As promised in blog posts we have reviewed the Tourism Victoria and Ernst and Young Grand Prix economic assessment. We believe the Grand Prix does not provide a net benefit and in fact reduces the welfare of Victorians. Tourism Victoria’s claim that “Hosting the Formula One Australian Grand Prix brings significant benefits to Victoria” is not based on any calculation of net present benefit.
Read the original reports here and Here then find out why they’re wrong here.
Excellent work Rod. Although I’ve never met you and certainly not paid for this peer review, I have submitted it to the Victorian Auditor-General as part of a comprehensive critique of the Victorian Government’s misleading and deceptive claims on the grand prix in Albert Park.
You are excellent at picking the flaws in the assumptions in the Ernst and Young report and the government’s spin in its summary but there is one further problem with the key multipliers: My study of every annual report of the GP corporation shows the ticket revenue has declined significantly over the years and at current level it indicates a “patronage” figure of less than 60,000. The Ernst and Young report used a figure in excess of 109,000. That’s either a hell of a lot of free tickets or it’s a fiction.
This means the two key multipliers are inflated.
We may be looking at a grand prix that delivers almost no economic “impact” as well as no benefit. The Auditor-General’s peer reviewed cost benefit analysis of the 2005 event already showed the event to be a net loser for Victoria and Australia.