Parliamentary record : Part I debates (27 February 1985)
Debates for 4th Assembly 1983 - 1987; ParliamentNT; Parliamentary Record; 4th Assembly 1983 - 1987
Made available by the Legislative Assembly of the Northern Territory
Northern Territory Legislative Assembly
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Legislative Assembly of the Northern Territory
DEBATES - Wednesday 27 February 1985 Mr Speaker, we have established that the Northern Territory government was acting as a very benevolent banker to the major equity holdersof these assets yet, despite the generous nature of these banking arrangements in terms of loans and outright gifts, the Northern Territory government failed to secure any equity in this project or return for its money. Its incompetence cost the Territory $2.5m. That is not the end of the story of gifts and loans. We now come to the case of the $2m open-ended loan which, if one follows the explanation given by the government, the Territory was instructed to give to the new operators by the new pperators themselves. We have already seen that, regardless of the purchase price, the Northern Territory government had agreed that the trust would pay no more than $47m for the properties and, further, that it could only service a purchase price of $45m. Let us remember Mr Moore's words on this: 'Aspinalls and GreateBay were quite firm that the profits that the casinos could generate would only service the purchase at around $45m'. It appears that those clever fellows from London and Atlantic City were a bit too fast for the local lads. Of course, the saving grace for the government - or so it says - is that the $2m is only a loan and it will be repaid as will the $250 000 a year interest when and if the trust can repay it. Following the release of the documents by the Chief Minister, we know now that this loan and the interest will be repaid by the trust over 15 years, but these repayments will come not out of its funds but out of ours. In other words, it will come out of the much-vaunted one-third share in the profits that are supposed to accrue to the Northern Territory - that magic $30m that I will speak about in a minute. For precisely the same reason as the outright gift of $2.5m and the other loan of $21m, this raises the same questions. The Chief Minister and Treasurer chose to use taxpayers' money to solve party-political problems and, in so doing, neglected his higher responsibilities to the people of the Northern Territory as Chief Minister. Furthermore, in so doing, he chose to deceive the people of the Northern Territory about what he was doing. Mr Speaker, I move on to the question of $800 000 paid to Federal Hotels in interest on the value of its assets between the time of the takeover and the final settlement. It is $800 000 which we will not get back; it has been lost to the taxpayer because of this government's inability to negotiate properly. It is $800 000 which again was committed well before the Chief Minister made his statement that no funds had been diverted from the budget to purchase the casinos. These figures and the casino operators' agreement reveal that the Northern Territory government has distributed largess to the new operators in a way that was not available to Federal Hotels. For Federal Hotels, the calculation of gaming tax was .simple: it was 20% of the turnover less the winnings in Darwin and 15% in Alice Springs. The new operators were allowed to take out from their guaranteed rate of return to the property trust, the cost of direct labour and associated costs and the total overhead costs of the 2 casinos. In other words, in the first few years, the new operators have been allowed a set of deductions so generous that they eliminate almost the entire tax base. Hence, on the turnover of about $4m in the September quarter, they paid $245 compared with Federal Hotels' previous quarterly payment of $775 000. Mr Speaker, as the Leader of the Opposition indicated, there are 2 separate and essential issues that the Chief Minister should have addressed in his speech. He should have informed the Assembly why he intentionally misled the Northern Territory public in his press statement of 28 November. Further, he should have explained to this Assembly the reasons why government 36
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