Production of Documents: The Australian Grand Prix | Sue Pennicuik

Production of Documents: The Australian Grand Prix

Members will know that I have moved similar motions before in former years in this Parliament calling for various governments — in fact every government since I have been in the Parliament — to release the grand prix documents to the public, in particular the contracts which the government signs on behalf of Victorians, signing up Victorians to spend hundreds of millions of dollars on this event.
Wednesday, December 13, 2017 - 9:15am
Sue Pennicuik

Ms PENNICUIK (Southern Metropolitan) (15:09:54) — I move, in amended form:

That, in accordance with standing order 11.01, the Leader of the Government table in the Council by 12 noon on Tuesday, 20 February 2018 —

(1)   the contract, in full, signed by the Napthine government to host the Australian Formula One Grand Prix in Melbourne from 2016 to 2020;

(2)   the contract, in full, signed by the Andrews government to host the Australian Formula One Grand Prix in Melbourne from 2021 to 2023;

and any response should conform with standing orders 11.02(3) and 11.03(1)(a).

For the information of the chamber, I have moved an amended motion only in that the date for the tabling of the documents has changed from October this year to February next year.

Members will know that I have moved similar motions before in former years in this Parliament calling for various governments — in fact every government since I have been in the Parliament — to release the grand prix documents to the public, in particular the contracts which the government signs on behalf of Victorians, signing up Victorians to spend hundreds of millions of dollars on this event. In fact this year, 2017, we had the most expensive grand prix ever. That is in the context of the cost of the grand prix escalating and increasing every single year, certainly since I came here in 2007. In fact if you go back to 2007, what is called the government contribution was nearly $35 million.

In the first few years of the race it was only around $3 million, $4 million, $7 million — that type of contribution. But this year, 2017, the grand prix cost taxpayers an incredible $97.2 million to stage, nearly $100 million, but only managed to raise $32 million in ticket sales and $8 million from so-called 'other sources', leaving Victorian taxpayers to cover the event with a $57.12 million contribution. The cost to taxpayers could be even higher for this event because buried in the Australian Grand Prix Annual Report 2017 are the contributed capital and the cash flow hedge reserve, which total more than $40 million, and they are listed in the notes of the financial statements. That is actually a cost that is transferred from the Australian Grand Prix Corporation to the taxpayer, again taking us back to the fact that $97.2 million of taxpayers money has been spent on one race that goes for two days in Melbourne. Of course this money is going overseas into the pockets of already very wealthy individuals, and I will get to that in a minute.

The last six grand prix events have cost taxpayers around $350 million. It is an absolutely scandalous waste of taxpayers money that both Labor and Liberal governments have presided over for 21 years. Bearing in mind that even if we just talk about current costs and not what we expect, which is that they will go up every year, if this continues the grand prix will cost Victorians at least another $250 million in the next five years. That is $600 million if added to the last six years. In fact my calculations are that from the start of the grand prix to now the grand prix has cost Victorians $1.4 billion — $1.4 billion!

Mr O'Sullivan interjected.

Ms PENNICUIK — No, that is the net cost. That is the cost after what it has brought in, Mr O'Sullivan. Get your figures right — through the Chair.

That is the cost to Victorians — $1.4 billion — which could be spent, firstly, on other sporting and cultural events in the community that do actually bring some benefit to the community and, secondly, on other things like much-needed public housing. We are told we do not have any money for public housing, but we have certainly got another $250 million, if the contract runs through to 2023, to spend on a grand prix.

Victorians are totally sick of hundreds of millions of dollars of their money being squandered on this event every year for the sake of a dwindling number of spectators and absolutely no benefit to the vast majority of Victorians. As I have raised in this place many times before — and I have asked the government to do something about this — the Australian Grand Prix Corporation is not even required to accurately count the number of attendees, like all other sporting events do, despite the massive cost to taxpayers. It just estimates attendances every year. This year's estimated attendance of 296 000 fans is not believable or independently verified. It is physically impossible for that number of people to have attended the grand prix. If you look at the photos of the first day, there is hardly anyone there. They would be lucky if there were a couple of thousand people strolling around in the vast expanse of Albert Park.

Mr O'Sullivan — Have you been there?

Ms PENNICUIK — No, I have not. I have certainly been outside protesting against it. The actual stadium can only hold a certain number of people, and over two days that adds up to about 140 000 if it is full, which it never is. Yet the government, the grand prix corporation and the media all trot out this estimation that 296 000 people have attended. It is just physically impossible, and it is just a lie. It is scandalous that they are allowed to get away with this and are not required to put in barcode counters and actually count how many people attend the event. They can do it at the cricket. They can do it at the football. They can do it at any other event. At the tennis and at rock concerts they know exactly how many people are there. But, no, the grand prix corporation just makes it up every year. It is completely scandalous. They should be made to be fully accountable in this regard, but both governments have refused to act on it.

This motion is about the government becoming more open and transparent about this secretive event and releasing documents to the community. It is interesting that the new boss of the Formula One Group, Mr Chase Carey, who has taken over from Bernie Ecclestone, whose pockets Victorian taxpayers have lined for the last 27 years, has said that a decision about making the hosting fees and the contract more transparent would be fine. He is actually not opposed to releasing the contract. As I have said before, contracts are actually released in other countries; it is only in Australia that they are not.

I also thought it was quite funny that so-called Aussie Formula One ace Daniel Ricciardo said that he did not know the ins and outs of Melbourne's race contract but agreed that taxpayers deserve to know how much they were tipping into the event. He said, 'I don't really understand why the secret'. Thanks, Daniel. It is good to have support from someone who is actually involved in the event and understands that taxpayers should know how much money is being forked out in these contracts.

One of the most interesting things in the contract is what the exit fee would be if we were to negotiate our way out of the contract to prevent Victorian taxpayers having to put another $250 million into this race. That is certainly something people are interested in.

Earlier this year I asked the Minister for Tourism and Major Events if he would release a report by Ernst and Young and the Victorian Major Events Company into the Australian Grand Prix Corporation. The minister replied that he was unable to provide a copy of that report because it was commercial in confidence. The government is always going back to commercial in confidence.

In terms of this event there is only one provider, which is the Australian Grand Prix Corporation and the international Formula One federation. There is no other provider. It is not as if there is a competitive tendering process for who is going to provide the Formula One grand prix in Melbourne. There is also no other state that wants this event. The government are always saying it is commercial in confidence and they have to keep it secret because other states might want to host the grand prix. Who would want to host a race that is going to cost them $97 million per year? Nobody does. Years ago they may have, but now, with the escalating costs, it seems impossible to run this race for anything less than $70 million, $80 million or, as was the case last year, $97 million. What other state would want to take that on? No-one would want to take that on.

This year the Minister for Tourism and Major Events called for an evaluation of the holding of the Logies and decided that after 30 years and $30 million the cost to stage the Logies could not be justified. I thought, 'Wow, that's nothing compared to the cost of the grand prix'. I asked him if he would do a similar evaluation of the grand prix. Certainly it would have to come back saying there is no benefit to Victorians and there is an awful cost to taxpayers every single year with the staging of this event. But he refused to do one.

I will finish on a historical note. Back in 2007 the Auditor-General did look at the grand prix and concluded that it provided no discernible benefit to Victorians. The whole idea that it provides incentives for tourists to come to Melbourne was not supported. There is absolutely no evidence for it, and I think everybody can understand that that is entirely the case. People overseas may watch the event, but they do not all then come flocking to Melbourne.

At the time, the Auditor-General said there should be a proper cost-benefit analysis conducted on the grand prix. The Premier at the time, Premier Bracks, told Parliament that he supported the findings of the report and would specify more the value of those events to the community and the environment more broadly. Nothing has happened in the 10 years since, except that the cost of the race has escalated every single year. It is now around $1.4 billion that taxpayers have spent on it, and I think the taxpayers of Victoria are entitled to know what the contracts are and what is in them.

I should say the costs that I am talking about are only the ones that are actually released in the Australian Grand Prix Corporation annual report. There are a whole lot of other hidden costs, so the figures I have been citing are the minimum amount that Victorian taxpayers are contributing to this outdated and anachronistic event. I call on the government to release the documents that I ask for in the motion.

The motion was agreed to.