The Ministry of Health had several meetings with the Problem Gambling Foundation to address concerns about political lobbying after complaints by poker machine trusts about outspoken attacks on the sector, the Sunday Star-Times has been told.
A senior industry source said pokie trusts had lodged several complaints with the ministry about PGF's behaviour, resulting in the foundation's chief executive, Graeme Ramsey, being called to "please explain" meetings.
Ramsey confirmed the meetings, saying "it's fair to say our political activity creates tension with the funder" but said he had told the ministry no taxpayer money was spent on advocacy work.
The ministry decided on Thursday not to renew its problem gambling counselling contract with PGF.
PGF is highly unpopular among the gaming sector, a senior official said, saying it "was blatant politicking and it went beyond advocacy and into manipulation. They had become a vehicle for the Greens and the Labour left".
PGF's campaigns have included opposition to the expansion of the SkyCity casino, exposing pokie machine rorts and promoting Maori Party MP Te Ururoa Flavell's gambling reform bill of 2013.
Ramsey said the ministry's decision, which strips away 77 per cent of the foundation's budget and is likely to result in up to 52 job losses from a staff of 63, had the effect of "silencing the big voice against gambling". He said the PGF board will get legal advice to see if it could overturn the decision.
"People can draw their own conclusions about why this happened," Ramsey said. "And I think people will draw them. You can be assured there will be celebrations in SkyCity and a number of pokie trusts."
Former PGF chief executive John Stansfield echoed Ramsey: "No doubt the corks will be popping at Sky City."
But those claims were rejected by the chief executive of the biggest pokie trust, Mike Knell of the New Zealand Community Trust, who said: "It's a very poor response: we're not celebrating, when people and staff are involved we would never celebrate."
He said there was "no currency" in suggestions PGF was paying for its outspokenness. He said studies by the Ministry of Health had shown a lack of transparency and accountability in how PGF spent the $18m of levies taken from the pokie industry which funded the counselling contract.
The move met with a wave of international and local criticism, led by University of Wollongong gambling expert Samantha Thomas, who said: "It came as a shock because they are so highly-regarded in the international community for the work they've done. Everyone is devastated because they are such champions in their field."
Professor Thomas, who recently wrote an academic paper arguing for the creation of an equivalent body in Australia, said PGF is "one of the only organisations in the world that have that advocacy voice and have been able to advocate so effectively against the might of the industry. This is a highly, highly respected organisation."
She said PGF was seen as a world leader in the provision of ethnic-based counselling services and in changing the debate around problem gambling away from a focus on the individual to the industry itself.
Stansfield, who led PGF from 2003 to 2008, said: "This is a very black day - you can chalk one up for the merchants of misery."
He attacked the Ministry of Health a "flock of spineless poseurs masquerading as public health champions" and said: "Not being able to speak ill of the government because you've received their money might be the case in North Korea, but it shouldn't be here."
Both Ramsey and Stansfield both suggested the new service provider, the Salvation Army, would be less effective. "The Salvation Army have not been as vocal as we have on this issue. I don't see why that would change," Ramsey said.
Salvation Army social services director Gerry Walker denied that. "Our record speaks for itself and we will continue to speak out as and when we see fit on social issues," he said. "This contract is not going to change that."
Stansfield said getting help from a religious-based organisation would be a barrier for many addicts. "Some people don't want a counsellor with a tambourine on the wall."
Both the Ministry of Health and the associate health minister Peter Dunne have said the decision was not made for political reasons, but on performance grounds.
The future looks bleak for the foundation. Ministry funding will continue only for its 11-strong specialist Asian gambling unit. Ramsey said it was "quite probable" he would have to make himself redundant, along with many other staff.
- Sunday Star Times
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