Clubs in the Southern Highlands have vowed to survive the NSW Government's devastating gaming tax hike but lament that doing so may come at a cost to the local community.
While clubs with annual gaming revenue of between $1 million and $5 million will pay 18.3 per cent in tax during 2004, by 2010 that rate will have risen to 25 per cent.
Larger clubs with revenue between $5 million and $10 million will by 2010 be paying 35.0 per cent tax and clubs with revenue over $10 million will be slugged a massive 40.0 per cent.
And that doesn't include GST or compulsory Community Development and Support Expenditure Scheme payments.
For Mittagong RSL Club, that means by 2010 it will be paying more than $3.7 million, based on expected gaming revenue of above $10 million.
Under the current tax scheme, the tax bill was projected to be just over $2.5 million, a difference of more than $1.2 million.
General manager Rod Desborough, who is also a director of Clubs NSW, said the tax rise announced last June, combined with changes to GST arrangements, had the potential to drive both large and small local clubs to the wall.
"The key thing here is that clubs can't wait until 2007 or 2008 to start making changes to operations, if they're going to viable they have to sit down now and start looking at strategies," Mr Desborough said.
During recent months Mittagong RSL Club, which recorded a profit of just $855,000 last year, has been considering ways to carry the new tax burden.
Strategies include a decision to increase the price of beer twice a year in line with the Consumer Price Index and reduce member benefits such as happy hour drinks and birthday vouchers.
The club will also examine its catering operations - which last year posted a loss of some $180,000.
Mr Desborough said this loss could no longer be absorbed and even with much belt-tightening, "by 2008 the club will struggle to make a profit".
Despite this, he said the club was committed to limiting the flow-on impacts to the community.
"We will do everything in our power to make sure the community doesn't suffer," he said.
Mr Desborough stressed clubs were not opposing having a tax on gaming revenue, just the increases the government was introducing.
"We are probably the highest taxed industry there is, and what they are doing is boosting that to unsustainable levels," he said.
Mr Desborough said he could not fathom NSW Labor's line of thinking in putting up this tax.
Unlike hotels and casinos registered clubs were formed by groups of people who had the interests of the community at heart.
"Clubs are owned by their members. Profits from hotels and the casinos go into the pockets of their owners whilst all profits from clubs are re-invested into the club and the community," Mr Desborough said.
This is a sentiment shared by secretary-manager of Bowral Bowling Club Trevor Olsen.
While Bowral Bowling Club won't face the same gaming tax hikes as Mittagong, because its revenue is much lower, changes to GST rebates offered by the State Government are also making things hard.
Mr Olsen said the club had been forced to increase schooner prices by 10 cents and bowls fees by a dollar a game, with more rises likely at the end of the financial year.
He said taxation pressure had already forced many other small clubs to the wall.
"We, unfortunately, may be the only bowling club left on the Highlands in five years time," he said.
"And once clubs like us go out of business it will be up to local government and the State Government to fill the void of who's going to provide that support to the local community."
Email a friend