Last week the Victorian State Government announced that it is going to clobber the pokie machine industry with a 100% tax increase that will bring in an extra $45 million a year. Now usually a yax hike makes people groan, but the clever spin here is that the revenue will be used to help fix waiting lists, staff numbers and services in our cash strapped hospital system.
There are two ways of looking at this, I suppose.
The first is that Victorias gambling companies (Crown, Tabcorp and Tattersalls) are sin companies that are making tidy profits from their heavily protected monopoly or duopoly gaming licences, so they deserve to get slugged. And in any case the new levies will be tax deductible so Canberra will share in the pain. Plus the money is going towards hospitals, and that's gotta be a good thing, right?
Well, I disagree.
At the end of the day, these are real businesses, with real shareholders, real employees and real customers. They won't just sit around and let a doubling of a tax hit the bottom line profits. They will work out how to make more revenue to cover it; ie, they will work out how to get more button pushing zombies into their garish venues, and then work out how to get them to spend more, by cranking up the number of high-denomination poker machines to recoup more money. This of course will ultimately hit problem gamblers even harder. And they are the ones that can least afford it.
But more than that, I don't like the fact that we are have such an unhealthy realiance on gambling to fund our hospital systems. As State Opposition leader Robert Doyle noted, we must be in a pretty desperate situation if the plight of our hospital system is dependant on becoming more reliant on gambling.
What do others think? Is this unique to Australia, or is gambling used to prop up public services in other parts of the world?
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