Clubs and the economy
Clubs are a vital part of the ACT economy.
According to a recent SEIS report compiled by the Allen Consulting Group on behalf of ClubsACT, in 2006/07:
- Clubs had combined assets of $212 million dollars
- gross revenue totalled about $272 million
- gross expenditure by clubs was about $208 million
- clubs employ nearly 2,200 people, many of whom are young people, working on a part time or casual basis
- over $86 million is paid in wages, salaries and payment to contractors each year.
Clubs invest $40 million each year on capital improvements, while almost 80% of the goods and services they consume are purchased from businesses in the ACT.
In the next 3 years, the investment intentions according to the SEIS survey was $189 million – depending on the state of the sector/economy etc.
While these economic indicators reflect a sizeable club sector, growth has slowed and since 2002 has in fact declined – in terms of revenue (particularly gaming revenue), expenditure and assets.
If anything, the economic outlook will continue to be difficult, particularly as the effect of the indoor smoking ban in clubs continues to bite (new outdoor restrictions are imminent), a tougher regulatory environment with the prospect of further harm minimisation measures, increased gaming taxes (up 17% as of 1 July 2007) and a generally depressed economic outlook.
All this makes for a pretty challenging competitive environment for the club sector for at least the next 18 months to 2 years.
Fortunately some clubs have been preparing for this eventuality and have been able put aside some of their operating surpluses to help withstand the expected subdued trading performance.
Other less financially strong have done it tough and there are, and will be, casualties (3 in the last 12 months). Fortunately the community facilities and affiliated sporting and other groups, are not necessarily lost if, as in two of the cases, another club has been in a position to take-over the struggling club.
As not-for-profit organisations the purpose of clubs is to maximise the benefit for their members and they do that by ploughing much of their combined operating surplus back into their clubs and into community infrastructure.
Of course, unless clubs generate anoperating surplus and re-invest they would cease to be viableand would not be able to participate in Canberra'sfuture.
Governments (both Territory and Federal) are also beneficiaries of club activity, particularly gaming machine activity. In 2006/07 clubs paid about $50 million in gaming taxes and other charges.
