The escalating cost of the Australian Grand Prix has been placed squarely at the feet of the previous Victoria State administration as politicians attempt to explain away the $50m bill settled by taxpayers in 2011.
The Albert Park event has been walking a financial tightrope for several years, with doubts continuing to circulate over its future viability, and the figures released by current tourism and major events minister Louise Asher will do little to assuage either the fears of race fans or the ire of taxpayers who resent their money being spent in what they regard as a frivolous manner, especially as the 2011 race produced only $39m of economic activity in return.
With every event on the F1 calendar being subject to an annual escalator when it comes to the fees that need to be paid to the Bernie Ecclestone-led Formula One Management, the initial cost of staging the Australian GP in Melbourne has risen from $4m to $439m in just ten years. Highlighting the rocketing price, local taxpayers paid 'just' $1.7m for the 1996 event...
Asher insisted that while she felt uncomfortable with the amount of money being drawn from taxes, she said that her hands were tied when it came to renegotiating a deal with Ecclestone.
“I am not comfortable with this level of subsidy,” Ms Asher, part of the current coalition administration, admitted, “The event is a good event [but] the contract is a typical Labor contract.”
Asher was speaking after the release of a report on the Australian GP, commissioned by the new administration and completed by accounts giant Ernst & Young. She insisted that the report was part of the coalition's bid for transparency, and had been published despite the less-than-happy picture it painted.
"The Victorian Coalition government has delivered on its promise to commission a comprehensive study of the economic value of the grand prix for the state, and to make that report publicly available," Asher said in a statement, "The former Labor government commissioned a similar study in 2008 [but] refused to release the study publicly.
"The Coalition government is committed to delivering greater transparency of the costs and benefits of events that are supported by taxpayers' funds, [and] we have also demonstrated transparency by introducing ten documents related to the grand prix into the Legislative Council and the annual report, when complete, will be available online for the first time."
The Ernst & Young study estimated that the 2011 grand prix increased Victoria's real GSP by between $32-39m and generated between 351 and 411 full-time equivalent jobs, while a separate report, carried out by Comperio Research into the branding value of the 2009 GP, estimated that it provided a media or advertising-equivalent value of over $35.6 million to the state of Victoria.