Private Recreational Leases continued

In March 2018 the Home Affairs Bureau (HAB) released its ‘Review on Policy of Private Recreational Leases’ (PRLs), now the subject of a public consultation ending on the 19th of September 2018. The review has caused considerable concern among sports clubs, chiefly because of its proposal that they should pay a land premium for their sites set at one-third of the full market value land premium. Essentially, this amounts to a tax on sport and the questions are whether it is justified and what effect it would have on sports development.

The review identifies 27 sites operated by 24 clubs and proposes that they should continue to be dealt with under PRL policy, but with significantly modified lease conditions to meet the dual needs of sports development and optimization of land use. This does not mean that on expiry the leases would be renewed, because the review goes on to list the following assessments relative to renewal:

a) whether sites are providing sports facilities that are rare or not provided by the Government and, if to be provided by the Government, whether the relevant departments have the expertise and knowledge to develop and operate such facilities? The second of these questions illustrates a fundamental problem with the Government’s sports policy; the assumption that if the Government provides a facility, the Government should operate it. Examples of successful and unsuccessful sports systems prove that the role of the Government should be to provide facilities and empower the community to operate them through the medium of sports clubs

b) whether sites are opening facilities to eligible outside bodies, thus alleviating pressure on public sports facilities? Here the review acknowledges the inadequacy of public sports facilities, but does not quantify the shortfall and makes no recommendation for increasing the supply, or for improving their usage through better management. It’s a facile assumption, unsupported by any evidence, that the 24 PRL sports clubs could meet the community’s need. Some improvement in PRL utilization is certainly possible, but nothing like what is needed by the community. Again, the community’s problem with lack of facilities and ineffective operation of public sports facilities is the result of the Government’s inadequate sports development policy

c) whether the sites are providing essential training bases for NSAs and promoting sports in the community? Again, if the Government had an effective sports development policy, suitably located NSA training bases would have been provided. That they, with the exception of Sports Institute facilities, have not been provided is a problem and even some of the sports adopted by the Sports Institute lack suitable elite training facilities

d) whether the sites are providing facilities for hosting local and major international sports competitions? Confusingly, the review notes that many clubs have facilities that are inadequate for hosting major international events, but that some clubs do (such as the Golf Club), and that these events are beneficial to the development of sport and tourism. The provision of facilities for major international events is not — and never was — the responsibility of clubs. Yet again, the provision of such facilities is the Government’s responsibility and the lack of such facilities is a handicap to the development of sport

The proposal to levy a tax on clubs equal to one-third of the full market value land premium cannot be justified from a sports development perspective. If absorbed equally by members it can only result in an increase in membership fees, putting organized competitive sport even further out of reach of most people.

Perhaps this proposal relates to the corporate memberships offered by some clubs, whereby companies provide club memberships to senior executives to make their employment more attractive. Does the review consider that corporate memberships represent a financial advantage to companies, who might have to pay more to obtain access to similar facilities if provided by profit-making companies? If so, perhaps the answer is for the ‘benefit’ to be taxed at the level of the company holding the membership, not for all the ordinary members of a club to be taxed to the detriment of sports development.


 
       
 
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