The public inquiry into gambling by the Productivity Commission ordered by Treasurer Peter Costello is bound to turn over a few stones that Mr Costello might prefer left unturned.
Mr Costello has ordered that the inquiry is not to be about the heavy reliance state and territory governments have on gambling for revenue. It is to be about the economic effects of gambling, he says. It will be impossible to separate the issues, even if the Productivity Commission attempts to avoid the tax issue formally.
It has been quite apparent that state governments have been forced to turn to gambling for revenue because of the side effects of economic rationalism. States have had to compete to attract industry so they have given tax holidays to in-coming companies. States have cut taxes on share and other commercial transactions to be competitive. And the economic rationalist demand that user pays for the service, no more and no less, has meant that revenue available from the charges of public utilities has been forgone.
It would be of great value if the commission exposes the details of the links between state taxing problems and gambling. It is easier for a state politician to extract funds via gaming (where the gambler blames bad luck) that via open taxation and charges (where the taxpayer blames the government). Tragically, the greatest burden of gaming taxes rests on those who can least afford them — low-income dreamers.
Aside from giving us better knowledge and understanding about gambling, there is another reason to welcome this inquiry and to welcome the fact that it is to be carried out by the Productivity Commission which under various other names has a long history of putting rationalist views and recommendations. This is because an inquiry into gambling is likely to expose economists to a wider view of the world and motivations of the humans that live in it.
Mr Costello wants the commission to investigate the effect gambling has on other industries, particularly retail, tourism and entertainment. He cited their concerns as a reason for the inquiry. His action comes after a recent estimate by the Tasmanian Gaming Commission that Australians wagered around $80 billion a year on gambling. The Tasmanian study showed Australian gambled almost $80 million dollars in 1996/97 and lost more than $10 billion, meaning Australians waged an average $5,034 and lost $736.
Quite a bit of that $736 went to governments. To use the more colourful language of Mr Costello’s brother the Reverend Tim Costello, a long-time critic of the increasing reliance on gambling by state governments, “”this productivity inquiry will show how much is being diverted from productive retail spending and going into the pockets of the obscenely rich captains of the gaming industry and into government coffers.”
The inquiry will therefore inevitably at least touch on the more fundamental question about economics and the human pursuit of happiness. Is the purchase of endless consumer items at the behest of clever advertising any more or less productive of human happiness than watching horses run or gaming machines tick over.
It is odd, even tragic, that it has taken the concerns of those pursuing an economic goal to prompt the government into action, after years of concern expressed by social and charitable organisations that gambling was getting out of hand, particularly in Victoria.
Though this inquiry is grounded in economics, the more pressing social issues and the compromised morality of governments that promote gambling as a revenue source will not remain subdued.