced social costs that would result from the poker machines’ removal. It also takes into account loss of government revenue. There is a misapprehension that State governments are dependent on poker machine taxation. This is not true in Tasmania. Poker machine revenue constitutes only one per cent of State revenue. Just over half of this one per cent comes from poker machines in hotels and clubs.
Anglicare, first and foremost, makes the case for change because of the devastating damage caused by poker machines for individuals, families and communities. Getting poker machines out of our suburbs will make a dangerous product less widely accessible. It would be good for the health and well-being of Tasmanians.
While that should be enough for any State Government to make responsible, evidence-based policy, there are powerful industry figures opposing this change.
These vested interests support the status quo, or an equally damaging variation on it. Industry has long argued that their financial interests are in the economic interests of the state. In this report, Professor Mangan has exploded that myth. He has made clear that poker machines do not generate desirable economic activity and do not deserve special deals from the Tasmanian government, or a free pass on the high levels of damage they cause.
Let me spell it out:
Taking poker machines out of hotels and clubs will lead to growth in the economy and more jobs for Tasmanians.
Poker machines don’t attract economic activity from outside the Tasmanian economy, they only take money from it, much of which goes interstate.
Poker machines don’t add to our pool of beneficial skills and knowledge.
Tasmanian tourism and hospitality industries are steaming ahead and in no way need to be propped up by poker machines.
With almost half the poker machine losses coming from those who are addicted and flowing mainly to the sole license holder Federal Hotels and a few groups with multiple venues, it is time to stop pretending poker machines in hotels and clubs provide overall economic benefits. They don’t.
We don’t need pokies. They should be removed from our suburbs as soon as the current license agreement expires. End of argument.