The Minns government cries poor while squibbing reform that could raise hundreds of millions

When Tuesday’s state budget is handed down and you hear Treasurer Daniel Mookhey and Premier Chris Minns drone on about challenging financial circumstances, keep in mind that the government has squibbed it on a reform that could have freed up hundreds of millions of dollars for essential services like schools and hospitals.

How do we know? Because only 12 months ago Labor was laying the groundwork for tackling this piece of overdue reform. Buried in the 2024 budget papers was the revelation that a few dozen casino-style clubs received nearly $500 million in gambling tax concessions. In total, NSW residents forewent $964 million in taxes in the 2023-24 financial year as a result of the gambling concession granted to clubs, and are expected to miss out on just over $1 billion this financial year.

NSW Treasurer Daniel Mookhey and Premier Chris Minns Credit: James Brickwood

Clubs do not pay any tax on annual gambling profits under $1 million, whereas hotels start paying tax when their profits hit $200,000. The maximum tax rate for clubs is 28.4 per cent on gambling profits over $20 million, while hotels pay 50 per cent on gambling profits over $5 million. In short, the mini casinos preying on the most vulnerable in Sydney’s suburbs are paying bugger all tax compared to hotels, or The Star or Crown.

The budget analysis showed that the five per cent of clubs that made more than $20 million in profit last year enjoyed 50 per cent of the gambling tax benefit, or about $485 million in concessions.

Why was that information included in the papers for the first time? Because Mookhey and NSW Treasury officials wanted to start paving the way for change by first explaining to the public the scale of the issue. The information may have been hidden but the message was clear: here’s a problem that we are going to need to fix.

But over recent months the government decided that while it liked the idea of clawing back some budget revenue, it did not want to open up a fight with the powerful clubs lobby.

Asked by the Herald’s Alexandra Smith about the decision not to curb the concessions, Mookhey replied: “When it comes to different forms of taxation, lots of people have different views as to the taxes that we should increase and the taxes we should decrease; it’s always an area of public debate.

“We listen to it all, but when it comes to specifically the issues around clubs and pokies and pubs, the government’s response is there, predominantly, through the cashless gaming process.”

Treasurer, given Labor’s long resistance to cashless gaming, you will forgive us for not falling for that spin. The truth is there is little to no momentum towards cashless gaming, and no chance of club tax reform next year as the government approaches an election in March 2027.

Mookhey is a smart political operator, a deep thinker and a good treasurer. But on poker machine tax reform he has revealed himself to be disappointingly weak.

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