Image for The massive public subsidy of a private family-owned firm ...

From ‘Team Mulawa’ here: “Greg Farrell Jr, “Mr. Mulawa”: Greg is by nature very hands-on – activity done translates into learning and understanding – and he still applies this essential quality to the horses with ambitious zeal and earnest dedication. Greg is a natural horseman – his innate affection for and confident ease with horses is readily apparent in his daily interaction with the horses at every level. Although Greg’s primary vocational responsibility has always been Managing Director of Federal Group (the highly successful and widely respected Australian owned family business and the world’s second oldest hotel group), he always finds quality time for the horses. He remains integrally involved with all the handling and training of the Mulawa Arabians, from early breaking through the professional turn out of top level show ring performers in hand. (Pictured with ADVENT) “

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Greg Farrell, Federal Group MD

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*Pic: The skilful punter ... David Walsh

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The book ...

First published March 25

I have been involved in the poker machine issue for 19 years in July, but who is counting? I can still remember the air of resignation I felt when I realised that part of my new job as Manager of Social Action and Research at Anglicare was poker machine research and advocacy. Like most people, I didn’t like the pokies and what they did to pubs, but thought of the issue as a slightly conservative one – even perhaps part of the churchy bit of Anglicare.

Well the next two and a half years would teach me a lot. What I learnt was that this issue was quite different from every other social issue I had ever worked or campaigned on.  To give politicians their due, most, in my experience, have been ready to at least listen to concerns about social hardship, and if it doesn’t cost them much, help where they can. The struggle is always to get them to expend political capital, make these issues a priority, generate sufficient will for change and create the context where hard policy choices are made.

I soon discovered that the response to concerns about the pokies were quite different from this. The resistance to what were easy choices was pre-determined, absolute and fixed. Many of you here are veterans of fights against destructive vested interests and their representatives in parliament. But this was my first direct experience of this.

Like many of you here, I could go give scores of examples of what I witnessed in my professional life and later as a concerned private citizen. But I will leave that detail to the book.

The lies told, the cover ups, the secrecy, the massive public subsidy of a private family owned firm that created an unlevel playing field across the hospitality sector; the transfer of hundreds of millions of dollars from some of the most disadvantaged Tasmanians to what became on the back of their Tasmanian poker machine monopoly, one of the richest families in the nation; the ethically indefensible role played by the key industry bodies, especially the Tourism Council and Australian Hotels Association, both heavily funded by Federal Hotels, in upholding a status quo that was against the interests of almost all their members. But all that this is better left to the book.

Suffice to say that despite my many years of involvement, researching Losing Streak was an eye opener for me. It was especially disturbing to find how early the political power of the company became entrenched in Tasmania. I am as far as I know the first historian or writer to see the never released police report into the bribery scandal that saw the downfall of the Bethune Government in 1972 - a government that happened to be committed to ending the casino monopoly enjoyed by Federal Hotels. I hope that Losing Streak encourages some scrutiny of this episode – even 45 years after the event Tasmanians have the right to know about the reasons for the downfall of a democratically elected government.

I also hope that Losing Streak serves as a reminder that poor governance and crony capitalism, special deals for favoured mates, is not only bad for the economy and the environment, it causes serious suffering to real human beings. According to the Government’s own funded research, one in eight Tasmanian families now has an immediate family member directly affected by gambling problem – more than twice what it was before the high intensity and deliberately addictive form of poker machine was licensed in Tasmania.  State government funded research in 2007 found that on average over half of the people in a pokies lounge at any one point in time is a problem gambler. With the ongoing decline in the number of recreational gamblers (the proportion of the population who play the pokies fell 35% between 2008 and 2013), and the industry’s determined attempts to ensure that the remaining players play ever longer, this figure is likely to be even higher now (pokies turnover only fell about 5% during the same time period).

The research done leaves no doubt that problem gamblers are not simply a core business of the modern pokies industry, they are THE core business. The reason that we have ended up with such easily preventable suffering proliferating in our most disadvantaged communities, where the machines have been deliberately concentrated, is on one level straightforward - our members of parliament have consistently put the interests of one company before the views and interests of the people they purport to represent.

I don’t need to tell you that Tasmanian democracy has always been a very frail creature, and that the biggest problem we face in fixing the system, as the Integrity Commission keeps reminding us, is unacknowledged conflicts of interest.

So in the little time I have today I want to tell you why I think winning the pokies fight would not only help create a more compassionate community, but help heal our sick democracy. I admit that there is only a small chance of doing this, but it is real nonetheless.

During 1992-3, when Federal Hotels was leading their successful campaign against poker machines coming into pubs in competition with the casinos, they commissioned research that confirmed how overwhelmingly opposed Tasmanians were to the move. There had been high awareness of the pokies issue since 1968 when a no pokies pledge had been integral to getting the casino referendum through. At this time Tattersalls, who had just won a pokies licence in Victoria, also commissioned research. They found such high levels of opposition to the pokies in Tasmania, significantly higher even than Victoria, that they told the Legislative Council inquiry they were not sure that Tasmanians were ready to have them yet!

An Advocate poll at this time found the same thing – around 85% opposition to the pokies.

And despite all the industry and government spin, all the lies, all the cover-ups, all the soothing reassurances that all is well, these polls have not budged since.

In this context, it is not surprising that Federal Hotels have always recognised that the way to manage this issue was to minimise public debate. As Business Review Weekly has pointed out, protecting the profits of Federal Hotels is all about managing political rather than commercial risk. Their business involves almost no capital expenditure, super profits are guaranteed and predictable, so long as there is no policy change. The company has proved themselves adept at managing political risk. Gunns could have learnt a lot from them.

Federal Hotels has long ensured that contract extension negotiations were done in secret, announced as a fait accompli well out from an election cycle. Once the long contracts were signed and sealed, they could rely on the major parties citing sovereign risk as a reason never to change them, and community organisations understandably felt dispirited about the hope for change.

Thus during the 2002 election campaign, nothing much was said about the pokies because the existing contract ran through to 2008. But in late 2002, with the election out of the way, secret negotiations to extend it began. This was kept secret until the new contract, the one we still live with, was signed early the following year.

Federal sought to do the same thing again in 2015 when they used MONA’s desire for a boutique casino to get another long contract extension well out from the 2018 election.

The Government was all set to announce the new deal when we had an extraordinary blog from David Walsh ( http://tasmaniantimes.com/index.php?/weblog/article/mona-casino-bid-prompts-talks-over-federal-group-monopoly/show_comments ; http://tasmaniantimes.com/index.php/article/the-tasmanian-politician-...-and-the-will-of-mr-farrell- ; http://tasmaniantimes.com/index.php?/weblog/article/mona-casino-bid-prompts-talks-over-federal-group-monopoly/show_comments ), in which he exposed what had occurred up to that point in time, and refused to accept any casino licence that was associated with another pokies contract extension.

What has happened in the 18 months since then is what Federal Hotels has always sought to avoid – public scrutiny and community debate. What is more, this debate, for the first time in Tasmanian history, is occurring before an election, and with the pokies contract due to soon expire.

The government protected the company as far as it politically could in the face of this scrutiny, by guaranteeing that there would be no change in the two biggest pokie barns (those venues which out of habit we still misleadingly call casinos); that all existing pub venues, many of which have been purchased by Federal Hotels with the super profits they made from the pokies licence, will be allowed to keep their pokies; and that there would be no change in the total number of machines. Rest assured though, Mr Gutwein has told us, there will be wide consultation on everything else!

However, in a democracy, what is debated before the 2018 election is not only up to the Treasurer to decide.

Tasmania right now is uniquely placed in Australia to achieve change. It is precisely because we have only one licence holder, and precisely because this one licence holder collects such a high percentage of poker machine losses in Tasmania, that the politics of change are so much simpler. Far less than one per cent of losses goes to the not for profit clubs that are such significant players elsewhere, and less than 10% of total pokie losses goes to pubs not owned by Federal Hotels (with even most of this residue going to a few major chains). Just as importantly, the government tax rate was set so low, and the impact on other forms of gambling was so great, that the total tax take from gambling is only marginally higher in real terms than it was 20 years ago. The last social and economic impact study found that real gambling revenue only increased by $18 million between 1990-1 to 2012-3. This is much less than the savings in the health, prisons, community services and emergency relief budgets that would come from dramatically reducing problem gambling through removing the main cause of it. The end of the pokies would also see $200 million stimulus spend, repeated year in and year out, into the Tasmanian economy, that would be concentrated in disadvantaged regions.

What would that do for small business, employment and public revenues?

It is in fact hard to come up with a reason why we wouldn’t get rid of modern addictive style poker machines in Tasmania. Even the politics are not complicated. The change will be overwhelmingly popular with almost every socio-economic group and demographic from Green to social conservative. This is an issue that can unite us not divide us. Moreover, unlike some of the other complex social problems that beset our society, this is one issue that is totally in the power of the Tasmanian parliament to decide. We can’t blame globalisation for this one.

There is nothing inevitable about the status quo. It is administratively and politically simple in Tasmania to make a policy choice that reflects the will of the people. All the government needs to do is give notice that the contract will not be renewed in 2018. What will then happen is that the pokies will be have to be removed from Tasmania within five years. The reason is this is hard to achieve is not political self-interest but the conflict of interest deeply entrenched in our polity. Changes requires the restoration of a functioning democracy.

We know that people across the western world are losing hope in their democratically elected politicians. MPs are seen, sadly too often with reason, as beholden to vested interests. A good case can be made that this loss of confidence in democracy, is now the single biggest threat to the planet.

If we can’t win on a relatively simple issue like this – when every economic, social and political argument supports the case for reform – what hope is there for our democracy?

As a final comment on this, I think the ALP is critical here if there is to be serious change and not just tinkering. The Greens have a proud record on this issue and can presumably be relied on to stay resolute but need one of the major parties to join them. The Liberals have already caved in. But the ALP is yet to announce its policy and there are good reasons why the party that has been most fastidiously representing Federal Hotels interests for 50 years, and sacrificed the people the Labor movement is meant to represent in doing so, might be open to changing sides.

I know there are many decent Labor MPs, members and supporters who long for the party to make a permanent break with its old corporate mates. What could more symbolise the renewal of the party than making a promise to end the poker machine contract? It seems that Federal Hotels, who no doubt knows the views of politicians on this issue better than I do, also sees this as a real possibility. Why else would they have employed Paul Lennon to be their registered lobbyist? His job is surely not to change the mind of the Government but to keep his party in line. So if you have time for only one action on this issue, I would suggest you follow Federal hotels lead – and let your local Labor member know what you think!

Two more thankyous to finish on. First to the Republic. Employment in hotels the three years after the pokies came into Tasmanian pubs fell by 14% because pokies sucked dollars out of more employment intensive areas of expenditure, namely food and beverages.  But pubs that didn’t have the machines, the majority of them, didn’t collapse. As this pub showcased, the end of the empire was not the end of business, a new future was found. Since the days of the legendary Pete Macdonald, the Republic has been long term supporters of the struggle against the pokies. I raise my glass to them.

And of course my thanks as ever to Chris, Janet and Anika at the Hobart Bookshop. I read recently that last year the sales of e books in the US was overtaken by resurgent hard cover sales. So Pubs AND bookshops are fighting back. Who can doubt that there is hope in the world!

Well that is it for me. You will be relieved to hear that after this book I am going back to only writing about dead people. It’s much less stressful!

But in a final launch exclusive I can reveal that the most interesting chapter in Losing Streak, the final one, hasn’t been finalised yet. Peter Gutwien was commissioned to write a draft but he has done a terrible job. The edits suggested by industry groups look even worse. I suggest that we write the concluding chapter for ourselves, because we are done with being gamed, over being losers. The democratic right to finish this story, and end the long Losing Streak with a win, belongs to us all.

THANKYOU.

*James Boyce is a former Manager of the Social Action and Research Centre at Anglicare Tasmania and a social policy consultant.