The Labor spin doctors have successfully hoodwinked the mainstream Australian press about the true cost of the games, which is now likely to come in at $2-3 billion, well above the $1.5 billion claimed by Bob Carr two weeks back.
It is interesting that 5.5 million ticket sales out of 8 million can somehow be 85 per cent. Maybe all the corporate and “Olympic Family” tickets are included as “sold”.
Anyway, we’ve reworked and updated an earlier piece we ran on Crikey about the real cost of the games so here it is:
Having listened to Bob Carr being interviewed by Laurie Oakes on Channel Nine’s Sunday program in early September, there are a few urban myths that need to be dispelled. The NSW Premier spoke total drivel and it is amazing that he can get away with it.
Firstly, if you want to check out the full Bob Carr transcript go for your life but if you just want to see the edited highlights stick with us here.
Let’s open with some stats from Bob that we presume are right:
CARR: This is the biggest peacetime event. There’s nothing like it – seven hundred thousand visitors beginning to arrive in our city, more athletes than any previous games. They’re … the eyes of the world literally on us, as there’ll be three-point-five billion people watching that opening ceremony. It’s a huge … a huge undertaking.
OAKES: Well, there’s been controversy surrounding this virtually since Sydney got the nod. Will the brawling and the bungling and the embarrassing headlines continue through the Games?
CARR: I think it should stop as of now. That Olympic Village is filling up, even as we speak. The world is here. NBC alone has two thousand journalists here this week. There will be a total of twenty thousand in Sydney when the Games start. Now, this is a great opportunity for Australia. Australia is a regional, or middle power. No one in the northern hemisphere in cabinet rooms or boardrooms spends a lot of time thinking about our welfare. This is a once in a lifetime opportunity for us to project the success story of modern Australia to the world. It’s the best advertisement a city, a nation, can conceivably have. And I think it’s now time to set aside any bickering or any arguments or any point-scoring and to work together to make these a great win for this country.
CRIKEY: He seems to be saying that we’ve all got to put a positive gloss on things. We would have thought there is no time like the present to accurately portray Australia to the world so we don’t mislead anybody. One of the pitfalls of Australia is the question of honesty and accuracy in Australian public life particularly when the NSW Right of the Labor Party is involved.
And doesn’t he sound just like that advertising man Jeff Kennett with this next gem:
CARR: If this works, as I think it can work, then we’ve rebranded Australia. People have seen Australia as the contemporary, competitive, environmentally advanced, successful multicultural society we are. I mean, the Australian nation is one of the greatest success stories the world has had in terms of nation building, and next year we celebrate a hundred years of the Australian nation. The point is, the Olympics is a platform to project our success to the world, and it’s Australia’s that’s judged, not just Sydney.
CRIKEY: And then we have this exchange in which Bob basically says the media should only run positive stories as part of this rebranding exercise.
OAKES: Now, you want everyone to pull together, to unite behind the Games. What do you mean by that? Are you just talking about political parties, or do you want the media to, sort of, accentuate the positive and eliminate the negative?
CARR: Both those. Both those. I think some of the … some of the criticism I’ve seen of the Olympics has been utterly nitpicking, almost as if the media’s been going out of its way to find something they could beat up a whinge about. Now, we’ve done very, very well. We’ve got sixteen brilliant new venues, they’re venues that are superior to those that have been seen in any other previous … in any previous Olympics. They are venues that are going to be here for all time, attracting major events, and they’ve been completed ahead of the schedule.
CRIKEY: Now let’s get into the first really big bullshit effort with this next line:
CARR: And here’s another boast: what previous Olympic host city or nation has paid for them – paid for them upfront – while actually reducing debt? These could be the world’s first debt-free Olympics. We’ve paid for these Games in full while paying off over seven billion dollars in state debt and other liabilities. We’ve actually retired seven billion dollars in debt and liabilities while we’ve paid for these Games upfront. Not only is there no debt after the Games, but our debt and liabilities have been significantly reduced while we’ve paid for the Games.
CRIKEY: The Carr government has the dodgiest accounting of any government in Australia. What Bob fails to mention is the grubby things they’ve done to pay for the games. To start with they have completely rundown public investment in non-Olympics infrastructure. Just take a look at the diabolical transport system and particularly the quotes from the former head of State Rail which can be read by checking out Hugh Riminton’s excellent Sunday cover story that accompanied the Laurie Oakes interview. You then have the issue of the issue of successive NSW governments jacking up annual tax revenue by more than 50 per cent since Australia was awarded the Olympics in 1993. NSW has gone from being below the national average before Carr took office to the highest taxing state by a margin of 10 per cent. And the claims about debt reduction are largely smoke and mirrors involving one-off assets sales, raids of public authorities and the convenient omission of certain liabilities. If you want an example of the dodgy financial deals, check out the $200 million they ripped out of the Mt Piper power station a couple of years ago using one of those infamous cross-border lease structures which are essentially a tax rort. And who could forget the way they turned NSW into the world’s biggest gambling haven by pouring a further 20,000 poker machines onto an already saturated market. They did this by clearing the way for pubs to have pokies and now NSW has about 100,000 machines when the whole of Nevada has only about 180,000. Then there is the raid on statutory bodies such as water and power companies which have been forced to neglect their own capital works to satisfy the multi-billion dollar Olympics budget. All of this to allow Bob Carr to go on shows like Sunday and claim he is a responsible economic manager. What a load of bollocks.
Games Cost: Just Halve The Real Figure, No-One Will Know
CRIKEY: And then we have the small matter of Bob appearing not to know exactly how much it is costing to host the games. Try these line and see if your bull-shit detector starts to make strange noises:
CARR: No. No. Here are the figures. We’ve invested … the public and private sector have put $3.3 billion into these vast new venues, these … the facilities at Homebush Bay and elsewhere, the sixteen great Olympic venues. So, that’s $3.3 billion of public and private sector money going into that. We’ve probably got about six hundred million dollars in additional tax revenue flowing to us as a result of this Olympic-driven activity. We’ve had to put another a hundred and forty million dollars towards subsidising the running costs of the Games. If you make all the additions and subtractions, the cost to taxpayers in New South Wales over five years has been about $1.5 billion.
OAKES: It won’t be more than that …
CARR: … $1.5 billion.
OAKES: It won’t be more than that in the end?
CARR: No. No. We’re beyond the period of financial risk. Now, that … that has been pretty manageable, and to think that we’ve done that without going into debt – we’ve built these facilities and set aside money for the running costs of the Games without going into debt and, indeed, while retiring seven billion dollars in debt and liabilities – is a measure of the state’s strength but also Australia’s strength.
CRIKEY: Oh yeah Bob, we’re going great guns with the dollar at US54.5c! And what happened to the gross figure of $6 billion that has been invested by the private and public sectors in the Olympics. Are you all of a sudden ignoring things like the $600 million tollroad linking the airport and the city. That’s right, the Eastern Distributor deal which Michael Knight is really proud of even though the private investors have made about 200 per cent on their equity in two years. Folks, the gross Olympic-inspired investment and operating expenses is about $6 billion. Yes, this is offset by television broadcast fees, sponsorship and ticket sales but you must remember that the Fahey government projected that it would cost $1.3 billion net to host back in 1993 when they won the games. Former NSW auditor general Tony Harris put out a report last year claiming the net cost had now blown out to more like $2.6 billion. Since then we’ve had several more blowouts in spending, disappointing ticket sales which have picked over the last few weeks and a $100 million-plus shortfall in sponsorship revenue. It was this blowout which inspired Carr, Knight and their SOCOG cronies to come up with their deceitful “Tickets for the Rich” scheme. So rather than believe Bob Carr, believe Crikey when we say that the Carr government will end up doubling the original budgeted $1.3 billion net cost of hosting the games. We reckon it is arguably a worthwhile investment, but let’s just be honest about how much it has really cost.
Bob’s bullshit debt reduction claims
And all this bollocks about reducing debt is a complete joke when you consider the massive tax hikes they’ve imposed on the people of NSW and the starvation of normal public sector investment. Whilst Victoria has been prudently reducing its net debt and liabilities from about $50 billion to $15 billion over the past six years, NSW now has an equivalent exposure of about $40 billion. Without the Olympics it would be closer to $35 billion. Is that what you call a debt-free Olympics. The fact of the matter is that it has in part been paid for by Japanese mums and dads. The NSW government appointed Japanese brokers to go door knocking throughout Japanese cities offering cheap bonds with pictures of the Harbour bridge on it. At its peak, we’d borrowed $6 billion from the Japanese market in 1997 as the Carr government rolled over truckloads of debt that might otherwise have been retired without the Olympics. Bob also conveniently ingores state-inspired liabilities such as the $1.6 billion shortfall in WorkCover which also has close to the most expensive premiums in Australia.
Don’t Mention The Bad Stuff: This Is A Branding Exercise
CRIKEY: We then get Bob refusing to talk about negatives on issues such as race relations and the power of the armed forces.
CARR: The New South Wales parliament has apologised not once, but twice. But as we’ve … as we go into this Olympic period, Laurie, I’m not going to maintain that argument. We’ve said that. That’s the New South Wales government position. I’m disappointed with the Prime Minister, but it’s not an argument I’m prepared to have in front of the world.
We’re all in this together as Australians: black and white; Liberal and Labor. Let’s make these a shining advertisement for the Australia we’ve built. Let’s show to the world what a contemporary, competitive, affluent, educated and environmentally advanced country we have created here, all of us have created. And that’s the opportunity for the Olympics, the greatest advertisement a country can ever have for itself.
CRIKEY: This approach of not debating negatives arose again later on.
OAKES Yes. Well, what about this bill before federal parliament about the use of the army in case of domestic violence or terrorism incidents?
CARR: But again, I’m not going to beat up a controversy that we don’t need to have. We’re …
OAKES: Do you need to have that bill?
CARR: No … I think a national government in a Federation should have the power to call out the army, but I do want a protocol that ensures the states are consulted. But it’s not an argument I’m going to press now that the world’s here.
OAKES: So … but, if the Labor Party in the Senate blocked that bill, would you be upset, or …
CARR: I’m expecting the government to accept … I’m expecting the government to accept some sensible amendments. I’m told it will … that that will be the case. And if it’s not the case, Laurie, it’s an argument I’ll set aside for the period when the last … after the departure of the last Paralympian in late October.
CRIKEY: If you thought that was bad, look at the way Bob completely ignored another question from Laurie about terrorism.
OAKES: Are there real terrorism concerns?
CARR: The … I believe that five years after these Games our experience will be like that of Barcelona’s: we’ll be getting more visitors into Sydney than we did even in these … even in this year, the year of the Games. We’ve already overtaken every other city in the world when it comes to conventions, we’ve got more conventions booked into Sydney for the next two years than any city. And we know that every convention visitor spends on average eight hundred dollars a day. And that fills a lot of jobs.
CRIKEY: Lastly, we have the laughable prospect of Carr giving Mickey Knight a big promotion for a job well down.
OAKES: What happens to Michael Knight, the Olympics Minister that you refer to in your famous diaries as the soft-voiced killer, I think the phrase…
CARR: Well, whatever you refer to him as – and whatever I referred to him as in 1988 – he is the one who has brought this all together. And one thing that will be … one message to emerge from these Olympics is that the hard decisions my colleague had to make have paid off. They’ve paid off not only for NSW but for Australia. And Michael’s not one to claim credit, but there’ll be a lot of credit owing to the Minister who pulled this all together. And I’ll find a job for him in the post-Games period that’s commensurate with that sort of ability.
CRIKEY: Pulled all what together Bob, it hasn’t happened yet. SOCOG is been a laughing stock that is making a last-ditch attempt at credibility. Michael Knight has his finger prints over many of the stuff-ups. He even made his mentor Graham Richardson mayor of the Olympic village which will be a national embarrassment if international journalists cotton onto his background. Mickey Knight should never have stopped being a head-kicking BLF Organiser from Campbelltown. He’s got the finesse of the proverbial bull in a china shop and if Bob is already looking at promoting him then one can only conclude that Tricky Micky knows where all Bob’s Olympic skeletons are buried. The tickets for the rich scheme was one of the most deceitful exercises ever perpetrated on the Australian public and Michael Knight was the chairman of SOCOG when it happened.