Newsagents in it to win it

Selling off public assets to boost the budget bottom line has been popular since the 1980s, but an effort to sell the electricity industry last year cost both the NSW Premier and Treasurer their jobs. Although privatisation remains unpopular with many Labor MPs, the sale of NSW Lotteries looks likely to go ahead later this year. The global recession is hurting the budget, and the pressure is on to sell off another public asset. Party powerbroker and Treasurer, Eric Roozendaal, is driving the push within Cabinet, and there is no shortage of apparent bidders. The Victorian Tattersals group, Tabcorp, and Greek company, Intralot, are reported to be interested.

G-Tech, a subsidiary of the world’s largest lotteries firm, Lottomatica, would like to roll out its lottery vending machines, as it has in Italy. The Club Industry, a major Labor Party donor, is also rumoured to be interested. But the most interesting bid may come in the form of a 51/49 per cent joint partnership proposal from the Newsagents Association.

Uneasiness about the sale of NSW Lotteries is not limited to general concerns about the profit motive trumping community welfare. Many fear it may be the death of local newsagents. Lotto sales are like petrol sales for newsagencies ¬– a low-margin product that brings customers into the store where they buy higher-margin items.

The SSH spoke with local newsagents to get their views. Elizabeth Boag, a Waterloo newsagent for 30 years, thinks it’s vital the Newsagents Association bid is successful. “Instant Scratchies being put in vending machines should concern us all. Newsagents are the best place to keep a friendly eye on customers who may overspend,” Ms Boag said. 

Andrew Packham, owner of two newsagencies on Abercrombie Street, Darlington, is also the Director of the Newsagents Association of NSW and ACT (NANA). He says that the State Government has been very open and transparent throughout the bid process, but that Treasurer Roosendaal has been unable to respond in any way to the partnership question due to probity issues.

Should the Joint Venture proposal fail, NANA will pursue a full bid, but Mr Packham says, “We are under no illusions that we can solely fund a bid of this size”, meaning a consortium or other partners would be required. 

Bob Gould, who runs Gould Bookshop at the top of King Street, is a long-time Labor Party activist and opponent of privatisation. Mr Gould said, “It’s madness for a Labor Government to privatise Lotto”, but he also sees the 51 per cent Government and 49 per cent NANA offer as a good fallback position, warning that: “The government must realise newsagents are not mugs. With newsagents throughout the suburbs and country towns, an angry newsagent may not be very helpful to a government in need of friends.”

Whoever ends up buying NSW Lotteries may end up with a bargain. Just a few years ago, it was valued at $900 million, but the impact of the global credit crisis has experts picking a sale price of just $550 million. With the next State election looking difficult for the Government, Treasurer Roozendaal will be hoping that, through the sale process, he does not end up with a Faustian bargain of his own.

Source: South Sydney Herald July 2009 www.southsydneyherald.com.au