Thursday, 1 March 2018

A surplus of lies

Treasurer Gutwein reckons even after factoring in all the promises made during the election campaign there will still be surplus totalling $104 million over the next four years.

"The key thing here is that we have arrived at a modest surplus to provide for a buffer moving forward," he was reported as saying.

Mr Gutwein forgot to mention the skinny surplus each year is solely because of the $40 million special dividend received annually from TTLine.

As explained in the last blog profits don’t imply cash surpluses. Now we have Mr Gutwein trying to tell us there is still a buffer when the tiny profits which he calls surpluses  are due entirely to transfers that are locked away and can only be used to fund vessel replacements.

Take away the TTLine transfers and even the paper profits disappear.

Saturday, 24 February 2018

Back in black?

One of the Hodgman government’s claim that always seems to pass without challenge is the proposition that the budget, being back in black is now able to withstand more spending.

The almost universal view is that we now have the necessary cash buffer to be able to loosen the purse strings a little and give ourselves a treat after a few years of austerity.

However, reality has a different perspective.

Wednesday, 21 February 2018

RSL pokie porkies

The release of player loss figures for each individual pokie venue casts a huge pall of doubt over the claims by the Glenorchy RSL that removal of pokies will be the swan song for the Club and the end of life as we know it.

The Club’s haul for the 2015/16 year, the total of player losses, was $590,000. This is only a fraction of the $4.5 million lost at the Mecca of misery, the Elwick Hotel just up the road with the same number of machines.

But with losses of about $20,000 per pokie there’s no money being made by the Club. Anyone familiar with the industry knows that when player losses slip below $20,000 per pokie it’s time to summon the pokie machine undertaker.

Tuesday, 20 February 2018

Election odds

The absence of any reliable polling during the current election campaign has left most observers scratching their heads as to what is exactly happening in the minds of voters.

What are the betting markets saying?

Saturday, 10 February 2018

Liberal pokie gifts

Andrew Wilkie in his latest media release reckons the Federal Group is “set to pocket an enormous $18 million windfall if the Liberals win government.”


The figure is $75 million.

There’s obviously a bit of misunderstanding about how the Libs’ pokie industry welfare policy works. The value of pubs and clubs with pokies will receive a boost with increased pokie commission. If the venues are given licenses for a set period, then the amount of those future commissions will reflect in enhanced capital values of venues. If the licenses are in perpetuity, then the value of pubs and clubs with pokies will increase by $250 million.

Thursday, 8 February 2018

Love your local

Just tuned into the latest Love Your Local promo on the LYL facebook page featuring the Beach Hotel Burnie. It was surprisingly frank. Whilst it only gave half the story that half was reasonably truthful. But telling only half the story can be misleading.

Monday, 22 January 2018

Pokie backflip?

The extension of pokie machine into community pubs and clubs was initially bitterly opposed by the Federal Group. Until it got a better deal. 

In the interim it submitted an alternative  to a LegCo inquiry in 1993 proposing increased numbers of pokies at the two casinos.

What Ms White is now proposing and what Federal Group now ferociously opposes, is virtually the same as the policy it fully supported in 1993. 

The following are snapshots from the 1993 submission:

Tuesday, 9 January 2018

Liberals' pokie policy

It’s easy to summarise the Libs’ pokie policy. They have simply adopted THA and Federal Group’s position. Without amendment.

When Rebecca White moved the goalposts the Libs were left flatfooted with a urgent need to find a plausible alternative.

Yet despite the mountain of evidence presented to the parliamentary inquiry plus its 72 findings and 23 recommendations, despite its own post 2023 framework  that specified allocation of venue licenses by a market based mechanism, the Libs opted instead to adopt the THA/ Federal proposal in its entirety, a proposal lodged so late in the life of the parliamentary committee it didn’t have enough time to consider it in detail.

Monday, 1 January 2018

Federal Group: What will the New Year bring?

As the clock ticks over to start what is bound to be a watershed year for the Federal Group, few will take as much interest as the Group’s bankers. Rebecca White’s undertaking to remove pokies from community pubs and clubs after 2023 should she be successful at the March 2018 election will precipitate a major overhaul.

Back in 2016 Federal Group was treading water. The most recent financials reveal there was no improvement in the 2017 year. Specifically:

·       Turnover was the same at $512 million.

·       Expenses increased slightly causing net operating cash to continue its downward slide from $51 million to $46 million. That’s the lowest figure since 2001, sixteen years ago.

·       Net profit before tax fell from $28 million to $20 million.

·       Net profit after tax fell to $14 million.

·       As per usual shareholders drew out most of the after tax profits. Dividends of $11 million were paid in 2017. Since pokies in pubs started in 1997 shareholders have withdrawn $250 million in dividends.

·       Capital hungry tourism businesses can’t keep up that level of dividend payments without borrowings. Another $4.5 million was needed. Capex spending was $31 million, about $20 million more than the inadequate annual spend of the last few years. The fit out of MACg01was probably the reason for this increase.