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ClubGRANTS guidelines - summary of changes

From 1 September 2011, the former Community Development and Support Expenditure (CDSE) Scheme has been reformed and renamed ClubGRANTS following amendments made to the Gaming Machine Tax Act 2001.

ClubGRANT guidelines have been published to support the operation of the ClubGRANTS scheme. The majority of the guidelines' provisions commenced on 1 September 2011 with some exceptions – see below.

The ClubGRANTS guidelines are based on the former CDSE Scheme guidelines with changes to reflect the legislative amendments. The former CDSE Scheme guidelines ended on 9 February 2012.

Registered clubs are now entitled to a greater gaming machine tax rebate – up from 1.5% to 1.85%. The higher tax rebate will enable a maximum of 1.1% of gaming machine profits over $1 million to be allocated under Category 2 expenditure – up from a 0.75% rebate under the former CDSE scheme. The gaming machine tax rebate available under Category 1 remains the same at 0.75% of gaming machine profits over $1 million.

A new category of expenditure has been introduced. Under this new category – known as "Category 3" - a minimum of 0.4% of a registered club's gaming machine profits in excess of $1 million is automatically allocated to a Statewide funding pool for large scale projects and services associated with sport, health and community infrastructure.

These amounts are automatically taken from the tax paid by clubs and transferred by the Government on behalf of clubs into the fund at the end of each gaming machine tax year.

Category 1 and 2 expenditure.

Changes have been made to the Category 1 and 2 expenditure provisions of the guidelines. The changes are as follows:

Category 1 expenditure has been expanded to include expenditure on veteran welfare services and art therapy (paragraph 2.1).
Category 2 expenditure has been expanded (paragraph 2.2) to include expenditure on:
- a club's core activities including sport, returned servicemen's league/veteran welfare, golf course and bowling green maintenance including for wages paid to staff to carry out maintenance; and
- professional sport, including the National Rugby League, with the exception of monetary payments to professional or semi professional players and their coaches and managers.
Allowable capital expenditure under Category 2 has been clarified to make it clear that expenditure can be provided for upgrading buildings, improving access to buildings, upgrading communications technology or connections to utilities for club facilities - provided that the building or facility is not primarily commercial in nature, is not related to gaming and is not operated on a for-profit basis (paragraph 2.2).
In-kind expenditure provided under Category 1 and Category 2 is to be calculated at market value (paragraphs 2.1.5 and 2.2.2).
Category 1 and Category 2 expenditure can be provided to Local Committees for administration costs up to $1,000 per club or 10% of available combined Category 1 and Category 2 funds (whichever is lesser) (paragraph 2.3.2). Previously only Category 2 expenditure was permitted for administrative costs.

Problem Gambling Counselling Projects and Services

ClubGRANTS funds can no longer be provided for problem gambling counselling services except in the following circumstances (paragraph 2.3.3):
- A registered club that is party to an existing contract with a counselling service that provides problem gambling counselling services to the club's patrons may make a claim under the ClubGRANTS Scheme for funds provided to that service.
- The club can make a claim under the ClubGRANTS Scheme as follows:
  - Until 31 August 2013, a registered club that is party to an existing contract can claim 60% of funds provided to the problem gambling counselling service.
  - From 1 September 2013 to 31 August 2014, a registered club that is party to an existing contract can claim 40% of funds provided to the problem gambling counselling service.
  - From 1 September 2014 onwards, a registered club that is party to an existing contract can claim 20% of funds provided to the problem gambling counselling service until the contract with the problem gambling counselling service expires.
- Once an existing contract between a registered club and a problem gambling counselling service expires, a rebate can no longer be claimed for funds provided to that service.
- An existing contract means a contract that a registered club has entered into with a problem gambling counselling service before 10 February 2012.

Treatment of Club Bingo and Charity Housie

Club Bingo is disallowable expenditure under Category 1 and 2 (paragraph 2.3.5), as it is conducted for the purpose of promoting a club's services.
For Charity Housie, the market value of a club providing a venue, equipment or a staff member for the conduct of Charity Housie is allowable in-kind expenditure under Category 1 or 2 provided the funds raised through the Charity Housie are expended on activities covered by Category 1 or 2.
However, where a promoter of Charity Housie provides a club with an in-kind benefit to conduct Club Bingo, such as supplying staff, the club must deduct the market value of this in-kind benefit from any in-kind benefit that the club provides to the charity.
For example, where a club provides a venue to conduct Charity Housie and the charity provides staff to conduct Club Bingo, the club must deduct the market value of the staff supplied from the market value of the venue provided to calculate the allowable in-kind expenditure.

Expenditure to Assist Victims of Natural or Other Disasters Occurring in NSW

Registered clubs can provide unlimited Category 1 and Category 2 funding for services to assist victims of natural or other disasters that occur in NSW (paragraph 2.1.1).

Under this provision, there is no requirement for the Minister to advise the club industry that expenditure provided to assist victims of a particular natural or other disaster occurring in NSW is eligible expenditure, nor for the Minister to identify the fund that the expenditure should be deposited into.

Expenditure to Assist Victims of Interstate or International Natural or Other Disasters

The guidelines provide that expenditure provided to assist victims of interstate or international natural or other disasters is eligible Category 1 and Category 2 expenditure, provided certain conditions are met (paragraph 2.3.6).
The conditions are that:
- the Minister has advised the club industry that expenditure provided to assist victims of a particular interstate or international natural or other disaster is eligible expenditure, and has identified the fund that the expenditure should be deposited into;
- the expenditure must be deposited into the fund within 12 months of the interstate or international natural or other disaster's occurrence; and
- the amount claimed:
  - must not exceed 10% of a registered club's total eligible Category 1 and 2 ClubGRANTS expenditure; and
  - must be shared equally between Category 1 and Category 2 funding.

Other changes to the ClubGRANTS guidelines

Accountability and Reporting:

Clubs are now required to keep reports from benefiting organisations for five years instead of three (paragraph 4.7).

The provision dealing with "Publicising Approved Projects" (paragraph 4.10) has been expanded to require clubs to make every attempt to maintain on a publicly-accessible website, a list of all programs, projects or services for which funding has been provided. The list should be updated every quarter. The guidelines set out what the list should include.

Local Committees:

Clubs must now advise their local committees of the URL of the webpage which contains their list of ClubGRANTS (paragraph 6.3.1).

Local committees must adopt a rule that the committee must meet at least four times per year (paragraph 6.4).

Transitional arrangements and commencement dates

The ClubGRANT guidelines commenced on 1 September 2011 with some exceptions.

Provisions relating to clubs and local committee requirements commence on 1 September 2012 to give clubs and local committees time to implement the requirements.

The requirements commencing on 1 September 2012 are:

Clubs are required to make every attempt to maintain on a publicly-accessible website a list of funding allocations to benefiting organisations. The list must be updated every quarter (paragraph 4.10).
Clubs must advise local committees of the URL of the webpage which contains their list of ClubGRANTS (paragraph 6.3.1).
Local committees must adopt a rule that the committee must meet at least four times per year (paragraph 6.4).

Provisions relating to problem gambling counselling projects and services (paragraph 2.3.3) and the clarification of treatment of expenditure on club bingo and charity housie (2.3.5) commenced on 10 February 2012.

The requirement to keep reports from benefiting organisations for five years instead of three commenced on 10 February 2012.

For expenditure allocated prior to the date the ClubGRANTS guidelines were published (10 February 2012), registered clubs are able to apply either set of guidelines up until this date.