Australian GP under attack over skyrocketing government costs

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Taxpayer costs to run the Australian Grand Prix have shot up in recent years, and a new report on the price tag — almost $50 million (Australian) for this season’s race — has sparked debate about the value of the race.

The Age, down under, has the story:

From a moderate Victorian government contribution of $3.2 million in 1998/89 — the cost to taxpayers has skyrocketed 15-fold to $49.3 million for this year’s event.

[snip]

In 2006 the event attracted sales of $35.6 million — this year it slid to $24.5 million.

During the same period, costs climbed from $68.8 million to $80.3 million.

The massive cost to taxpayers has been savaged by independent state MP Craig Ingram, who labelled the cost ‘‘embarrassing’’.

‘‘I think it is just outrageous, it has gone past a joke and it is time both sides of politics started to seriously reconsider the ongoing cost of taxpayers bailing out of this event,’’ he said.

‘‘The cost of $49 million for a car race when as a local member of parliament we struggle to get funding for health services, education, support services for disabled kids at schools, for roads and other infrastructure — I just think there is a whole range of services and other infrastructure which need that sort of money more than a car race,’’ he said.

[snip]

But Major Events Minister Tim Holding said the event was good for Victoria.

‘‘The economic benefit to Victoria far outweighs the cost of staging the Formula 1 Grand Prix,’’ he said.

‘‘The race was seen by about 12.8 million people in Europe this year and the massive television exposure that the Melbourne Grand Prix receives has helped to build our world-wide reputation as a great place to visit and a great place to live,’’ he said.

You won’t be surprised to hear that Mark Webber’s name comes up in the story — expectations are high that next year’s race could be a winner following Mark’s great season.

The root of this issue seems to be the general economic downturn and the resulting limited government revenue — and therefore money to spend. (Hi from California, where we are old-timers at this issue already!) One side of the debate, as critics have it, are millionaire drivers. On the other? The poor and needy.

It is a debate I expect us to hear over the next couple of years out of Texas, where race opponents there will seize on government assistance for a billion-dollar sport.

Now, we all are too aware how Bernie Ecclestone has favored locations for new grand prixs in countries that are willing to hand over increasingly large pots of money. Push back from places such as Belgium and Germany (even Monte Carlo) have caused us all no end of hand-wringing and heartburn.

This story, though, is framing this issue differently for me — and if we’ve discussed it before, apologies for not remembering. But it seems like Bernie’s targets, while having to be willing to fork over money, more so have to have, shall we say, a stronger, centralized government. That isn’t quite what I mean, but simply saying, “It’s a lot easier to work with kings/dictators,” feels a little too general. (In my usual defense, it’s not quite 5:30 a.m. where I’m at and the brain pistons are still warming up.)

My point, though, becomes: Isn’t it easier for Bernie to add a Bahrain or Abu Dhabi and drop an Australia, where opposing political leaders could come into power and wreck havoc with his arrangements? (Figuring it is easier to throw out one party in a democracy than overturn a government.) Or even where debate might bring negative press to F1?

Well, now I’m wandering off. I’m not suggesting something new or exclusive, but it just seems — reading this story — that Bernie’s Big List of Needs for a Site Wanting to Host a Grand Prix might include near the top “guy with all the decision-making power” as well as “money they are stupid enough to give me.”

And that just means we can keep worrying about Spa and Silverstone, etc., even with long-term contracts in place. Because we all know just how much F1 agreements are worth.

But back to Melbourne. Any readers from Australia seeing this story? Is it causing any stir or is it a typical “opposition party takes opportunity to blast ruling party” event?

And, finally: Is having a grand prix worth 50 million — Australian, U.S., euros, Pounds, etc.? Or is F1 pushing its luck?

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