Australia is on the verge of securing the “right” to hold another Olympics, without any assessment having been done of whether taxpayers — either in Queensland, or the rest of the country — will get any benefit at all from the money to be spent on Brisbane 2032.
Indeed, the selection process that looks set to deliver the games for Brisbane — in the absence of any other city being particularly keen on them — has proceeded to general apathy.
Federal taxpayers will be on the hook for half the costs of mounting the games following an April deal between the Morrison and Palaszczuk governments. But what the costs will be aren’t clear: a 2019 study by the Queensland government optimistically concluded: “organising committee costs for the Olympic and Paralympic Games of $4.45 billion could be delivered at no cost to the state, taking into account International Olympic Committee (IOC) contributions and domestic revenues.”
That was before the Palaszczuk government decided to throw $1 billion at yet another upgrade of the Gabba. And Olympic games famously have a reputation for cost blowouts.
But what of the benefits that will accrue? According to recent media reports, the games will produce “a total benefit of $8.1bn for Queensland and $17.61bn for Australia”. That’s the result of an “independent assessment”. Crikey’s hackles immediately went up at the use of “independent assessment”, especially given it occurred in a News Corp tabloid.
The “independent assessment” was commissioned by the Palaszczuk government’s department of tourism, with KPMG asked to prepare a “preliminary economic, social and environmental analysis” for the government’s Olympics taskforce — using information mainly “provided by the taskforce”.
The first thing to note is that the actual economic benefits aren’t $8 billion and $17.6 billion but half that: $4.6 billion for Queensland and $8.5 billion nationally. The rest are “social benefits” — benefits that might be “intangible” but which KPMG totes up to double the total benefits.
What kind of social benefits will deliver billions of dollars for Queensland and the nation? Well, there’s “legacy, community spirit, prestige and civic pride associated with hosting a games” for residents. There are health benefits from “leveraging a 2032 games to increase participation in physical activity” which will lead to happier, more productive Queenslanders (too bad there’s no strong evidence that major elite sport events boost participation).
There are even volunteer benefits which “include those that accrue to volunteers themselves (such as self- improvement and altruistic value) and the benefits that accrue to the broader community (such as the increased likelihood of future volunteering)”.
These add up to another $9 billion in benefits. The consultants, however, rigorously decline to calculate the benefits from other intangible likes “civic pride and social cohesion”, “elite sporting pathways”, “partnerships with industry and government” and “diversity and inclusion”, which — who knows — could have added billions more.
For the heartless among you who don’t accept that the warm glow of volunteering for the Olympics, or enjoyment of the “community spirit”, is worth billions, there remain the economic benefits.
KPMG says they’re made up of extra tourism and extra trade. Except the extra tourism is problematic — actual evidence that Olympics boost tourism is scant. The Beijing and London Olympics led to significant falls in tourism, KPMG admits, while “no support for the existence of an induced tourism effect was found in a retrospective study of the Sydney 2000 Olympic Games”.
Despite the dearth of evidence, “KPMG has adopted a balanced view of the potential games-induced tourism uplift where we have assumed that stakeholders in the industry will work together to maximise the potential returns”. As for the increase in trade, that’s based on a government assumption, which KPMG declares “is a reasonable projection”.
What about the economic disbenefits? Well, apparently they’ll be managed away: KPMG says they “are anticipated to be mitigated through a range of policies, mechanisms and interventions”. In any event, “delivery of the 2032 games will entail disbenefits in the form of economic opportunity costs associated with operations and legacy infrastructure. Preliminary analysis indicates that the economic and social benefits of hosting the 2032 Games outweigh the disbenefits”.
We don’t get to see that analysis, or know by how much they outweigh them. Enough to offset the billions the Queensland government will spend, even before the cost blowouts? We’ll never know. We’re acquiring an Olympics that no one else in the world wants, without even having done a proper cost-benefit analysis. Bread and circuses, as always — although in this case the circus includes the “independent assessments” beforehand.