Chief Minister, Rosemary Follett, did the only sensible thing possible yesterday: order an inquiry into Vitab (under Professor Dennis Pearce). She said she did so to give the Liberals the opportunity to put up or shut up. The issue, however, goes wider than an exercise in political point-scoring. There are wider questions of public administration.
Briefly, the ACTTAB signed a contract with the Vanuatu-based Vitab. ACTTAB provided computer links and access to the super-pool of TAB funds from four states and two territories, about 5 billion a year so that bets taken by Vitab go into the pool and dividends come out of it.
Vitab pays between 1 and 2 per cent of turnover to ACT for this service.
Australian TABs pay back an average 85 per cent of takings to the punter. The smart punters might get a 110 per cent return; the mugs only 60 per cent. The other 15 per cent goes in overheads, taxes and to Australian racing. Vitab, too, gives 85 per cent back in dividends, but does not have to pay Australian taxes or money to Australian racing, so it has at least 10 per cent to play with. The question is whether any of that can be used (via brown paper bags, commissions or whatever) to induce big Australian punters (through Asian agents) to bet with Vitab rather than an Australian TAB, to the cost of the Australian taxpayer and racing industry.
The hypothetical grimmest picture is that some big Australian punters set up Vitab with the aim of doing a deal with the ACTTAB as an easy way to get access to the very large Australian TAB pools. That they did this so they could bet with a TAB that did not cream off 15 per cent of turnover, and that they did it in Vanuatu which is a tax haven. The hypothetical smart punters’ 110 per cent on an Australian TAB would become, say, 115 to 120 per cent on Vitab, and largely tax free.
The Victorian TAB certainly saw that at least as a hypothetical danger and gave notice that it would cut off the ACT TAB’s access to the super pool. So the ACT has gone from a satisfactory super-pool arrangement with Victoria, to real risk of being on our own or having to do a less advantageous deal with NSW because of the TABs escapade with Vitab.
The best picture is that the Victorian TAB acted capriciously when there were foolproof procedures in place to stop Australian money going through Vitab.
It is as well there is an inquiry. The question is not whether there were actual inducements paid to Australian punters: that will be impossible to prove either way because betting through an Asian agent into a South Pacific tax haven is of its nature a secretive thing. The questions are whether the ACTTAB and its responsible Minister, Wayne Berry, should have seen the danger, liaised with other TABs to avert it, thoroughly vetted the Vitab proponents and their proposal, and taken steps to protect the ACT’s access to the super-pool.
If they did not, then Mr Berry, who decorporatised the TAB bringing it back to greater ministerial control, is in trouble.