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| Madam Speaker, I move that the bill now be read a second time. The purpose of this bill is to amend the Gaming Machine Act and the Gaming Machine Regulations. It is the first in a series of staged amendments for the reform of the community gaming machine sector. This bill sets a cap on the total number of community gaming machines in the Northern Territory. It also revises the taxation arrangements that apply to clubs and hotels in relation to community gaming machines. Further reforms of the community gaming machine sector will see the introduction of a regulated trading scheme for licences within the capped pool of machines. These reforms will ensure fairness to licensees and restore the balance back to the community. On 18 July 2008, I announced that there would be a cap of 1190 gaming machines in the Northern Territory. This bill gives legislative affect to that announcement. The government has chosen to set a cap on the number of gaming machines, as the number of machines has more than doubled since 1996 when the machines were introduced into the Northern Territory. In the 10-year period between 1998 and 2008, the number of gaming machines in hotels has almost tripled. Hotels on Mitchell Street, in the middle of Darwin, experienced a significant part of that growth. Meanwhile, there is growing concern in the community about the impact of community gaming machines on individuals and on society as a whole. Community service providers such as Amity, which deal with people suffering the consequences of gambling problems, have also expressed concern about the increase in machine numbers in hotels and clubs. These community service providers have consistently pointed out the burden that problem gambling imposes on individuals and their families. Problem gambling is also tied to a variety of social problems including domestic violence, child neglect and drug and alcohol abuse. Over the years, the media has picked up and recorded many instances of individual difficulty. These are real problems that government is addressing through greater regulatory management. The government has sought to offset the impact of gaming machines on the community through the Community Benefit Fund, which provides that a percentage of machine profits be redirected from hotel licensees with gaming machine licences back into the community. However, it is clear that this kind of management is not enough. All other jurisdictions in Australia have sought to manage gaming machines through setting caps on the number of machines and introducing trading schemes whereby interested licensees can trade machines in a regulated environment. This has proved successful in managing gaming. The system provides certainty for the community that there will be no increase in overall gaming machine numbers on licensed premises, while still allowing business to operate and trade their machines for legitimate profit. There is potential for a concerning increasing in the number of gaming machines in the Northern Territory if nothing is done. Currently, the Gaming Machine Act allows clubs and hotels to apply for a maximum number of machines within each particular category. If all the clubs and hotels decided to apply for their eligible maximum number of machines, we could see a further 1000 machines to be made available in the Northern Territory. Whilst the Licensing Commission is required to consider the merit of the application against the set of criteria, including a community impact assessment, this process means that not all applications for further machines or for gaming machine licenses would necessarily be successful. Without some mechanism to manage the numbers of community gaming machines, we could end up with significantly more machines in the Northern Territory and a concerning increase in harm. This government has sought to respond to the growing concern about the current scheme by implementing a cap on the number of gaming machines. As I announced, that number is 1190 machines, being the number of machines currently within the community. At this stage, there are no current applications formally lodged with the Director of Licensing. The bill, which includes the amendments to the regulations, provides for the cap to take effect from 18 July 2008, being the date government announced a cap on gaming machine numbers. In addition to the amendments already discussed, this bill provides that regulations can be made to cap the total number of gaming machines in particular parts of the Territory, and to impose any restriction, or combination of restrictions, on gaming machine numbers. At this stage, there are no regulations arising from these provisions. The amendments simply provide a tool by which the Licensing Commission can manage the trading scheme intended to be introduced in the future. Government will conduct extensive negotiations with all stakeholders before bringing in any further amendments. Importantly, the bill also makes provision for the Licensing Commission to reject, without further enquiry, any application for either a gaming machine licence, or for an increase in the number of gaming machines authorised for use under a gaming machine licence if it would result in the cap of 1190 machines being breached. This power does not currently exist in the Gaming Machine Act, and will enable the Licensing Commission to lawfully maintain the cap of 1190 machines. This bill also revises the taxation rates that apply to clubs and hotels in relation to gaming machine revenue. Clubs and hotels will no longer have separate taxation rates that apply to each type of premises, and will now both be subject to uniform rates. The rates have been revised so that clubs and hotels will be subject to a tiered gaming machine tax rate, depending on each venue’s gross monthly profit. The lowest rate of 12.91% will apply to gross monthly profits of up to $10 000; with the rate rising to 22.91% for profits from $10 001 up to $100 000; 32.91% for profits between %100 001 and $200 000; and peaking at 42.91% for venues with profits over $200 000. While there will be an initial loss in revenue to the government from the new taxation regime, this could be partly offset in time with the introduction of the new trading scheme. The details for the trading of machines have not yet been finalised, but will be following consultation with the industry and will include appropriate taxation and levies on trading entities that trade their gaming machines. This will ensure that the profits from the gaming machine sector will continue to be put to a good use across the Territory. Madam Speaker, I commend the bill to honourable members and table a copy of the explanatory statement. Debate adjourned. |