Wendy Wedge, Peter Logan, Julianne Bell and Kevin Summers have each written articles on Melbourne big spending major events such as the Grand Prix and the Commonwealth Games which both appear to have serious problems.

By Wendy Wedge

One can feel a great deal of sympathy for the protestors who have been religiously opposing the Grand Prix in Melbourne since before it started.

There they are beavering away with logic, petitions and meetings not realising that they were never going to be quite as effective at derailing the race as the system that created it.

One of the tiresome things about the left is that their attempts to revolutionise, destroy or just change things are always so ineffectual in comparison with the sheer revolutionary energy of capitalism. As Schumpeter and others noted: it changes things all the time through creative and other forms of destruction.

The Albert Park people have been after Ron Walker, Bernie Ecclestone, Jeff Kennett and Steve Bracks for ages. Basically they’ve got nowhere.

But F1 itself may be about to turn all that upside down. For about a year The Economist (crikey has reproduced many of the articles) has been investigating the strange finances of Mr Eccleston and the curious structure of F1 racing.

Earlier this year is got stranger still when Bernie seemed to sell F1 the Kirch Group, a German media group headed by Leo Kirch for $US1.5 billion. Kirch is now in trouble and may be bought out by our Rupert and FI is adding to his problems.

You see the F1teams put in lots of money but got very little back and don’t get any of the ad revenue. The teams think they should have more and now want to set up their own series (a bit like Kerry and cricket actually) from 2007 when Kirch’s licence expires.

Nobody is quite sure what will happen beyond the fact that whatever does Bernie will make a quid out of it.

The betting is that a resolution similar to the rapprochement between Kerry and the ACB would be the way to go.

With more people sharing the available money someone may have to pay more most probably the venues and others.

And if the new F1 series people come knocking on the Victorian Government’s door asking for more what’s the betting that they’ll not only get it but that it will be tied up in some sort of secrecy agreement which prevents the taxpayers knowing precisely how much it’s costing them?

No doubt if Victoria, on the other hand, loses the Grand Prix we’ll just have something else or we’ll just in true Victorian fashion whether Kennett or Bracks is in power change the name of Albert Park.

As that revolutionary who was so less successful than Adam Smith, Karl Marx , said: “Man’s innate casuistry! To change things by changing their name!”

Feedback direct to Wendy at [email protected]

Bracks spends a billion whilst opposition asleep at the wheel

The opinion poll driven “Jeff’ Bracks will have put over a billion dollars on state debt by the end of this decade from his reckless spending on two major events, the Commonwealth Games and the Formula 1 Grand Prix. Unfortunately in Victoria the innocuous opposition is unable to understand the real implications of this unproductive expenditure which must result in increased taxation and/or cuts to education, health and state infrastructure.

The Age’s Royce Millar gave us a wake up call when he estimated the total public cost of the Commonwealth Games to be greater than $624 million (The Age 26/11). This accords with Ron Walker’s comments in The Age on 2/4/01 where he estimated the cost at $700 million but Walker has now claimed in an unquestioning puff piece in The Age on 1/12 that he will turn the finances around by selling the TV rights for the British Commonwealth Games to China!

We should be alarmed that the cost has risen by around $500 million five years out from the event. The cost overruns can and must be reversed, for example the $50 million pool at Albert Park is a total waste of money given the existing five pool complex was (according to the Kennett government) “designed to accommodate all levels of competition, 05state and national championships and international competition.”

Are we ignoring the lessons of history? Ron Walker made some unnervingly similar statements about the Formula 1 Grand Prix. He claimed that it would cost only $10 million to establish the course and the event would run at a profit, paying off the initial investment. It has transpired that well over $100 million sits on state debt because of this event, the set up/pull down cost now runs at $17 million per year, and the total losses have been predicted at $262 million by the end of the contract (The Age 5/3).

Bracks needs to act quickly to rescue the Commonwealth Games or the words of Dr Mike Nahan, the Executive Director of the Institute for Public Affairs may haunt him: “Most of these events like Grands Prix and the attractions of the Commonwealth Games are basically a con job. Most of the evidence is that they are not economically rational.”

Bracks won office by targeting country Victorians with the message that Kennett had spent huge amounts on major events while neglecting country Victoria. The opposition in Victoria meanwhile is either asleep at the wheel or too timid to raise the issue. Is this because they created the problem while in government? Apart from Royce Millar’s article in The Age no one dares to speak about these avoidable overspends. Such is the power of Ron Walker and vested interests such as Crown Casino.

Footnotes: The pool quotation was from the MSAC Brochure, 1995 Written by Dept of Planning and Development, construction Dept of Major Projects. The Dr Nahan quotation was from Radio National in 1995, and Royce Millar confirmed this with Dr Nahan in preparing his article.

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Coroner opens can of Grand Prix worms

By Kevin Summers

Member of Save Albert Park

While Victoria’s State Coroner has refused to endorse safety facilities at the Australian Grand Prix at Albert Park, he has intimated to race organisers that his recommendations will not unduly hinder their March race preparations. Graeme Johnstone’s balancing act invites reflection upon the genesis of the event in Melbourne and where it is headed.

Tracing its local origins is a remarkably simple matter. Business identity Ron Walker, a former Lord Mayor, convinced his friend, Premier Jeff Kennett, of the feasibility of levering the race from Adelaide and bringing it to Melbourne. The idea appealed to Kennett for its boldness and breadth – the chance to show Victoria as dynamic and vibrant. It was a two man operation.

Walker, of course, had to negotiate with the hard-nosed Formula One boss, Bernie Ecclestone, needing to assure him that Melbourne had a venue superior to Adelaide’s street circuit. He proposed Albert Park, which had hosted motor racing for a period in the fifties before the Bolte Government terminated it as inappropriate for the space.

Herein lies the problem which has come to a head with the inquest into the death of track marshal, Graham Beveridge. Despite the enormous amount of capital which has been pumped into converting the area to accommodate the staging of the event, the park environs were simply never sufficiently large to guarantee the safety of those in attendance.

Melbourne’s dilemma was summed up by the on-line motor racing magazine, Formula 1.com, in September: at Albert Park “spectators are very close to the action as the course is made up of natural roads and so does not have the safety measures that some purpose-built circuits include.”

The spectators, standing or seated, are simply too close to the track. Raising the height of the mesh fences won’t solve this problem. Former Austrian ace, Gerhard Berger, then the drivers’ spokesman, opined in 1996 that parts of the track were too close to fences. Former champion, Finland’s Mika Hakkinen, has stated that the track is very difficult to drive on. The governing body, the Federation Internationale de L’Automobile (FIA) is aware of these problems and has listed the March event as provisional, subject to the Coroner’s findings.

A purpose built circuit would have at the very least minimised these difficulties. Spectators would have been placed beyond what would reasonably be foreseen as dangerous situations. Formula One’s other street circuit, Monaco, differs from Albert Park in that the stands are situated well away from the track which winds through the city, while many people watch from vantage points above the street. Moreover, Monaco is the slowest of all circuits and presents few passing opportunities, a situation which negates the possibility of really high speed collisions

Walker and Kennett wanted the best of all worlds. They wanted a street circuit that would show off Melbourne to the world. They wanted it to be fast and exciting, a test of driving skill and tactics. They wanted the punters attending to have a graphic view of the dicing in comfort and safety. Perhaps they now understand that they couldn’t have it all.

Early next year The Coroner will hand down his findings. He will comment upon whether it was reasonably foreseeable that parts of a racing car would pass through the gaps in the fence. He most certainly will endorse the Grand Prix Corporation’s decision to effectively double the height of the wire mesh which forms the upper part of the fence.

He may spare a word or two as to whether shards of debris – rubber, aluminium or steel – can pass through the mesh at several hundred kilometres an hour after an accident. He may speculate on the capacity of this debris to cause serious injury or death.

It remains to be seen if Mr Johnstone turns his attention to what the Grand Prix Corporation wishes he doesn’t – the general safety of the circuit in comparison to other venues. Doubtless he would have viewed footage of how Formula One cars behave in an accident. He would realise they behave erratically. While their construction serves to protect the drivers – it’s hard to forget Martin Brundle stepping out of his wrecked machine and running to grab the spare car at Albert Park in 1996 – they cannot be guaranteed to stay within the confines of the circuit.

Indeed, Brundle’s car hurtled skywards, as have others. Some have vaulted over safety barriers. It’s no leap of imagination to appreciate the outcome of such an occurrence at Albert Park with the crowd – standing, in stands or in corporate tents – crammed so close to the track.

And that is the nub of it. During the inquest, the GPC’s counsel, Ross Ray, QC, was quick to accuse counsel assisting the Coroner, Jim Kennan, QC, of leading a witness, a race marshal, when Kennan questioned the man about general aspects of track safety, Kennan responded by acknowledging Ray’s sensitivity on the issue. The Corporation’s fear is that the track will be exposed as not only as outside FIA safety guidelines but unfit for racing.

The coronial enquiry has opened a can of worms for the organisers of the Grand Prix. They will need to exert all of their celebrated influence around town to put the wrigglers back. But the grandees from the Geneva offices of the FIA, who have shown a marked reluctance to have anything to do with the Melbourne proceedings, will be having a good hard look at the Coroner’s final words.

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BRACKS PLAYS GAMES WITH VICTORIA’S FINANCES

By Julianne Bell

Convenor Royal Park Protection Group, Parkville

I am sure many subscribers will welcome the fact that Crikey is turning his blowtorch onto the subject of the Bracks Government’s profligate spending on the 2006 Commonwealth Games. Witness the article in the Crikey bulletin of 30 December 2001 by Peter Logan and Kevin Summers entitled “Bracks’ $1 billion overspend while opposition asleep at the wheel”.

This article quotes Royce Millar’s excellent feature in the Age of 26 November 2001 on the cost of the 2006 Commonwealth Games to Victoria. Summers and Logan concentrate, however, on the coronial enquiry into the accident at the 2001 Grand Prix. I would, therefore, like to make some further comments on the Bracks Government’s lavish spending on the Games. This might be boring to anyone but Victorians but Crikey subscribers from other states or territories should thank their lucky stars that the Games will be held in Melbourne.

What was not made clear in Summers and Logan’s article is that the initial estimate given by the Kennett Government for the Commonwealth Games of $194 million, which has now blown out to $500 million, was for STAGING the Games alone. Royce Millar made the point in his article that the “public outlays on venues constructed or refurbished in time for the Games” have not been included in the estimates. Sports Minister Madden said by way of excuse for NOT including the cost of construction of facilities was that “they had already been built” or “they are already there”. All the Games facilities have been or are being custom-built specifically for the Commonwealth Games. These are:

– The State Netball and Hockey Centre in Royal Park = $27 million plus, already constructed after the Kennett Government enacted the Royal Park Land Act 1999, thus aborting the legal challenge made by the Royal Park Protection Group to the alienation of Crown Land in Royal Park. The Centre was specifically built as Commonwealth Games hockey and netball venues;

– The Vodaphone multipurpose stadium in Melbourne Park = $55 million

– The second Aquatic Centre (the so called “competition pool”) at Albert Park to be built on the carpark of the existing Melbourne Sports and Aquatic Centre = $50 million;

– The upgrade and expansion of the MCG in Yarra Park, which will include demolition of the heritage Members Pavilion and all buildings except the Southern Stand = $442 million. (This is not mentioned as a separate item by Royce Millar although he did list the $20 million cost for a running track and the $90 million funding contribution to be provided by the Federal Government);

– New lawn bowls centre = $2 million (the location was to be in the Eastern suburbs under Kennett, now moved by Bracks to the Northern suburbs);

– The Games Village = $275 million quoted by Sports Minister Madden’s senior adviser on 14 November 2001 but said by Royce Millar to be $30 million. A third quote in an Age article put the cost of the Village at $2 billion (I am not sure the reason for the disparity but they are wildly at odds with each other). The location has not yet been decided and the developer named but the battle to prevent the Village being built in Royal Park continues under the banner “Royal Park No Place for a Village”(The Docklands or Jolimont railyards are considered more appropriate);

– Other venues have yet to be decided for the Shooting Range and the Triathalon course. The Opposition is seriously lobbying the Government for locations in or near Geelong;

– After criticism of the failure to consult either the community or local government over the draconian Commonwealth Games Arrangements Bill which was fast-tracked through Parliament last October, the Government is setting up a veritable plethora of “Advisory Committees” one for each of the venues and village. The MCG Redevelopment Committee Panel of 3 persons has already met and submitted a report. Minister Madden told Parliament that their fees amounted to $1,200 for 3 hours. This was funded from the Department of Sport and Recreation’s budget. How many Advisory Committees, with how many panel members, will meet for how long and how often? And what will this cost?

The Government admitted in parliamentary debates on the Commonwealth Games Arrangements Bill that there is no “budget” yet. The figures are incredibly rubbery and in fact it seems that every time one blinks costs quoted for specific venues appear to have escalated For example, with regard to the Albert Park No 2 Aquatic Centre in October the quote was $42 million now it is given as $50 million. Does this include a new multistorey carpark?

What are the hidden costs? One can only speculate what the “war” over the bidding for the Commonwealth Games cost. Ron Walker (or the Victorian taxpayer) hosted delegations from approximately 70 Commonwealth countries to show them Melbourne and the proposed venues for the Games and, presumably, to secure their votes. As it turned out Melbourne was the only bidder as Wellington NZ withdrew. Hence Melbourne “won” the Games. As far as hidden costs associated with the village go – the “Parkville site” preferred by the Government (and Ron Walker) for some extraordinary reason is isolated, remote from public transport, next to Tullamarine Freeway and is too small to accommodate a village for 6,000 athletes and retainers. If selected it will require installation of a huge fleet of buses to ferry Games participants about and, after the Games, a network of public transport services will have to be constructed to service the mini suburb/huge residential complex created on the site.

I am quite willing to be challenged on the costs quoted as they appear entirely rubbery and seem to go up every month. It has been impossible to obtain material as it is regarded as “commercial in confidence”. For instance the brief for the Games Village cannot be released. The public was, however, able to gain some information from the Parliamentary debates on the Commonwealth Games.

The extraordinary spending on sporting circuses is part of a wider malaise affecting Victoria. It is evidence of the power of interlocking interests of sports administration, big business, the construction industry, gambling and government with domination by several key sports/business supremos. In America there is a growing revolt against the building of super stadiums in cities with the loss of public open space and alienation of parkland. The loss of local community, low-cost sports facilities in Melbourne is becoming apparent. These are being replaced by elite, corporate sporting facilities with TV capacity. To express opposition or even criticism of the Games, however, results in accusations of being anti-sport, un-Victorian and even un-Australian.

As far we know there has never been any published analysis of the economic benefits of the Sydney Olympics 2000. Nor do we know how Manchester is faring with preparations for 2002 Commonwealth Games. The last we heard was the city was trying – but failing – to raise $220 million in sponsorships. Melbourne will have to do better than this. In his article Royce Millar quotes Ron Walker as saying that the Games are a “Commonwealth family event.

It’s a sporting event mixed up with culture” Can we afford to belong to such an expensive family?