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Thread: Proposed Stallion Levy to Fund $2m Additional Prizemoney

  1. #1
    Junior Member Foal figures will become famous soon enough
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    Exclamation Proposed Stallion Levy to Fund $2m Additional Prizemoney

    A classic year 12 economics question - how can taxes affect price elasticity i.e. supply and demand

    But with tax revenue its not about how you collect it but how you spend it !


    Australian breeders are set to benefit with a prizemoney injection of more than $2m into new racing opportunities for Australian bred horses which will lift the industry to new heights.

    The Harness Racing Australia (HRA) Executive is proposing the immediate introduction of a new Stallion Levy which will raise the critical funds to promote, improve and support the harness racing industry.

    Invoiced to Stallion owners following a 42-day positive test result, the 15 per cent levy on the advertised Service Fee of Shuttle and Internationally Domiciled Stallions (transported and frozen semen) is anticipated to raise in excess of $2mil annually. In practice, the levy will therefore be applied to the connections of Stallions who are serving mares not just in Australia, but across multiple jurisdictions and/or both hemispheres in any given year.

    While there is the potential for some Stallion Owners to simply pass this cost on to Australian breeders, this would be extremely disappointing and naďve given the competitive nature of the Australian breeding industry, the multitude of opportunities available to these Owners globally, and the long-term support afforded these Stallion owners and Farms over an extended period.

    HRA would be responsible for the invoicing, collection and distribution of the levy.

    The HRA Executive has identified a number of propositions with regards to how best and most equitably distribute these funds in a manner which promotes and improves the sport. These propositions have so far included:

    The introduction of an Inter Dominion “home grown” bonus, which is paid on top of existing prizemoney to the highest placed Australian bred horses in the Championship Finals;
    Establishment of high profile, highly marketable and high prizemoney events for Australian bred horses which could include a $1m Australian Pacing Cup and $300k Australian Trotting Cup, plus Australian Oaks and Derby’s for each gait;
    The introduction of Signature Events such as Pacing and Trotting “Slot Races” for Australian bred horses, where connections buy a place in the race to compete for high prizemoney (eg. The Everest). Some of these funds could be used to subsidise the “slots” on, for example, a dollar-for-dollar basis to ensure lucrative and attractive prizemoney; and or
    A distribution model similar to the Clearance Fee which is returned to the State of Origin (where the mare resides), whereby additional feature races to support Australian bred Fillies and Mares.
    This paper does not represent the full, final, or agreed proposals – it is intended to provide a basis for discussion with stakeholders including Stallion Owners, Stud Masters, Breeders and the wider industry.

    Subsequently, HRA Executive have agreed to consult on these for a period of six-weeks, inviting written submissions from stakeholders, including for alternative proposals as to how best utilise the $2m+ funds generated by the levy, up until the close of business on 31 May 2021.

    Once consultation has closed, the HRA Executive will review all feedback, refine the proposals and advise of the way forward.

    If you would like more information, please contact HRA Chief Executive, Andrew Kelly on +61 3 9227 3000 or hra@hra.com.au.


    http://www.harness.org.au/media-room...?news_id=47810
    Last edited by Messenger; 04-18-2021 at 01:20 PM. Reason: link

  2. #2
    Super Moderator Stallion Messenger will become famous soon enough Messenger's Avatar
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    The NZ reaction

    If Harness Racing Australia expects any business to take a 15% hit on their margins and not pass it on to the customers, they are beyond dreaming.

    The cost will be worn by breeders, plain and simple.

    It was put to me that breeders will as a consequence be incentivised to support the colonial stallions. That is wishful thinking, and it is far more likely that many commercial breeders will simply breed less of their mares.


    http://www.harnesslink.com/Australia...A-Andrew-Kelly
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  3. #3
    Senior Member Horse Of The Year Showgrounds will become famous soon enough
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    HRA does not consult with stakeholders it is supposed to represent. Look no further than the ludicrous decision to align the racing season withe the calendar year, with no change to the breeding season. That hand grenade could only assist connections of NZ trained 2 and 3 year olds, eg, a colt could win the NZ Sires Stakes final on NZ Cup day then come and compete in 2yo races in Australia.

    I strongly question the legality of the proposal given the existence of free trade agreements and competition laws. And when was HRA authorised by the Commonwealth Government or Treasury to raise taxes or impose levies? The Government can't do this without legislating it, how can HRA be so ignorant to even propose this?

    I hope the entire industry, world wide, makes submissions condemning this folly. Heads should also roll freely and grown-ups put in charge of HRA.

  4. #4
    Super Moderator Stallion Messenger will become famous soon enough Messenger's Avatar
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    “Even this year if we brought him down we probably would have broke even but then apply this TAX, it just doesn’t make it worth while.

    “Through Volstead we sponsored the Redwood Classic for the past two years and now that won’t be happening.

    “These are some of the flow on affects of this new tax/levy/financial imposter that have not been thought about.”

    Following such positive results from the recent Nutrien Standardbred Yearling Sale in Victoria plus the latest news that breeding numbers were up 10.3 per cent nationally for the first time in more than a decade, Driscoll believes this Stallion TAX is a backwards step.

    “It is easily the worst decision I’ve seen in the years since I’ve been involved,” stated Driscoll. “There is no other place in the world that there is a tax/levy/financial imposter that subsides racing.


    http://www.harnesslink.com/Australia...-Levy-casualty

    The following is a link to the open letter that 11 studs have written in response to the Levy:

    http://www.harnesslink.com/Australia...NG-us-to-death
    Last edited by Messenger; 05-12-2021 at 11:43 AM.
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  5. #5
    Super Moderator Stallion Messenger will become famous soon enough Messenger's Avatar
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    http://www.harnesslink.com/Australia...ion-TAX-victim

    If it was really the proposed tax that convinced Shane Murphy not to stand Dancin Lou, then it might prove a good thing as Woodlands virtually gave away dozens of Sweet Lou's at the recent Karaka Weanling Sale

    https://www.nzbstandardbred.co.nz/sales/21nsws/129
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  6. #6
    Senior Member Horse Of The Year Showgrounds will become famous soon enough
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    Quote Originally Posted by Messenger View Post
    http://www.harnesslink.com/Australia...ion-TAX-victim

    If it was really the proposed tax that convinced Shane Murphy not to stand Dancin Lou, then it might prove a good thing as Woodlands virtually gave away dozens of Sweet Lou's at the recent Karaka Weanling Sale

    https://www.nzbstandardbred.co.nz/sales/21nsws/129
    The point you make about Sweet Lou emphasizes the fact these were stud services, not services paid by breeders. Try taxing 15% of nothing!

    The real issue here is the conduct and purpose of HRA. Its role in raising money to fund the industry should not involve milking industry participants to the grave. It has become a rogue body representative of the interests of a few individuals not the broader industry. The entire board and executive should stand down and replaced with persons knowledgeable in Harness Racing (yes, I am looking at you George Fiacchi and co.) rather than real estate developments. I'm mindful of Globe Derby Park and Albion Park here.

    Paul Keating's comments about The Senate ring true here. "Unrepresentative swill!"

  7. #7
    Super Moderator Stallion Messenger will become famous soon enough Messenger's Avatar
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    The Executive has determined that a Stallion Levy in the form recently proposed will not be introduced this year.

    http://www.harness.org.au/media-room...?news_id=48460
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