Investec was the biggest beneficiary of the WA government last year

A new report detailing the government of Western Australia’s expenditure on consultants in the second half of last year has revealed that South African wealth and investment advisory firm Investec was the biggest beneficiary during the period, primarily for its assistance with the sale of TAB.

Nestled within the Western Australian (WA) government’s Department of Treasury, TAB is the sole provider of wagering services in the region, both online and in retail outlets. The entity is part of Racing and Wagering Western Australia, which provides financial support for racing events, while also supervising and monitoring their integrity.

Despite a thriving racing and betting industry, the government has been considering the sale of TAB in recent times, with the objective of tackling “likely challenges that will arise in the future.” To help test these concerns, the WA government asked South African firm Investec to conduct a thorough assessment of TAB’s financial affairs.

Founded in Johannesburg 1974, Investec was conceptualised as a wealth and asset management firm for clients whose assets exceeded £150 billion, and has since grown into an international specialist banking and wealth advisory firm with headquarters in London. The firm is listed on the Johannesburg Stock Exchange and the London Stock Exchange.

Following its analysis, Investec produced a discussion paper, which detailed the increasingly competitive environment in the racing industry, warning that the sale of TAB is the only way of preventing a dip in its value and the resultant decline of the racing industry itself.

“The potential sale is an opportunity for reform. If structured correctly, it could help address these risks and protect future funding to the WA racing industry,” said the report. WA Treasurer Ben Wyatt expressed his satisfaction with the report, adding, “We now have detailed analysis that shows a sale is feasible, and could be achieved while leaving the industry at least no worse off.”

However, the WA government has come under criticism for spending money to obtain an obvious conclusion, particularly since a new report revelaed that the expenditure on Investec amounted to $440,000 in the latter half of last year. The figure dwarfs the expenditure on consultants for a review of health services (148,000) and spending in other areas as well.

Shadow Racing Minister John McGrath said, “It is disappointing that after 18 months the McGowan Government is no closer to a solution. It has spent a considerable sum of taxpayer money to basically take the same position to the industry that we did — that ongoing funding of racing from wagering revenue would be guaranteed under any privatisation deal and that a sizeable infrastructure fund should be put in place to meet future industry needs.”

Meanwhile, the consulting firm has come off the better for the deal, and is expected to continue its growth domestically in South Africa, given the rising levels of private wealth in the country and the consequent rise in the demand for wealth management services.