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Labor's super threat to Aussie sport

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Senator Richard Alston (U b«i. v*,»â„¢ , Shadow Minister for Superannuation — For Media —


Labor's new compulsory Superannuation Guarantee Charge (SGC) today claimed its first sporting victim and it is likely that there will be many more.

News today that the Rugby League President's Cup under-21 premiership will be scrapped from the Winfield Cup next year as a result o f cost pressures in large part due to Labor's Superannuation Guarantee Charge (SGC) should sound a warning to all other Australian sporting organisations and sports people.

The 4% superannuation the League now has to pay has contributed to making the running of three grades untenable.

Indeed, with costs continuing to rise, the Australian Football League (AFL) and rugby league clubs Australia-wide who have players on contract, will not be able to afford to keep the present number of graded players and remain viable within existing salary caps. It could come down to the loss of all but paid reserve and first grade sides, or a severe reduction in the lower grades, leaving a smaller pool from which the first grades can draw.

The AFL with 750 registered players will be in dire straits as it will be faced with a total bill of up to $2 million to cover the super levy.

The 16 clubs in the Rugby League Winfield Cup operate on salary caps between $1.3 million and $1.6 million dollars. They will be facing extra costs of between $60,000 and $80,000 this year, as a result of Labor's SGC. Although only 5% of players are able to earn their total living from the contract fee, all are still expected to contribute to superannuation.

The Canberra Raiders RL Club will have to find an extra $75,000 this season at a time when it has just finished paying of all its outstanding debts.

The Government's Superannuation Guarantee Levy will do nothing to assist the plight of already struggling sporting clubs around Australia, some whom could be facing a bill of up to $80,000 extra this coming year.


Most sporting bodies have expressed their total opposition to the super levy. The Victorian Soccer Federation and the Amateur Soccer Federation of Victoria are already taking steps in seeking an exemption, as are tha New South Wales Rugby League and the AFL. Other sporting clubs such as Victorian Council for the teaching

of Swimming and Water Safety (VICSWIM) and the Victorian Baseball Association have also forwarded letters to the Treasurer pleading for a similar let-out.

With deteriorating economic circumstances, a clamp-down on sponsors (for example, the tobacco industry), and sponsors cutting back or pulling out altogether, the SGC levy is an unjust and untimely burden for clubs to carry.

Many sporting clubs are experiencing financial difficulties due to the recession anyway but the levy at the present time will make it very difficult for some of them to operate and remain viable. Rugby clubs in Sydney's western suburbs for instance claim to have had a 20% loss in revenue for the past financial year alone.

A potential problem for the amateur and minor professional clubs, as a result of the loss of tobacco sponsorship, is the movement of the smaller sponsors like soft-drink companies - presently sponsoring areas like surfing - to the big time sports like rugby league and cricket leaving the smaller clubs floundering. Amateur clubs are also trying to cope with rising costs associated with renting land from councils under a user pays system, which is not taking into account their financial situation.

The AFL and Rugby League are the only sports with the majority of top level players on contracts. This will pose a particularly difficult problem as it is illegal for them to touch the existing contracts without the players' agreement. The levy will be a distinct disadvantage to these clubs as the money will have to be taken out of

other funds or from already strapped sponsors and could result in the loss of players or a club altogether.

Other problems the SGC will pose for sporting clubs include:


VICSWIM which employs approximately 800 people on a casual part­ time basis for an average of one month a year to teach children to swim will be forced to shell out around $25,000 this year on account of the SGC. Most VICSWIM employees will have to be covered by the SGC as their earnings will be over the minimum monthly earnings threshold.

VICSWIM has stated that the levy cannot be absorbed by the organisation and will therefore have to be passed on to the consumer which may prevent many young children from learning to swim.

VICSWIM may also have to employ more casual staff to administer the levy at extra costs in the vicinity of $2,000.


Soccer and Baseball:

Soccer and Baseball clubs will also be disadvantaged due to the levy with the Soccer Federation stating that it could cost them up to an estimated $70,000 - a cost they can ill afford.

Obviously some players are more valuable than others and the individual clubs will have to decide if any players are to be sacrificed to pay the super levy.

Clearly, the Government has lumped all sectors o f the community together without any clear understanding o f the consequences that this levy will have on them. In the case o f sporting clubs - especially those in the amateur and minor professional sector - there will be an escalation in costs, once again disadvantaging the low

income earners in the community, and threatening the very existence of some clubs and teams which are already perilously close to bankruptcy.

For further information, contact: Senator Richard Alston on [03] 866 3455 (w).

Thursday, 16 July 1992.