The biggest line items on the budget to be decided over the coming weeks are in health and education. Short term current spending will be a priority but this morning we lay out a programme of financial instruments around sport that can help bolster both in the long term.
Sport is central to the way we organise ourselves as a society. It is the glue that binds many communities together and the fuel that drives so much of our collective passion.
Most importantly it is the means by which we get active, stay healthy and live productive lives.
We the People
We the people, through our Government are the primary supporters of organised sport in Ireland. On an annual basis the irish Sports Council is given around €40 million to distribute to National Governing Bodies of Sport to advance elite sport as a source of aspiration and inspiration, and grassroots sport of many hues to keep us healthy.
Ireland’s engagement with sport is ahead of the EU average in many ways and the NGB’s do a good job in promoting sport for all in a wide variety of ways.
This current spending has reduced in recent years and needs to be reversed to get back on an even keel in an activity that both saves money on health through prevention, and also generates substantial revenue through economic activity. In economic terms sport is an investment rather than a cost base for the Department of Finance. It needs to be seen in that light.
Over the course of the current Government an additional €70 million has been put towards capital projects up and down the country, in addition to money set aside from the sale of the National Lottery and put towards the phased development of the National Sports Campus.
This is a Government which has played fair by sport at a time when finances were incredibly tight. Now there is an opportunity to be not only fair but great.
Tourism template
The Irish Tourism sector has been brought back to life through the amendment of VAT on tourism related services from 23% to 9%. In most cases this has been passed directly to the consumer who has re-invested in spending. It has boosted hotels, tourism events, restaurants and other areas and been hailed as a real money generating success.
Sports sponsorship attracts approximately €80 million a year into different sports, mainly at the highest level. For many of the companies involved in sponsorship, including financial services, insurance and betting VAT is not charged to customers and is therefore non recoverable when it comes to accounting for spend.
It means that a €100,000 sponsorship deal would cost €123,000 in real money. The reality is that it’s more likely the €100,000 spend will remain that but that almost a quarter will be lost to sport and the programmes it is funding through going back in taxation.
Sport for Business’ proposal is threefold:
1. That the rate of VAT on sporting sponsorship where a fixed proportion of the spend is directed towards community or grassroots sport be reduced from 23% to 13%.
2. That where the sponsorship is wholly directed towards and spent on programmes aimed at encouraging youth participation in sport, that the VAT rate be dropped further to 9%.
3. That a specific budget be set aside within the irish Sports Council budget to promote sport as a CSR activity in line with stated Government policy around this critical area.
Government has an important role to play as an investor in health promotion and a promoter of diversity and community through sport.
It’s most important role though can and should be in encouraging greater investment by business within our community in the benefits of sport.
It can and should be there as an enabler, though financial and other ways of stronger relationships between business, the communities in which it operates and the sports which bind those communities.
Sport for Business will be raising this proposal with the Minister of State for Sport, Michael Ring and the Minister for Finance, Michael Noonan at two meetings in the next 48 hours. If you feel it is an argument that makes sense, contact us today and lend your support to an idea that could transform sport, business and the health of our nation.
Sport for Business works with over 100 member organisations to raise the level of engagement and delivery between sport, business and society.
To find out more about how we can help your organisation harness the collaborative power of sport and business, contact us today for a bespoke tailored membership proposal.
Among those you will be joining are the GAA, FAI, Irish Sports Council, Leinster Rugby, Athletics Ireland, Aer Lingus, Dublin Institute of Technology, Eircom and the Department of Transport, Tourism and Sport.
It could be the best decision you will make today.
