Greg Farrell Speech

Greg Farrell Christmas Address 2015

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Country Club Christmas Celebration

1st December 2015

Good evening and thank you Jackie.

Let me take this opportunity to welcome you to Country Club and to welcome

our General Manager Jackie Hutchinson. We are delighted to have secured

someone with Jackie’s experience and skills to this position and she has made

an outstanding start. The position of Country Club General Manager is an

important role in the Tasmanian business community.

Our family has had a close association with Country Club for well over thirty

years. Our father, Greg Farrell senior, saw the great potential in this place in the

late 1970s when it was still rocky farmland. He had a vision to turn this into

Australia’s first casino resort with the architecture and design based on the

grand homesteads of the American South.

I know he would be as proud as we are of the way that the Country Club has

developed over the years.

Tonight I would like to outline – from my perspective – the key issues in the

global, national, and Tasmanian environments.

And also to talk to you about some of the things that our company is doing and

address what has been said about us in the media recently.

In outlining the key issues facing citizens of this planet, it is hard not to start

with the recent events in the Middle East and Europe.

We have looked on throughout 2015 with a sense of disbelief at the suffering

that has spread from Syria and Iraq to many parts of Europe. Within these two

failed states a radical and vicious movement has emerged.

The lack of effective government in Iraq and Syria has led to untold suffering

being experienced by millions of innocent victims in these countries and forced

hundreds of thousands to flee.


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It seems that the terrorist regime that calls itself Islamic State is changing its

tactics. This is perhaps due to losing strategic strongholds, financial pressure or

dwindling recruits. They are now encouraging radicals to attack Western

targets with the aim of destabilising society as we know it.

It has never been more important for Australians to stand united and celebrate

our way of life. We are tolerant, open and resilient people; and ultimately if

Australians and all of the governments of the West stick to these principles, then

we will win.

Moving on to the global economy and it is clear to all of us that there are

extraordinary opportunities in this part of the world. The economies of Europe

and the United States are now picking up and have returned to growth.

However, the economic power has shifted towards Asia.

Although China’s economic growth is slowing, their economy is still growing at

7% a year. Other economies in the region are also growing strongly including

India, Indonesia, Malaysia and Vietnam.

Federal Group has been involved in all the recent trade missions to China and

south east Asia, and we will continue to be part of the team and support the

Tasmanian Government and institutions like the University that are working to

build close links in the countries of our region.

As a country we have so much to be thankful for right now. In the modern era,

Australia holds the record for the second longest period of economic expansion

of any developed country. We have experienced 24 years of sustained

economic growth, from 1991 to the present day.

We are closing in on the record held by the Netherlands which experienced 26

years of sustained economic growth between 1982 and 2008. That is quite

incredible and points to how resilient our economy is.

In Tasmania I believe that we have strong reasons for optimism.


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Our brand goes from strength to strength. Its attributes resonate more than ever

in a world that is busier, riskier and less certain. The Tasmanian brand is built

on our special place, our special people and the products and the experiences

that we can provide to a world that is becoming increasingly commodified.

Over the last year it has been pleasing to see the Tasmanian economy

continuing to improve. Our unemployment rate is now the third lowest of the

six states and only New South Wales and Victoria have lower unemployment.

There is still more to do in creating jobs for Tasmanians and lifting our

participation, but we are clearly heading in the right direction.

One of the great stories, and undoubtedly a factor in the improving

unemployment situation, has been the success of Tasmanian tourism. This is

down to many years of work by the industry and governments, along with all

Tasmanians, to build our brand to where it is today. We are now reaping the

rewards of those investments.

Speaking of investment, there is also a sharp spike in tourism investments in the

state. The Tasmanian Government’s EOI process for developments in our

reserve system has produced some outstanding and innovative ideas; I hope that

a number of these will hit the market in the coming years.

There is also some serious investment in hotels in Hobart. At least five are

under construction right now – including our very own MACq 01 – and there

will be nearly one thousand more hotel rooms in the city over the next couple of

years.

However, we need to remember that a vast majority of visitors to Tasmania will

travel to other places in the state besides Hobart. There are already some signs

of a two speed tourism economy where Hobart and perhaps the East Coast are

doing well but other locations are still flat.

Regional dispersal is still a challenge and will require a combination of driving

demand to visit these areas as well as new investments in regional Tasmania.


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I would now like to discuss some things that are closer to home for our

company. Like the Tasmanian economy, our businesses in Tasmania have

performed solidly during 2015. Our leadership teams in each of our businesses

have done an excellent job over the past year.

Country Club has had a successful year and is well ahead of budget already for

the first months of the new financial year.

Our MACq 01 hotel is now taking shape on the Hobart waterfront, and it will

undoubtedly be one of the most exciting new hotels in Australia when it opens

in early 2017.

The location is amazing, the rooms will be generous and with a luxury feel, but

it will be the engagement with the Tasmanian character that will set this hotel

apart. We want our guests to immerse themselves in this place and to dig below

the amazing scenery and heritage to learn about what makes Tasmania tick.

I would now like to discuss and address some of the things that have been said

about the Federal Group in recent weeks.

Since the last Deed commenced in 2003 I thought that it would be interesting to

calculate a few numbers, and I can confirm that we needed a big calculator.

Since July 2003 Federal Group has paid the Tasmanian Government over one

billion dollars in taxes and licence fees, and another one hundred and thirty

three million dollars in other state and local government charges. Overall,

payments from our company account for eight percent of all State Government

revenue.

These payments have allowed Tasmanian Governments over that period to

invest in major services for the Tasmanian community such as hospitals,

schools and roads.

Or, they could have built one hell of a museum.


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Since 2003 we have proudly paid over one point one billion dollars in wages.

We employ over two thousand Tasmanians who make a great contribution to

our company and the communities in which they live.

Federal Group is also one of the largest purchasers of Tasmanian goods and

services. As a company we actively prioritise local suppliers and last year we

spent more than one hundred and seventy million dollars. These purchases

included iconic and high quality Tasmanian seafood, beef, wine, chocolate and

whisky to name just a few.

And the venues we run in Tasmanian communities are popular with locals and

visitors. In the last year we welcomed over two million guests through our

doors.

Federal Group has a demonstrated track record of investing in Tasmania.

Saffire is now one of the most acclaimed hotels in the world and was last year

named as the best boutique hotel in the world. And we want to invest further in

some exciting new developments.

In 2014 we took a proposal to the Tasmanian Government to invest at least one

hundred million dollars in the coming years on three exciting projects.

The first was a major transformation of Wrest Point to better take advantage of

the stunning location and to return it to being a centre for entertainment with

new bars, restaurants, casino, high-roller facilities and entertainment spaces.

The second was the creation of a sister property to Saffire at Port Arthur that

would be an immersive experience for visitors on a glorious site with stunning

views of the Penitentiary, the Isle of the Dead and Carnarvon Bay.

And finally we proposed a major expansion of the Country Club including new

restaurants, bars, a health spa and new golf club house.

We explained to the Tasmanian Government last year that to carry out these

exciting and significant developments we would require an extension of the

current terms of our licences to allow us to secure the necessary debt funding.


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The Government asked us at the time whether we would be prepared to consider

an amendment to the existing Deed for a casino to be licensed at MONA.

Our response was clear. We have been since day one very supportive of

MONA and recognise the impact it has had on Hobart. We would therefore

support a MONA casino on two conditions.

Firstly, that the Tasmanian Government supported our developments and the

necessary licence extension. And secondly, that any licence granted to MONA

could not have an end date that extended past our own. This position has not

changed.

As we all know, David Walsh decided to withdraw his proposal. Can I add that

we have not seen the MONA proposal as any discussions were between them

and the Tasmanian Government.

Since that time there has been a lot of public and media interest in this issue. A

small group of people have used this as an opportunity to spread a number of

untruths. I would like to address some of them and set the record straight.

The first is that we are holding the Tasmanian Government or people to ransom.

This is simply untrue. As I said earlier we want to invest over one hundred

million dollars and we need the ability to secure and then repay the necessary

debt.

A second untruth is that problem gambling is now a huge issue in Tasmania.

The latest Social and Economic Impact Study confirmed that this is also untrue.

Problem gambling is declining and is currently at half of one percent of the

adult population, one of the lowest rates in the country.

Despite Tasmanian incomes being lower than the national average, the

percentage spent on gambling by Tasmanians is well below the national

average. In fact, between 2009 and 2013 it declined by twenty seven percent.


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The Study also confirmed that the Tasmanian gambling model has been very

effective in minimising harm. To put things in perspective, we know that the

social and economic costs of gambling are significantly lower than the costs of

other issues like alcohol, tobacco and obesity in our community.

Another untruth that has emerged is that the Federal Group breached the 2003

Deed regarding the development of Saffire.

Yet again, this is simply untrue. The company committed to spend not less than

twenty five million dollars on a development at Coles Bay, and we ended up

spending over thirty two million.

The development was delayed numerous times – I don’t think that we are

Robinson Crusoe there – and each delay was approved by the Tasmanian

Government.

The delays were largely due to third party appeals; primarily the Tasmanian

Conservation Trust that tried to frustrate the agreement we entered into with the

Council and State Government to improve the Coles Bay water supply.

We wanted to ensure that Saffire would not have water restrictions which were

occurring annually at Coles Bay during the peak tourism season. These delays

cost us over three years. But I am proud to say that the one point eight million

dollars latter that we invested on improving the water supply for all of Coles

Bay has meant that the town is not on restrictions in the lead up to what looks

like serious drought conditions.

In fact, Coles Bay currently has over three years supply of water in the storage

that we built.

Yet another untruth is that the company has unreasonably delayed the

development at Port Arthur.

This is untrue again.


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We have invested significant time, energy and money into the project.

However, as a direct result of the Tasmanian Gaming Commission’s Mandatory

Code of Practice on our business from 2012 we were forced to delay the project.

The Social and Economic Impact Study that was tabled last week found that the

financial cost of the introduced measures between 2011 and 2014 were forty

five million dollars. I can confirm that the vast majority of these costs were

worn by our two Tasmanian casinos.

During this time problem gambling rates remained relatively stable while

revenue crashed, demonstrating that much of the impact was on recreational

gamblers.

They say that every cloud has a silver lining. The additional time has allowed

us to refine the design and concept as a result of the many things we have

learned with the opening of Saffire.

The new development at Port Arthur will now be even better than the original

concept with a rich experience for the visitor on heritage and culture and an

opportunity to experience both the development of the Australian character and

the heirloom produce and recipes from the era.

Federal Group is a strong and vibrant company. Our values and principles

mean that we focus on our people, our customers, our suppliers and the

community in which we operate. We aim to build long term relationships.

For over fifty years the Farrell family have been passionate about Tasmania and

have tried to play a role in helping to fulfil the amazing potential of this unique

island state.

I would like to wish you all the very best for the festive season and a great 2016.

Greg Farrell Speech

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