Luxury tax to to hurt Freo, Eagles
Luxury tax to to hurt Freo, Eagles

The AFL's proposed luxury tax, aimed at closing the gap between its rich and poor clubs, has the potential to strip a further $600,000 from the WA football economy to prop up cash-strapped clubs in other States.

WA's AFL clubs say football department spending equalisation is all but inevitable in 2015, but have urged the league to consider its specific circumstances when implementing it.

The AFL is investigating measures to narrow a gap of more than $6 million in football department spending between its richest club, Collingwood, and lowest- paying one, Port Adelaide.

Inflation in football department spending has easily outstripped growth in club revenue for much of the past decade. In 2013, seven clubs posted losses, not including Greater Western Sydney and Gold Coast.

One proposal, a "soft cap" on non-player payment football department spending, involves a luxury tax on money paid in excess of the cap. Struggling clubs would get the proceeds.

The AFL already draws $1.2 million a year from West Coast and Fremantle as part of its $2 adult members ticket levy to support struggling clubs. There was also a $2 levy on general admission tickets which raised $170,000 out of West Coast and Fremantle matches in 2013.

That will increase this year and is likely to cost the clubs an extra $40,000 each.

A luxury tax could cost the Eagles and Dockers $300,000 apiece, depending on where the AFL sets the threshold and whether the clubs adjust their spending.

Both WA clubs are in the top seven for football department expenditure. Collingwood spent $22.5 million on their football department last year, $1 million more than West Coast. Fremantle have not released figures but have conceded their spending was comparable to the Eagles'. Both WA clubs support the principle of equalisation, acknowledging the inflation of the past decade was unsustainable.

But Eagles chief executive Trevor Nisbett urged the AFL to allow for extra expenses because of travel and the $10.5 million contribution the clubs made to the WA football economy annually.

"Rent and royalties in this State go back into the football community," Nisbett said.

"It would be really disappointing if the AFL didn't take that into consideration."

Fremantle chief executive Steve Rosich understood the AFL's reasons for wanting equalisation but Fremantle's final view would depend on the detail.

The West Australian

Popular videos

Our Picks

Follow Us

More from The West