Changes can be made to tax system that would increase sports funding

Printed Sunday 02.10.23

I have just had a magical weekend of sport. First up was seeing almost 36,000 people at the Aviva Stadium to support our women’s soccer team fresh back from a first ever appearance at the World Cup. Then I settled down to see our men’s rugby team beat the reigning champions South Africa in the Rugby World Cup in Paris. And then on Sunday there was Leona Maguire leading Europe to glory in the Solheim Cup.

I could not help but cast my mind back to a campaign, run by the Federation of Irish Sport, over a number of years under the banner ‘Why Irish Sport Matters’, which highlighted the impact of sport in such diverse areas as health, the economy, tourism, community and our international reputation.

In any society it is accepted and proven that sport and physical activity are good for us. It teaches us, inspires us, engages us, and encourages us all to lead healthier and more active lives. It is also good for our economy. The total value of sport to the Irish economy annually is around €3.3bn. Today sport is responsible for some 64,000 jobs in Ireland.

Sport plays a vital role in our tourism sector. The return from major events such as the recent Notre Dame v Navy game was phenomenal. Our golf tourism figures are remarkable. And how can we put a value on what it does for our international reputation, and the feel-good factor for us all, here at home.

Recognising the important role played by sport in Irish life and equally recognising how government support and funding has an important role to play in the delivery of sport we have set out what we would like to see happen in the upcoming budget.

In particular we have set out what we want them to do by way of providing more finance for our members — all the national governing bodies and the local sports partnerships who between them make sport and physical activity happen in Ireland.

It is important to fully understand the role played by the NGBs and the LSPs. They are the bodies that make organised sport happen in Ireland and they do this through the 13,000 clubs across all sports that are at the heart of sport and physical activity in this country.

When the government set out its 10-year national sports policy in 2018 it recognised from the outset the pivotal role that would need to be played the NGBs and LSPs if the plan was to deliver on its objectives. In fact, such is their importance that they are the first to be listed in the key organisations mentioned in the national sports policy document.

The policy states: “The combined use of the expertise, knowledge and insight of this sporting fraternity will be essential for the successful implementation of this policy. We will therefore prioritise and enhance their funding to reflect the important contribution they make to Irish society.”

In the ‘National Sports Policy 2018-2027’, the government also recognised that if its challenging objectives were to be met then funding for sport would need to be increased substantially, and they committed to doubling it over ten years.

And we have seen a steady increase in funding to Sport Ireland, further investment in our state-of-the-art National Sports Campus, several rounds of the sports capital programme and the much-needed supports to help sport through the darkest days of Covid.

However, over the last three years inflation has had a major impact on the funds currently being provided and this has had a knock-on impact on the core funding available to both our NGBs and LSPs.

To emphasise this point, in 2022, core funding increased by 8.3 per cent, while average consumer price inflation increased by 7.8 per cent. In 2023, core funding increased by 6.7 per cent, and inflation averaged 6.2 per cent in the first half of the year.

The government invested €175m in sport in 2023 but the core funding that went to the NGBs to enable them to carry out all their essential programmes was €16m — and this is shared across 58 sports. The 29 LSPs received €9m.

The Federation of Irish Sport has made a submission to government ahead of the forthcoming Budget. We have four ‘Asks’, the most important being to take inflation and the increased cost of doing business into account in the core funding of our NGBs and LSPs. We believe this is essential if the country is to meet the targets set in the National Sports Policy.

We are realists, and we know that there are major demands on the government for funding in many different areas, particularly health and education. Having said that, a balanced approach pays off. There is a significant bank of evidence to show that the return on government investment in sport is significant. Research in 2019 showed that 97,000 cases of disease were prevented through participation in sport and physical activity and that represents a saving of €500m to the Exchequer.

Bearing in mind the demands on government, we have also looked to come up with solutions which are evidenced based where funding specific to sport might be raised by changes to the tax system — a view we believe is shared by the government.

Action 3.7 of the ‘Sports Policy Action Plan 2021-2023’ contains a number of tax expenditure reforms which at their core seek to help make sporting organisations become more self-sustainable and less reliant on government funding over time. Our members understand and welcome this ambition.

The Federation of Irish Sport was given responsibility to drive this action and we have put forward a number of business cases in this regard. These cases are underpinned by a report, which is already with government.

The proposals in the report are:

1 Extend relief on donations to approved sporting bodies.

2 Provide VAT relief for sporting bodies.

3 Grant charitable status to those NGBs and LSPs .

4 Create tax-driven incentives for personal exercise.

In particular we believe that tax incentives for personal exercise could be a major game changer for people with disabilities, which is an action set out in the government’s sports policy.

Our third ‘Ask’ in our budget submission calls on the government to increase the tax on betting and to use the extra monies generated to invest in specific areas of sport to help increase participation in hard-to-reach areas such as ethnic minorities, people with disabilities, and in socially deprived areas as well as building sport and recreation infrastructure.

The final Ask is that the government look closely at insurance reform in order to quickly reduce liability premiums to affordable levels. These reforms have been identified but they are not happening fast enough and are negatively impacting the sports sector.

Yes, as we have been saying for many years, sport matters. It deserves to be supported with more government investment. And the good news is it provides a real return on investment for every extra euro that can be provided, given that for every €100 invested there is a return of €195. To us, it’s a no-brainer.

Mary O’Connor is Chief Executive of the Federation of Irish Sport