Senate debates

Thursday, 5 December 2013


Poker Machine Harm Reduction ($1 Bets and Other Measures) Bill 2012 [2013]; Second Reading

9:31 am

Photo of Nick XenophonNick Xenophon (SA, Independent) Share this | | Hansard source

It is very timely to debate the Poker Machine Harm Reduction ($1 Bets and Other Measures) Bill 2012 [2013] today, a bill that I and my colleagues Senator Di Natale and Senator Madigan introduced, because the issues at the heart of this bill will not go away, despite the attempts of the former government to sideline this issue and despite the attempts of the current government to bury this issue. They will not go away for reasons that will become apparent. There are literally many hundreds of thousands of Australians in this country today who are suffering because of addiction to poker machines.

Given that the government have begun the process of dismantling the national gambling regulator and repealing the previous government's reforms, this bill is particularly timely. Let me make this quite clear: when the former government's legislation on gambling reform was put up, I did not support the then government's legislation because I did not believe it went far enough. Also, I did not want to be seen to be sanctioning a fundamental broken promise on their part, because the Gillard government actually reneged, in a deeply cynical way, on the written agreement that it had struck with Andrew Wilkie, the member for Denison. I did not want to be party to that very cynical manoeuvring on the part of the former government. I must emphasise that Mr Wilkie, the member for Denison, acted in good faith.

The current government have made it quite clear that there is no chance of a better scheme or any other scheme at all being put in place. They want to dismantle the minimalist gambling reforms. Under those circumstances, I do not want to be party to making a situation much worse but also endorsing what the current government are planning to do and that is to move away from the concept of federal regulation of the gambling industry. The last best hope to deal with this industry, to deal with the damage caused by poker machines, is through a national approach. There is no doubt that, under the Constitution, there is power to deal with these issues in a way that is effective—using the corporations power, taxation power and banking and telecommunications powers. That is the best way of doing it.

The fight for gambling reform has been long and hard and this government's most recent moves indicate that the battle is far from over. The 2010 Productivity Commission report into problem gambling highlighted in harsh detail how much damage it causes to our community and how attempts at state based regulation had failed. I do not understand why this government cannot see that the states, who are happy to milk the pokies cash cow to fill their coffers, simply cannot be left in charge of regulation. It is truly a case of Dracula minding the blood bank and it is ordinary Australians who are getting sucked dry. Gambling losses have gone from over $7 billion to $19 billion over a couple of decades, well outstripping the rate of inflation, with poker machines devouring about $13 billion of that. The No. 1 jackpot junkies in Australia are the state governments, who reap over $5 billion a year in gambling taxes year in, year out.

About 250,000 adults in Australia are estimated to have experienced significant harms from gambling in the last 12 months. Based on the available evidence, the Productivity Commission has found that there are between 80,000 and 160,000 Australian adults suffering significant problems from their gambling, with a further 230,000 to 350,000 experiencing moderate risks that make them vulnerable to a full-blown gambling addiction. In other words, there is a significant cohort of people who, if they have not been hooked on poker machines, are well on the way to going down that path. We are dealing with a dangerous product. Let us put this in perspective. It is not some moralistic argument; it is about people being harmed. It is about consumer protection and the ethics of state governments drawing so much of their money from harm from gambling addiction.

Up to 85 per cent of Australians who have a gambling problem have a problem because of poker machines. For each one of these problem gamblers, on average, another seven people are affected—family, friends and work mates. Problem gamblers account for about a third of overall gambling expenditure in Australia—that is, in the billions of dollars. We are talking about $5 billion coming from problem gamblers, with over 40 per cent of poker machine losses coming from problem gamblers. In other words, about $5 billion a year spent on poker machines comes from people who are hooked on poker machines. Those problem gamblers are more likely to gamble on poker machines than gamble by any other form, although a swing towards online sports betting is emerging.

Last year I was very happy to do a press conference with the then opposition leader Tony Abbott, now Prime Minister, in relation to online gambling. I sincerely welcome Mr Abbott's commitment to tackling online gambling and the impact it can have on individuals, particularly younger people in our community. So the laudable intentions of the coalition in relation to online gambling expressed last year represent a real contrast with what the government is now planning to do on poker machine addiction.

Poker machine addiction leads to higher crime levels and suicide. The access to and intensity of machines makes them more addictive than other forms of gambling and lives are torn apart across the country every day because of gambling addiction. Senators Di Natale and Madigan would well know of the research undertaken out of Victoria, and you have some outstanding researchers there, such as Dr Charles Livingstone, who have pointed to the links between the level of crime and problem gambling. Studies have been done by agencies in Victoria and staggering statistics have emerged, such as that something like one in five people presenting to hospital emergency departments after attempting suicide were there because of gambling addiction. These are staggering figures.

The Productivity Commission conducted two inquiries into gambling: the first in 1999 and the second in 2010. The 1999 report concluded that the states should improve their regulation dramatically to address problem gambling. It was in that 1999 report where we saw for the first time how bad the problem was. It was spelt out in a way that was irrefutable. It was an incredibly thorough report, as was the 2010 report. For the first time we had a body of evidence—the gold standard of research that showed how serious a problem it was. We are the No. 1 problem gamblers in the world for per capita gambling losses. The 2010 report found the states had not followed through and that the problem had continued to rise. It is proof that the states cannot be trusted to regulate these dangerous products. I implore this government to consider the evidence before it and to make the effort to understand the huge impact poker machines have on our community.

This is not an ideological issue. This is not about the left of politics and the right of politics; there is a broad cross-section of individuals who are concerned about this. This defies any ideology. This is about giving a damn about your community and about individuals who are hurt by gambling addiction. The previous government was scared off reform by the vested interests of the poker machine lobby. I fear that this government has fallen prey to the same scare tactics.

Senator Di Natale interjecting

Senator Di Natale says they are worse and no doubt he can expand on that. I cannot understand how the government can expect the states to regulate effectively when they have no history of doing so.

The aim of this bill is to implement one of the key findings of the 2010 Productivity Commission report to create meaningful, effective poker machine reform. Currently, gamblers can lose up to $1,200 an hour when poker machines are played at their maximum intensity. The commission recommended that maximum bets be reduced to $1 per spin, which would reduce the maximum hourly losses to something like $120 per hour—still a significant amount but also a significant reduction in what is possible now. This step is in line with the commission's findings that problem gamblers are far more likely to be the ones playing machines at their maximum rates than recreational gamblers. In fact, the research shows that something like 88 per cent of recreational gamblers and 80 per cent of gamblers overall do not bet more than $1 per spin anyway. Where is the inconvenience to the recreational gambler with such a sensible, considered reform as set out by the Productivity Commission? This measure will not impact recreational gamblers but instead will help problem gamblers to reduce their spending and allow for earlier intervention.

At the end of last year, the then outgoing Chairman of the Productivity Commission, Gary Banks, who was involved in both gambling inquiries, reiterated the commission's views on $1 bets as stated at the dangerous consumptions forum at Deakin University on 29 May last year. He made it clear that $1 bets satisfied 'good public policy' because it 'predominantly targeted the problem gamblers without having too much collateral effect on the average recreational gambler'. Further, Mr Banks said it should be implemented without a trial. I repeat that: it should be implemented without a trial. In other words, this is something we need to do now. There should be no more excuses from either the coalition or the opposition in relation to this.

I note that the previous government dismissed the idea of $1 bets due to the cost of implementation. At the time, then Minister Macklin stated it would be in the order of $1.5 billion. I remember quite clearly the work that Senator Di Natale did in questioning that. He can elaborate on this, but the information that Senator Di Natale got was basically back-of-the-envelope stuff—a grotty, torn envelope—because none of the figures seemed to make any sense. The previous government accepted whatever the industry said. How objective or evidence based is it for a piece of important public policy when you just take what the vested interests of the industry tell you?

The then government never admitted where the figures came from. They refused to release their modelling or any further information, although documents I requested under FOI indicated that this figure likely came from the industry. Interestingly, not long after then Minister Macklin made this announcement Victoria reduced its maximum bet limit from $10 to $5, without spending billions of dollars.

I hope he does not mind me saying this, but I spoke with my good friend and fellow campaigner on this issue, the Reverend Tim Costello, just last night. His fear is that states, now emboldened by what this government is doing, are now actually rolling back reforms and, as I understand it, Queensland is looking at a return to $10 maximum bets from $5 maximum bets. That is the consequence of the federal government's measures.

The real cost of implementation would be less than $350 million over a number of years, which pales into insignificance when you consider the Productivity Commission's estimates of the cost of problem gambling. I think that Senators Di Natale and Madigan would agree that it is a pretty minimal figure. This bill also contains provisions to limit the amount of jackpots to $500 and the amount of money that can be loaded onto a machine at any one time to $20. These measures are also in line with Productivity Commission recommendations. The reason poker machines are so addictive is the volatility. It is because of that random reinforcement. If you make the machines less volatile they are less addictive, and having a smaller jackpot is crucial to that. When you consider that the fruit machines in the United Kingdom have much lower jackpots than $500, this is not an unreasonable course to take.

The bill also provides for regulations to be made relating to machine spin rates. This will allow governments to further reduce the intensity of machines by slowing the rate of play. This measure is particularly important, given that Australia has some of the highest intensity machines in the world. The commission also pointed out that intensity is a significant contributor to addiction. I also note that this bill was originally introduced in 2012, and as such the commencement provisions need to be amended if the bill is to progress.

The reforms contained in this bill are a better alternative to the ones that are currently in place. Voluntary precommitment, central to the previous government's reforms, is simply not as effective as the measures in this bill. Problem gambling is an addiction. It is not as simple as a matter of choice or willpower. It is also incredibly offensive to suggest that problem gamblers could stop if they wanted to or that it is about choice. I cannot think of anyone who would choose to lose everything they have or who would not want to stop if they could. Just a few days ago I saw—and I will be very careful not to identify this family—the children of a woman who took her life recently in the most horrible of circumstances because of her gambling addiction. That family deserves answers. That family and every other family who is at risk of problem gambling deserve a real solution—and a real solution is contained in this bill.

People who suffer from poker machine addiction, or those at risk of suffering from it, need to have meaningful and effective measures in place to help them control their gambling. In the most basic sense, the problem with voluntary precommitment is that, no matter how many loss limits a gambler sets or how much the system restricts their activity, there is nothing to stop them pulling their precommitment card out of the machine and continuing to play outside the system. It might, theoretically, help some gamblers—but not the ones who really need the help. However, I believe that having voluntary precommitment in place is at least a sign that more needs to be done and symbolic of the need for federal regulation. But it will not help the majority.

Three years ago a study into precommitment that was prepared for the Nova Scotia Gaming Foundation in Canada reported that voluntary schemes consistently and miserably failed because they relied on the willpower of players—that is, players had to have the willpower not to keep playing outside the system when they reached their limit. Further, the study found that high-risk players were less likely to take up precommitment options and would continue to play unless they were locked out of the system completely when they reached their limit.

I know some people are arguing that we should not be forcing people to set limits and then shutting them out of what is ostensibly meant to be a form of entertainment. So I ask: in what other form of so-called entertainment can you lose $1,200 an hour? Rather, this so-called entertainment has been one of the biggest drivers of crime apart from illicit drug use, a significant cause of suicide, a significant cause of family breakdown and a significant cause of depression and other mental illnesses.

We need to make machines less addictive. We need to implement the provisions of this bill. And that is what this bill intends to do—a bill supported by my colleagues Senator Di Natale and Senator Madigan. We all come from different political perspectives, but we all understand the need for real action on this, because the community has been let down by the major parties in relation to this. We need also to consider the study commissioned by the Victorian Department of Justice in 2009, which found that more than 12,000 Victorians contemplate suicide every year because of their poker machine addiction. The study also found that 6,000 Victorians contemplate breaking the law because of their addiction. Translate that figure across the country and you are talking about tens of thousands of Australians who are either contemplating suicide or contemplating breaking the law.

There is an enormous amount of evidence about the harm these machines cause. This is a dangerous product. Another six-month study at a major Victorian hospital found that one in five suicidal patients was a problem gambler. I will not quote all the evidence; there is too much, both from Australia and from overseas. This issue has been a political football for too long, and the ones who are getting kicked around are the most vulnerable in our society. I note that this is an issue that Senator Di Natale and his party will not give up on and that Senator Madigan and his party will not give up on. We cannot give up, because the cost is too high for too many people. This is the beginning of a new battle, and it is one we cannot afford to lose.

9:48 am

Photo of John WilliamsJohn Williams (NSW, National Party) Share this | | Hansard source

I rise to speak on the Poker Machine Harm Reduction ($1 Bets and Other Measures) Bill 2012 [2013], and I point out that the purpose of the bill is to reduce the harm caused by problem gambling by regulating the operations of poker machines through limiting the rate of loss of players. The bill aims to put in place machine capability by 1 January 2013; a $20 load-up limit for gaming machines, both in terms of accepting banknotes and in terms of accepting additional credits where the credits are already $20 or more, by 1 January 2017 for larger venues and by 1 January 2019 for smaller venues; and a $1 maximum bet limit per spin on gaming machines and limited linked jackpots and machine jackpots greater than $500.

This bill did go to the Parliamentary Joint Select Committee on Gambling Reform, and the committee recommended that the bill not be passed. With respect to Senators Di Natale, Xenophon and Madigan, I share their concern. In the country town I live in, Inverell, some years back a lady had an addiction to poker machines. She did do the wrong thing, and she ended up going to jail because of that addiction. It is a very serious problem. Coming from a family of bookmakers—my grandfather was a bookmaker and had betting shops back in the early 1900s in South Australia, and my late father, Reg Williams, was a bookmaker—I have seen firsthand the problem of gambling. But I will start by saying that the coalition government do not support this bill. We are committed to supporting problem gamblers, but it is a fact that most people do gamble responsibly. The majority should not be penalised by draconian laws because a minority have a gambling issue.

The Abbott-Truss government is not blind to these problems, and our policy is to assist problem gamblers with counselling, support services and voluntary precommitment. This is vastly different to the approach of the Labor-Greens alliance, which was supported by the Independents. They bludgeoned the clubs and hotels industry into submission, never listening to the stakeholders but instead imposing harsh laws. I know the clubs in the New England electorate were ropeable, and they let the then Independent member for New England, Tony Windsor, know in no uncertain manner what they thought of the proposals. It was one of his more memorable parting gifts—but more about that later.

We are talking about an industry that employs over 150,000 people throughout Australia and provides entertainment, sponsorship and donations for many millions of Australians. That is why we must be aware of the ramifications of this legislation. In addressing this legislation I would like to specifically address a couple of points. To introduce a $1 bet would mean enormous cost to the industry and the clubs. It is important to note that less than one per cent of gaming machines are set up to allow $1 bets. To change all this would be a massive cost, with design, development and approval of software. That could cost as much as $6,000 per machine. I think here of the little clubs that are the heart of their small country communities. They simply cannot afford this. Many are battling now to remain viable.

If we look at the nationwide cost, it will exceed $1 billion. It would probably be closer to $1.5 billion and maybe more. By my estimate, over half the poker machines in Australia are too old to have the new software installed, so they would need to be replaced at an estimated cost of $25,000 a machine. So we are looking at a $1-billion to $1.5-billion cost to our clubs. And, as I said, in many towns the club is the heart of the community.

I will turn now to precommitment versus $1 bets. Precommitment technology can be connected to a gaming machine without it being a costly exercise. The cost of precommitment upgrades is about $2,000 per machine. Compare that to the projected cost of converting machines to implement low-intensity features of about $6,000, to the cost of replacing a machine of $25,000. Voluntary precommitment provides personal choice, and it is left in the hands of the consumer to choose what they want to do.

Registered clubs have been the whipping boys in this whole debate. They were not listened to by those in the previous government, but the coalition listened in opposition and is listening now in government. I have spoken with club boards in many areas, and all are very concerned that they could be forced into a situation that would see them go to the wall. People should not underestimate the borderline viability of the smaller clubs in rural and regional areas—and that is simply a fact. The clubs do it tough, battling to survive, especially in smaller communities.

I will give you another example: Inverell RSM Club—a magnificent club in the town where I live. It does so much good for the community. It estimated, back in 2011, that it would be out of pocket $1 million to bring machines up to scratch. I will quote from their statement: 'This would change the way the club operates and have a big effect on the way we distribute funds back into the community with scholarships, donations and sponsorships.' This is a club that gives over $50,000 in donations and sponsorships plus in-kind support.

Photo of Richard Di NataleRichard Di Natale (Victoria, Australian Greens) Share this | | Hansard source

To the Liberal Party!

Photo of John WilliamsJohn Williams (NSW, National Party) Share this | | Hansard source

As to that interjection by Senator Di Natale, I will check with Jacko Ross, the President of the Inverell RSM Club, and I will ask that very question: how much money has the Inverell RSM Club donated to the Liberal Party?

Photo of Richard Di NataleRichard Di Natale (Victoria, Australian Greens) Share this | | Hansard source

How much does the industry donate to the Liberal Party?

Photo of John WilliamsJohn Williams (NSW, National Party) Share this | | Hansard source

So I will put that question to them, and I will know exactly how much.

Senator Di Natale interjecting

Well, perhaps we should go to Mr Wotif. Let us talk about donations and go to Wotif and the $1.6 billion donation to the Greens. You are holier-than-thou, but the biggest donation to any political party in the history of Australia went to who? To the Greens. 'Thank you, Mr Graeme Wood; just give us the cheque for $1.6 billion.' And now we get an accusation that the Inverell RSM Club is donating to the Liberal Party. I find that very amazing. In Inverell they do not even have a Liberal Party branch. We did not have a Liberal Party candidate last election; we had a National Party candidate by the name of Mr Barnaby Joyce—you may have heard of him, Senator Di Natale. That is outrageous—we are trying to be serious here about a very serious issue, and you are making a fool of yourself.

Photo of Richard Di NataleRichard Di Natale (Victoria, Australian Greens) Share this | | Hansard source

And the industry donates to the Liberal Party. You know that. You're compromised, mate; you're hopelessly compromised.

Senator Ryan interjecting

Photo of John WilliamsJohn Williams (NSW, National Party) Share this | | Hansard source

So, as I said, the Inverell RSM Club donated more than—

Photo of Sue BoyceSue Boyce (Queensland, Liberal Party) Share this | | Hansard source

Senator Williams, just ignore the interjections—

Photo of John WilliamsJohn Williams (NSW, National Party) Share this | | Hansard source

That is why I am going on speaking.

Photo of Sue BoyceSue Boyce (Queensland, Liberal Party) Share this | | Hansard source

and can I suggest that the interjections cease—

Senator Di Natale interjecting

Senator Di Natale!

Photo of John WilliamsJohn Williams (NSW, National Party) Share this | | Hansard source

I met with clubs at Port Macquarie. I had a good meeting with the board members from Port Macquarie Panthers and Club Taree. Back in 2011, the Wauchope RSL estimated that it would cost $1.59 million to change their arrangements with their poker machines. For Port Macquarie Panthers—a magnificent club in Port Macquarie, a beautiful part of Australia—it would cost $3.82 million for mandatory precommitment changes. These clubs do not have a bottomless pit of money, so something has to give. Will it be their sponsorship of the local junior sports teams, their subsidisation of cheap meals for our elderly or their scholarships for our gifted students? It is so easy to just attack the clubs over an issue.

I wonder if we are going to see a bill come to this chamber to put a maximum of $1 on bets at TABs and racecourses. There are plenty of gamblers who have a serious gambling problem who bet on racehorses, dogs, the trots—you name it, I have seen it. So are we going to put a $1 maximum on those bets as well?

What are the measures that the government is taking? We will repeal the functions of the national gambling regulator. All states and territories already have their own. We do not have to duplicate in this place; there is already too much duplication between governments in Australia, at a huge cost. Measures on ATMs, including cash withdrawal limits, are being removed to allow states to regulate. States like Victoria are already doing this at a state level.

I will give you an example: the Gravesend Hotel is in a small community east of Moree. It has the only ATM in town. A station worker, a worker on a property, might go in and say, 'I want to withdraw $300.' Because they have a couple of poker machines in the pub, he cannot. But what is wrong? It is his money. Are we such a big-stick operation here in Canberra that we are just going to say: 'No; you've gone into an ATM'—the only one in the town, by the way—'and you can only take $250 out'? Is that fair? What are we doing here?

The mandatory precommitment trial in the ACT will not commence under the legislation just being passed through the House of Representatives. The government is committed to pursuing venue based voluntary precommitment in the future. It will come in. Under the current laws, passed by the previous government, clubs had to go to all the cost of the precommitment and link the machines up to all the other clubs around the area at a huge cost—and then the patrons did not have to use it! It is just like having a law where every car manufactured in or imported into Australia must have seat belts but you do not have to wear them. That is the case with the previous Labor government's Andrew-Wilkie-style proposal, which would simply have done absolutely nothing except made things more costly.

The government is committed to pursuing venue based voluntary precommitment in the future by allowing the change of machines to do it, which will reduce, enormously, the cost to the clubs. The deadline for venues with greater than 20 machines needing to have voluntary precommitment enabled by 2018 has been removed. I share the concerns of many in this place. I have seen firsthand people with gambling problems. But by putting huge costs onto our clubs and threatening the viability of such clubs whereby they may have to close down, jobs will be gone from the towns. A place for community meetings will be removed. In Port Macquarie many, many elderly people go to the clubs in summertime, not to play poker machines, not to gamble in any way whatsoever, but because it is hot and they cannot afford air conditioning in their houses, and the club is air conditioned and pleasant. We do not want to make it hard for those people.

We want to help those people who have a serious gambling problem. Shutting down the clubs is not on, as I said, especially for the smaller clubs in the rural and regional areas that are the heart of the town. The big stick approach should be given away. People in this country are sick of being told from Canberra what they can do and what they cannot do. People are able to make their own decisions. We need to counsel and assist those with gambling problems. We want to help those people with gambling problems, but threatening the viability of the clubs is not the answer. It is too expensive and too costly. I am glad to be part of the coalition government that will not support this bill.

10:02 am

Photo of Richard Di NataleRichard Di Natale (Victoria, Australian Greens) Share this | | Hansard source

I thought I would be standing up today and giving a speech to argue the case for $1 bet limits, but it seems that, on the back of the legislation introduced by the government to repeal the very modest reforms around poker machines introduced in the last parliament, we are not just fighting for what is the appropriate response to limiting harm from poker machines but fighting a rearguard action against some of the most modest reforms we have seen anywhere in the country. What we need to understand is that this is an issue that affects the lives of Australians from small communities to big cities, but it is mostly the vulnerable, the poorest people, who are most affected.

I am not going to go into great length and recite the stats around problem gambling. Most people know the information. We lose $19 billion a year on gambling and $12 billion of that comes from the pokies. Senator Williams suggested that we put regulations on the TAB. If the TAB were the biggest source of problem gambling, then we might think about that. It is the pokies that are the issue. The vast bulk of people who get into problems with gambling are people who have a problem with the pokies. Of the $12 billion that is lost, $5 billion of it comes from problem gamblers. Forty per cent of the revenue that gets put into those machines comes from the people who can least afford it. That is the reality.

The numbers, in a sense, disguise what the real issues are, which are the stories about the way this affects people's lives. Most people know, or know of, somebody who has been affected by the pokies. I spoke to a colleague recently who had an employee that embezzled money because they got into trouble with the pokies, and then that employee embezzled money from his clients. I have very close working associates whose families have got into huge trouble with the pokies and they have refused, or have been too embarrassed, to come clean about the issue for fear of the shame associated with their addiction. This is an issue that affects the lives of people. It tears families apart and kids go hungry at night. That is the impact that problem gambling with poker machines has on people's lives.

The question is—and it is a legitimate question: what is the role of the state in regulating an activity that is a legitimate source of entertainment for many people but also produces significant harms? I keep hearing the nanny-state argument. It is one of the most fraudulent arguments used, usually by the people on the other side. I have never heard anybody complain about the nanny state when an ambulance comes and picks them up because they have had a heart attack and takes them to hospital to begin treatment. You do not hear too many people complaining about the nanny state then, or when the emergency services do great work in the face of a catastrophe. You very rarely hear people complaining about the nanny state in those circumstances. The question is: what is the role of the state in regulating an activity that is a legitimate entertainment but has the potential to cause serious harm, and in this case does cause serious harm?

We saw leadership from the coalition on an issue just like this in the wake of the Port Arthur massacre. People have a legitimate right to own guns. Guns serve an important purpose for many people in the community, but they also have the potential for real harm. We saw leadership from former Prime Minister John Howard, who introduced some really important reforms around gun control. He got the right balance around the legitimate rights of the individual and also ensured the government stepped in to minimise harm.

We get the balance wrong when it comes to things like alcohol and illicit drugs, and we have absolutely got the balance wrong when it comes to the question of poker machines. The Productivity Commission made it very clear: if you want to reduce harm from pokies you introduce $1 bet limits. It is pretty simple—you put $1 into a machine, maximum, per spin. It still means you can lose hundreds of dollars in an hour, but you do not lose the thousands of dollars that people can lose in a night's entertainment.

We have machines in this country that are not like machines anywhere else in the world. They are the assault weapons of the gambling world. They are the semiautomatic rifles of the gambling world. Our high-intensity machines in Australia are like no other. All this reform seeks to do is to bring our machines in line with the machines in other places. Individuals who do not have a problem and want to gamble legitimately can still do that. This is about the problem gamblers who bet huge amounts of money and lose thousands of dollars in an hour. The ordinary punter will not be affected by this reform. That is the beauty of $1 bet limits: the ordinary punter can continue to gamble; mum and dad can catch the bus down to the local club, get their parma and pot of beer, put some money into the pokies and not be affected. It is the problem gambler that this measure targets. The reason the industry do not like it is that they have a business model that is premised on 40 per cent of their income coming from problem gamblers. That is why the industry fights so very hard against it.

The issue before the parliament at this moment is about $1 bet limits, but the issue before the Senate in the coming weeks will be whether we support some of the most modest reforms that were introduced during the last parliament: limits on ATMs so that people cannot keep going to the ATM and withdrawing large amounts of cash—again, something that problem gamblers do, and the ordinary punter is not affected—and making the machines mandatory precommitment-ready so that every machine that comes out of a factory, at practically no cost to the industry, will have mandatory precommitment technology so that at some point a government with some courage might actually introduce that—again, a simple, modest reform that is very hard to argue against. And yet what did we see in the lower house yesterday? We saw the government introduce legislation that would repeal these modest reforms.

I find it staggering that a minister who wears his Christianity on his sleeve as a badge of honour would introduce legislation that affects some of the poorest and some of the most vulnerable people in our community and still allows ordinary punters to continue to bet on the pokies. This is a purely political act. It is a political act because they recognise that, within the Labor Party, there is division on this issue. I know there are many good people inside the Labor Party who are fighting the good fight. I know that there are many people who want to see the reforms, as modest as they were, that were introduced in the last parliament protected, but I also know the clout of the pokies industry. I know the clout of the clubs who deliberately target individual members of parliament and will use against them their support of a reform that protects vulnerable people but might reduce some of the revenue of some clubs. I know how brutal they can be. I also know that courage is in very short supply in this place.

What we are now seeing is not growing support for $1 bet limits, which the Productivity Commission has recommended is the most sensible way of addressing this issue; what we are now seeing is backsliding on the modest reforms from the last parliament. That backsliding means that, for the first time, where the Commonwealth had entered the space of poker machine regulation, we are going to vacate the space. It is going to make it almost impossible for a future government to decide to tackle this issue down the track.

The idea that this somehow would send the clubs industry broke is a nonsense. There are no poker machines in Western Australian clubs. They have a thriving clubs industry in that state. Their participation in sport is just as good, if not better, as other states. They do not have poker machines; they do not prey on the most vulnerable people in their clubs. So that is a nonsense. It is a furphy and it is what you would expect from the vested interests that make their money at the hands of some of the most vulnerable.

We are here to talk about $1 bet limits, but I do want to raise the issue of the legislation that was introduced into the parliament yesterday. Not only was the legislation introduced to try and unwind some of the modest action that we achieved in the last parliament but it was introduced under the cloak of secrecy. It was rushed through as part of an omnibus bill, cobbled together with all sorts of other pieces of social services legislation, with the hope that it would avoid the scrutiny of both the lower house and the Senate. This is a pattern that is emerging from this government—a government that promised open, honest, accountable government with no surprises in its first few weeks is introducing legislation, hoping to slide it through, that would unwind what was one of the most important issues of the last parliament. That bill deserves scrutiny and members in this place deserve to have the opportunity to debate and interrogate why on earth we would be giving this free kick to the pokies industry and unwinding reforms that ensure that some of the most vulnerable people in our community cannot go to an ATM and keep withdrawing large amounts of cash but can at some point in the future set a bet limit so that when they go into a club they can determine from the very start how much they are prepared to lose. And yet here we are looking at repealing that modest legislation.

We will not let that happen without a fight. We are going to mobilise those voices in the community. People like the InterChurch Gambling Taskforce are representing the various churches and understand that real Christianity is about protecting the most vulnerable people. It is not about ensuring that rent seekers and vested interests get what they want, using their might and their force to intimidate politicians who do not have the courage to stand up to them. That is what this debate is about, and we are ready for the fight. As Senator Xenophon said, we are ready for the fight. We expect that, the Commonwealth government having for the first time entered the space of regulation of poker machines, we will not vacate the space. It is an important precedent that was set last year. Granted, it was modest and the reforms were nowhere near where they needed to be, but at least we have the Australian parliament talking about what we can do to protect our most vulnerable Australians.

We know that the common-sense answer is dollar bet limits. They will not affect ordinary punters, who will continue to gamble in the same way they always have, but problem gamblers will not lose thousands of dollars in an hour. While we would like to see that reform, which was backed by evidence and by the Productivity Commission—who said, 'This does not need a trial; this can go ahead immediately; we know it will work'—I am realistic enough to understand that that is a long way off. But what I do want to see is that those modest reforms, which were introduced through the hard work of many good people in this parliament, are protected and that we stand up against Minister Andrews, who is using this as a wedge issue to try to exploit the division within the Labor Party—and it is true that there is division.

The opposition leader cannot hide from this issue. He will face scrutiny, and he will need to make a stand. Does he stand with the industry and with a business model that makes money off the backs of problem gamblers, or does he stand with the community, who overwhelmingly support reform in this space? It is time for Mr Shorten and Mr Abbott to take a stand, and I hope that they side with the community.

10:16 am

Photo of John MadiganJohn Madigan (Victoria, Democratic Labor Party) Share this | | Hansard source

I would like to speak briefly about the Poker Machine Harm Reduction ($1 Bets and Other Measures) Bill. I believe this bill will limit the impact poker machines have on our communities and the most vulnerable in them.

Many people may not understand or be aware of the full extent of poker machines across the country. Since the first poker machines were legalised in New South Wales in 1956, Australians have had an unfortunate sick relationship with these money-guzzling machines. In 1999 the Australian Productivity Commission reported that Australia had nearly 180,000 poker machines, with more than half of these in New South Wales. On a per capita basis, Australia has roughly five times as many gaming machines as the United States. In the fiscal year 2002-03, revenue from gaming machines in pubs and clubs accounted for more than half of the $4 billion in gaming revenue collected by states.

Madam Acting Deputy President, you may be thinking that this bill is about finances, but ultimately it is about people. These machines, found in pubs and clubs in all states excluding Western Australia, have a disastrous effect on many people's lives. They affect not only the persons gambling but also their family, friends and extended community. Men and women across the country are tricked into gambling in these machines. These machines offer the false promise of a fair go and the possibility of a jackpot. People are tricked into putting in just a bit more money because the next line will win.

The problem gambling website of Victoria spells out the real mechanics of poker machine gambling under the heading 'The poker machine is the winner'. The facts speak for themselves. I quote:

      …   …   …

        I believe that as a parliament we must take some responsibility and take more steps to protect our most vulnerable citizens. As with any addiction, breaking a gambling addiction is extremely difficult. As a parliament we can take some steps to shatter the false allure of a pokies jackpot win and give our constituents tools they can use so they have a fighting chance.

        This bill will make $1 the maximum bet on a poker machine. It will make the highest denomination a machine can accept $20. Jackpots will be capped at $500. The time frame for the full transition to these measures will be within five years. These measures may seem excessive to some; for others they may not be enough. But, when we realise that 40 per cent of gaming machine revenue comes from problem gamblers, I think this bill is certainly a good start.

        This bill really should not face any objection within this chamber. Gambling addiction is an unfortunate, devastating reality for so many in Australia. My office, along with the offices of many in this chamber, receives calls from people needing help. It is tragic to think that children of problem gamblers are two to four times more likely to go down the same path as their parents.

        It is important to remember that pokies have an impact on all aspects of our society. They impact on people individually, on their personal relationships and on a community level. Health effects range from mental health problems, through to drug and alcohol abuse, through to depression and suicide. Families find they are not able to pay the bills, buy food or meet medical costs. These stresses in a family environment can lead to the breakdown of marriages and relationships within the family.

        Prevention is better than cure. Healthcare professionals can only do so much. They cannot wave a magic wand, bring a family back together or make an old job again available. Poker machines are addictive. If they were not, they would not be so effective. This bill and this issue will not go away. New forms of gambling are constantly being pushed at Australians. These include online gambling companies targeting Australians but not being based in Australia, making legislating a nightmare. Earlier we heard about the philanthropy of the clubs. The question is: is this philanthropy based on the misery of others?

        10:21 am

        Photo of Claire MooreClaire Moore (Queensland, Australian Labor Party, Shadow Minister for Women) Share this | | Hansard source

        Senator Madigan, your words could not be truer. This issue is not going to go away, and I believe that the discussion that we will have in this chamber today will come back many times because this is one thing that we all agree on. I think that every speaker who has taken part in the debate so far has reinforced the knowledge that the issue of people who have serious problems with gambling, whose relationships, whose lives and whose security are all threatened by their addiction to gambling, is an acknowledged fact in our country.

        Work has been done over a number of years by strong activists and people who have gone out of their way to fight in sometimes very unpopular battles to raise these issues; we owe them a great debt of thanks. Their legacy means that we, not just as legislators but as members of the community, need to ensure that there is a commitment to working within our system—and always within our system—to come up with some solutions and options where we can make the balance about which we speak so often in this chamber, for the right and effective role of legislation and regulation as opposed to individual citizens' rights and the ability of business to make what they need to have as an effective profit.

        To the three senators who have co-sponsored this bill now over two parliaments: it is always damning when someone gets up and says, 'I deeply applaud the work you've done,' and, 'We acknowledge that your issues are important,' and, 'We agree with the core issue.' That is often the prelude to being told, 'We are not supporting your bill,' and in fact that is indeed true. So the opposition is not supporting this bill in the same way that we did not support it last time that it came for discussion and consideration.

        There are a number of reasons for this. The number one reason is that I think there needs to be a lot more work done before we go down the options that are put forward in this bill. A lot of the debate this morning has focused on the one-dollar bets, and of course I will talk about that as well. But with the other elements in the bill, whilst there has been increased scrutiny and research in this area there still remains a lot of debate about what the best responses are to the acknowledged issue of gambling. Senator Madigan raised the fact that there is a range of gambling curses in our country, and that is very true. Looking particularly at the issue of poker machines, there is no clear evidence that people only go to poker machines. With the issues around gambling in our country now there is a range of different options for people to choose from if they wish to get whatever the buzz is that they receive from gambling—there are a number of different ways that they can get that. Poker machines are but one, but I do agree that for access, and through some of the data that we have, they are a particular scourge in our community.

        I am never a person to use statistics too often but today I will, from the wonderful Productivity Commission report that I think all of the people who are sitting in the chamber today have read. I would hope that many more people than just the number who are here today are aware of that Productivity Commission report. It is a very large document, but I think it was an important point in the research and acknowledgement of this issue that that Productivity Commission inquiry was actually set up. It was recommended by our previous Senate committee. Senator Boyce was on that committee, as were Senator Xenophon and Senator Siewert, so there are at least a few of us in the room who have read the report—and I know that Senator Madigan has as well.

        One of the clear recommendations of our original committee, which I think was in 2010—correct me if I am wrong—was that there should be an independent review by the Productivity Commission into the issues of online gambling in our country. The then Treasurer agreed and put that forward, and the body of work that came out of the commission I think is now like a base document that people can turn to when they are considering the issues. They can read this report and see the issues that are raised in there.

        I know that the recommendations in the bill before us were discussed by the Productivity Commission. At the beginning they established a snapshot of the issue in our country. The Productivity Commission report was published in 2010 but I think it is still very timely. What we always need to do with these things is keep upgrading our data; but it gave us an idea, an estimation, of the prevalence of problem gambling in our community. At that time, through the data they had and the research information they had, they said that there were between 80,000 and 160,000—which is a pretty big margin of error—Australian adults suffering severe problems from their gambling. At that time that was calculated to be about 0.5 to one per cent of adults.

        In addition there were between 230,000 and 350,000 people at moderate risk, who experienced lower levels of harm. We know that people who are in that group have the potential, if there is not intervention or support, to then have a more serious problem. Then there is the wider concern that if there is not the acknowledgement of the issue and some joint effort to see what responses can be made, these figures could grow. What had happened, and what was said at the time, was that there was insufficient education in our community to make people aware that this was an issue and, probably more importantly, that this was an issue which could impact on you or your family. If you did not know that this was around you would not be able to identify that you may be one of the people who has the potential to do harm to yourself and to your whole network of friends and community by falling into the severe aspects of problem gambling.

        Because we are particularly talking in this debate around the issues of online gambling, another point was that about four per cent of adults play gaming machines weekly or more often. Around 15 per cent of this group would be classified as problem gamblers, with around an additional 15 per cent experiencing moderate risk. Given that basis, it was estimated that problem gamblers account for around 40 per cent of total gaming machine spending—the average of a range of estimates is as high as 60 and most conservatively as low as 20. Moderate-risk gamblers account for a further significant share.

        So within that there is an agreed acceptance that a large number of people in our community have been identified, often by others, or have self-identified, and this is an issue for them. Always, when you are talking about statistics, the important element is then to translate our mindset, which has become so focused on numbers, to the people involved in this. In their contributions, Senator Xenophon, Senator Di Natale, Senator Madigan and Senator Williams all pointed out the personal impact and the fact that this is not just an argument about numbers.

        Going from the acceptance that there is an issue, we move to the bill that we have before us. On the issue of $1 bets, there is some sort of instinctive reaction that, if you could only bet $1 at a time, you would be more likely not to have an accumulated impact of the problem. However, that is one element. You cannot jump from that kind of instinctive response to any proven evidence, to any kind of absolute knowledge that that is the first response that should happen. Too often over the last 18 months, when we have talked about this issue, it has become almost a litany that, if we had $1 bets, there would be no problem and, if we could only achieve this simple thing, we would have a result. I always am concerned when a single kind of response becomes somehow sanctified: 'If only we did that, there would be no problem.' I have a kind of reactive instinctive response: if something is seemingly so simple, why then do we put so much importance on it?

        We then had, through the Productivity Commission, and through the Joint Select Committee on Gambling Reform which was set up by Minister Macklin, more consultation and consideration of a range of issues. We had significant evidence from the industry and from various people about the potential impact and the potential cost if we just said, 'Okay, we'll move through all these machines and make them all $1 bets.' To begin with, we had people from our community who said: 'We don't want that. We actually are part of the wider community. Whilst we acknowledge that there are people who have problems, we do not believe that our freedom, our personal choice, our ability to go and gamble, should be legislated from on high and restricted so that the only way we are able to use online machines is if we can only bet $1 at a time. We are adults, we understand what we are doing and it is our right to be able to have options in what we choose to do with our money and our time.' So it was not just industry—although I am going to go on and talk about the industry impact.

        I think there has been some kind of battleline drawn up to say that this battle is exclusively between those of us who care about people who are damaged by problem gambling, and the industry whoever they are—this large industry who have, allegedly, according to the people on the other side of the battleline, no concern, no awareness and no knowledge about the impact that their business could have on people who have an illness. And I put it out there that we are talking about people with an illness. The people who are damaged by the issues around gambling have an illness—an addiction that causes them not to be able to have control.

        We had a range of submissions to our inquiry, and I know the Productivity Commission did to theirs, from people in the community who said—and I know that there are people who feel very strongly about this—that there is no role for government in stepping into any form of prohibition. Whilst $1 bets is not a full prohibition, it means that people do not have the options that they think they should have in an area of personal entertainment where they receive significant pleasure. There was that group of people who raised their concerns, and there was the industry.

        I know the senators who have put forward this bill relied very strongly on the Productivity Commission report, and I think that is fair; that is a great knowledge base. However, when you read the Productivity Commission report, after they make the point that a $1 bet system would be an option to respond to people who have problems, they then go into an extensive chapter about what the cost would be to actually implement that form of limitation. They say—and I apologise, I am going to throw some figures around—that there are approximately 200,000 EGMs, or electronic gaming machines, in 5,700 venues across Australia. They go on to say—this is around page 19.4 of the report—that gaming venues operate a mix of machines of different ages, manufacturers, game parameters and upgrade capabilities. Their advice suggests that the larger venues—and in the debates that we have, people have a bit of a concentration on the larger venues as opposed to the kinds of clubs that Senator Williams was referring to in small country towns—typically have higher volumes of gaming activity and tend to replace their machines more regularly and therefore, on average, have relatively newer machines compared with smaller venues. The Productivity Commission go on to say that there is a cost to the clubs and the venues in upgrading and changing their machines. So they have a bit of a schedule going.

        On one of our Senate committees we had the privilege to go and visit one of the larger distributors of these machines—they are not made in Australia—to see how the machines worked. It was interesting that, for all five or six of us there from the committee, it seemed to be the first time we had actually played these machines, so maybe we were not a true cross-section of our community. We were quite transfixed at just seeing how the machines worked and the complex mechanisms that set them up.

        The industry's argument around the institution of a $1 bet regime is that to adjust machines is an extraordinarily expensive proposition. To take an existing machine, no matter whether you are in a larger or smaller venue, and engineer a change is a very difficult thing. The idea would be that, as machines turn over, you would upgrade the machines. We talked about this in our committee. If you were going to impose any kind of limitation—$1 bets or any other kind of limitation—you would do that at the time of turnover. That gets back to what I said about how often machines are turned over.

        We had evidence that some venues had the same machines for many years, that they did not upgrade because they could not afford to. The licence they had, the turnover they had in their business did not allow them the freedom to turn over like the big operators could. There were estimates of what the cost would be, and again there was a wide range of what that cost could be. There was a significant impost on the industry if you would turn that over. In the same Productivity Commission report it said—and I will put these figures on record because of my natural inclination to put figures on record—that the cost of implementing a $1 maximum bet limit would be in excess of $3 billion to the people working in that industry.

        We know that it is a very profitable industry; there is no doubt about that. We have had the philanthropy argument many times about what percentage of income the industry put out to community areas and there have been, I think, some exaggerated claims of the largesse and generosity of some clubs. If you talk to some, you would think that the only reason they exist is to help the local community. Well, we know that is not true. The people who are there are working in a business. They have every right to be in a business, but they need to balance those kinds of exaggerated statements with a true examination of their books. This gets back to one of the core aspects of arguments of this type. What has happened over many years is that people have gone into their battle positions and get overly emotive, I believe, and exaggerate their claims to try and get the attention of the wide number of people in our community for whom this is not such a big issue—if it does not impact on you, you do not really listen to it. So we have had claims and counterclaims all around the place. The one thing that we do know is that there is a problem. What we need to identify is the best response.

        One of the other issues raised by the Productivity Commission was the fact that this has for a long time been a state issue and if we do not get the states on board in terms of coming up with a solution then nothing is going to change. So necessarily we need to have the engagement of COAG. We saw amazing pressure being brought out by various people during the previous debates around this issue in the last parliament. It identified that, whilst there is an element of common ground about acknowledging a problem, there was a wide range of concerns about how we actually make that step towards effectively responding to the problem. We need to ensure that at least all the people who are involved in this process should be together so that we can come up with a solution that engages everybody. We know we will not come up with a solution that pleases everybody—I think that is patently obvious. But what we need to do is see that. If people are putting forward significant issues for change and we have seen it, unless we engage the people who have different views around this we will not be able to come up with the solution.

        We are not supporting this bill, because though the simple things that are in it are important and are probably or possibly the best way to respond, we do not believe that at this stage there is sufficient evidence to say that we need to have the change put in at the cost it would cause. I seek leave to continue my remarks on the basis that this debate will go on.

        Leave granted; debate adjourned.