The Melbourne Cup brings out “the punter” in hundreds of thousands of Australians who only have one bet a year. It is nice to know that those few people who actually finish the day richer do not have to pay tax on the spoils of their good luck.

Such is not the case for those Australians who prefer to have a punt on what the share market is going to do. “Winnings” from trading shares are taxed and they are fully taxed if held for less than 12 months.

The sharemarket can be a bit like a race track (so can the property market) but I think there is a very wide misunderstanding that everyone who operates in the market on the same day is driven by the same motives.

I have been a shareholder in BHP since 1969. I have never sold any BHP shares and do nor expect to do so in my lifetime. I object violently to being described as a punter if I chose to top up my BHP holding by buying some more of their shares – not because I thought they would go up next week but simply to add to my holding. The person who sells to me today may very well have bought last Tuesday (with borrowed money) and is happy to take a modest profit.

Some people do gamble on the share market. The paper can call them punters!

The fact that income tax is not paid on winnings from the racetrack but is paid on winnings from the sharemarket sounds good.

However bookmakers do pay turnover tax and so does the TAB.