don’t blame carbon tax compo: this isn’t a spike, it’s a trend

The article in today’s AFR (also covered here in The Age), “Pokies swallow carbon tax compo”, has certainly caused a furore. The article suggests that the government’s recent carbon tax compensation payments have been largely fed into the nation’s 200,000 poker machines. I have no doubt this is true, to a degree. But there are a couple of massive inaccuracies that must be clarified and corrected.

The claim is based on recent figures from the Queensland Office of Liquor and Gaming Regulation, that show a 7% rise in poker machine spending in May this year and an almost 12% rise in June. This is linked to the clean energy payments, or “carbon tax compo”, that started in May.

Again, I agree that many people would have fed their payments straight into their local pub or club’s poker machines. But don’t for a moment think that this is, as has been suggested, a “spike” in poker machine spending in Queensland.

The reality is even more frightening. Queensland’s poker machine spending has increased EVERY month, on a year-by-year basis, for the past two years. That’s 24 CONSECUTIVE months of increased poker machine expenditure.

This is not a spike in spending… it’s a trend.

I wrote about this very topic back in April (you can read that article here), and included the following graph that shows how Queensland’s poker machine expenditure has been steadily increasing:

Queensland poker machine spending

When we factor in the recent figures, it looks like this:

This reality also makes a liar out of Clubs Australia boss Anthony Ball. In Willingham’s article Ball is quoted as saying:

“While gaming revenue has risen in Queensland, the growth appears to be isolated to that region. This rise in Queensland is no doubt attributable to the state coming off a low base 12 months ago when the floods saw gaming revenues plummet on the back of numerous club closures that took many months to reopen.”

Not so. Gaming revenue didn’t “plummet” 12 months ago… quite the opposite. In fact, poker machine losses in Queensland increased by 5.23% in the 2010/2011 financial year… even more than they did in the 2011/2012 financial year (4.27%).

Ball knows this; it’s his job to know this. Yet once again he denies that poker machine spending is a problem, and uses an utter fabrication to try and prove his point.

Finally, don’t fall into the trap of saying that carbon tax compo payments, or flood relief handouts, or the stimulus package, have failed because people spent them on poker machines. That’s a stupid, ridiculous argument. You don’t pump every cent you have into a poker machine, including extra cash as a result of any of these initiatives, unless you have a problem… and that problem is caused NOT by the extra money, but by the poker machines themselves and the impact they have on so many people.

Want to make sure people don’t blow it all? Then fix the problem at the source… and that problem is poker machines. If either of the reforms that the industry so vehemently opposed (mandatory pre-commitment and $1 bets) had actually been implemented, this wouldn’t be an issue.

All this does is prove yet again how big a problem they are. As if we didn’t already know.

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3 Responses

  1. Libby Mitchell says:

    Great article thanks Tom. The suggested reforms of either pre-commitment or $1 bet limits will not fix the problems alone, in my opinion. We need to look more closely at the regulation of the pokies consumer environment, as well as at the machine itself.

    Drivers are licensed, just as weekend fishermen are licensed. Both of those groups pay a levy, are registered and are provided with effective warning material before they take part in those potentially dangerous albeit recreational activities. It is naive to not view poker machine recreation in the same light.

    It is entirely inappropriate for poker machines to be delivered without any effective limitations, warnings or protective information being supplied to the consumer. Any money collected via levies at that time may help to restore government ability to cover the increased social costs of pokies. It is time for a user-pays system. It is time to make consumers part of the solution.

    Recreation should not spell ‘free for all’. If such measures were introduced we could then introduce a whole range of reforms that might reduce gambling addiction. Until we get real and demand strong reforms the gambling industry will play with us. It is time to control this rabid industry and unless we create new revenue streams via consumer levies, the governments will never cooperate to reduce pokies profits. Consumer levies are the tools whereby governments can buy their freedom from pokies addiction.

  2. Brian says:

    While I’m certainly no fan of pokies, correlation is not causation. There’s simply no evidence to cement the uptick in pokie revenues to carbon pricing compensation.

    Please see http://www.marketeconomics.com.au/2132-some-hokey-pokey-on-pokies

    I’d like to see some data (which almost certainly will not be available) on electricity bills and rent payments which are no longer in arrears, along with sales data from grocery retailers.

    Any pol who damns pensioners for blowing compo largesse on pokies is drawing a hugely long political bow.

  3. Familyman says:

    Carbon tax …humans addicted to poker machines tax …………but Gillard says there is no reason to conclude that the two are linked until an enquiry is conducted. Think i just saw a pink elephant and a pig fly across my screen. Let’s play Gilard says……

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