"Racing is going to change and change for the better"
Speech, National Yearling Sales
Minister of Racing, Rt Hon Winston Peters
Good afternoon. It is a pleasure to be with you to open the 2018 National Yearling Sales.
It is appropriate to start by acknowledging the presence of Sir Peter Vela. The Vela family have been stand-out figures for their serious contribution to the New Zealand Racing industry. And a particular welcome also to the overseas buyers and visitors here today or watching online.
And a word of respect and thanks to the great Sir Patrick Hogan at his last sale as a stud owner.
This is the 92nd edition of the National Yearling sales and as you are aware it is marked by a new sales format. Regardless of the different format, the quality of the horses on offer remains excellent.
Exhibited here are the premier thoroughbreds New Zealand has to offer. This year 1,247 yearlings are up for sale with a good mix of yearlings by up-and-coming stallions, as well as from proven sires.
New Zealand thoroughbreds consistently outperform competitors on the global stage. In six seasons, horses sold at the National Yearling Sales have reached 100 Group 1 wins. In the last four seasons, they have claimed 72 Group 1 titles – 41 per cent more than such horses from our closest competitor across the Tasman.
As you will be aware, the Labour-New Zealand First coalition government has recently been formed and New Zealand First’s racing policies are prominent in the coalition agreement. New Zealand First negotiated hard for the racing industry because we see the value of racing as much more than a social activity, and as a significant industry player for our country. And while we see success stories, such as these yearling sales, we also see serious challenges.
This is a very critical juncture for the industry and the status quo is unacceptable.
Racehorse owners and punters are the lifeblood of this industry and policy should reflect that. There was once a time when an owner could win one country race and the proceeds would look after the horse for a year. Now many owners have to win several races to just cover their costs for one horse annually. At best, the trend for horse ownership and size of the prize money pool, in real terms, is static - at worst it is a self-defeating trend.
We are working on urgent remedial action to incentivise ownership and make the purchase of bloodstock attractive again.
The current rules around tax write-downs do not serve their original purpose of promoting investment.
Twelve years ago, as Minister of Racing and alongside the then Minister of Finance, changes were introduced for an accelerated write-down regime for bloodstock. However, since then various legal interpretations have imposed constraints, disincentives, and poor outcomes. It’s been compounded by politicians who lack a genuine interest or don’t understand the potential of the racing industry.
This government will not sit on its hands. As Racing Minister I’ve entered into discussion with the Minister of Finance and Revenue to address the current tax treatment of bloodstock as a matter of urgency.
It is patently detrimental for the racing industry to have potential bloodstock investors discouraged from buying New Zealand horses. And patently detrimental to the industry achieving its true potential for our country and our economy.
One issue is the point at which a breeding business is considered to be operating. While write-downs are available for owners already conducting a bloodstock breeding business, the purchase of a yearling in itself is not considered sufficient for a breeding business to have commenced. This we seek to change.
As you will be well aware, a series of race abandonments during the 2017 domestic season was again cause for concern within the racing industry. And inclement weather has already had an impact on a number of summer meetings so far this year.
Abandoned races result in millions of dollars lost to the racing industry each year. A further priority for this government is investment in an all-weather race track. This will be subject to this year’s government budget process. The objective is clear. Such a track would be an important step in helping certainty and consistency of racing.
This is the government’s part of the bargain in making sure the industry isn’t stuck in neutral, or reverse. There will be further announcements on racing policy. However, that doesn’t disqualify this industry from examining what innovation, creativity and drive it should be bringing.
For all of you participating in the yearling auctions we wish you well. Buy a horse today. And bid big, for your industry is going to change and change for the better.
On that note, it’s a pleasure to declare the National Yearling Sales here at Karaka in South Auckland open.
(speech delivered Sunday 28th January)