A key Australian trade union has warned the New South Wales government that casino workers will lose their jobs if it proceeds with a plan to substantially increase casino duty rates from 1 July 2023.
Looming as a surprise ally for embattled Star Entertainment Group, which this week painted a bleak picture for the future under the proposed tax changes, United Workers Union executive director Dario Mujkic told The Sydney Morning Herald that the government’s efforts to punish Star for its recent failings would likely have unintended consequences.
Instead, Mujkic called on NSW Treasurer Matt Kean to return to the negotiating table to nut out a better deal for all.
“The New South Wales Treasurer hasn’t clearly thought through the potential impact of the proposed tax change on business operations and more importantly the workforce,” he said.
“It’s time for the NSW treasurer to sit down and properly engage with The Star and the United Workers Union, repair the damage that has already been done, and agree on a path forward that is reasonable and does not put jobs at risk in any way.”
Mujkic’s comments come after Star this week warned that the future earnings capacity of The Star Sydney could be seriously harmed should the NSW state government proceed with plans to increase the casino duty rates. Full implementation, it said, would cost Star AU$1.6 billion (US$1.1 billion).
“If implemented in their current form, the proposed duty rate increases would have a significant adverse impact on the profitability of The Star Sydney, further compounded by the changing operating and competitive environment as described above,” it said.
“In this scenario, The Star intends to undertake an urgent review of The Star Sydney’s operating model and assets, with a view to maximizing value for the group’s shareholders.”
The proposed changes, which would see poker machines in NSW casinos taxed at 60.67%, come despite Star having previously inked a 20-year deal with the government in 2020 forEGMs at The Star to be taxed at 32% between 2022 and 2024, 33% from 2025 to 2027 and 34% for the 14 years thereafter.
The new tax would almost double those rates.
Star’s shares have suffered significant falls since the company’s updated outlook, dropping to as low as AU$1.29 on Tuesday. Shares peaked at AU$6.08 in December 2017.
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