Sporting and community clubs are flagging cuts to sponsorships and other community benefit initiatives to compensate for higher state government taxes from May 1.
Last week, the Napthine government struck a deal with Frankston MP Geoff Shaw to raise the tax brackets for hotel and club venue operators by 4.2 per cent.
The move was identified in the government’s 2013-14 budget update to restore its share of electronic gaming machine revenue to the pre-2008 levels of 36 to 38 per cent.
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The government’s share of gaming machine revenue dropped to 34 per cent in 2012-13 and is expected to remain at 35 per cent in 2013-14.
The tax hike is expected to reap the government an extra $287 million by the end of 2016-17.
Mr Shaw opposed the bill in its initial form but struck a deal that secured an extension for clubs to pay their entitlement fees and the postponement of the proposed April 1 start date for the hike.
The powerful clubs lobby, Clubs Australia (CA), is calling the move “an unprecedented tax grab on the community clubs industry”.
It says the tax increase will cost community clubs $75 million over four years and will hit clubs, community groups and charities hardest.
CA executive director Anthony Ball said the government’s changes “amount to a small stay of execution for not-for-profit community clubs”.
“When community clubs close, people lose their jobs and the charities, sporting teams and community groups that rely on the club’s support suffer,” he said.
“The Napthine government’s plan shows that they either don’t understand or don’t care about the financial stress already suffered by many clubs as well as the important contribution clubs make to their local communities.”
According to a CA spokeswoman, nine clubs across Whittlesea and Hume will have to pay more than $746,000 each year in additional tax as a result of the government’s planned changes.
Broadmeadows, Craigieburn and Sunbury United sporting clubs, Casa D’Abruzzo Club, Epping RSL, Lalor Bowling Club, Sunbury Bowling Club, Sunbury Football Social Club and Whittlesea Bowls Club will all be affected come May 1.
Broadmeadows Sporting Club general manager Mick Streiff said the higher taxes would have a significant impact.
“It’s an extra $30,000 in tax we have to pay each year,” he said.
“To offset that we’ll have to look at what we contribute to the community, or a staff reduction.
“We’re a small club; we don’t have many staff as it is,” Streiff said as he manned the club’s reception desk, fielding calls and signing off on parcels.
The government also plans to reduce the return-to-player rate from 87 cents to 85 cents.
