In a November 2015 post New 1,500 seat theatre would likely be a waste of taxpayers’ money, I questioned the desirability of a state government-funded $1.3M business case to investigate a new 1,500 seat theatre for Brisbane. At the time, I was criticised by the Courier-Mail’s Paul Syvret for seeing things through a “coldly commercial prism” (see this post). But based on today’s news, I feel even more strongly that my comments at the time were justified. Following Premier Palaszczuk’s announcement yesterday of a new $150M theatre being tacked on to QPAC, today’s Courier-Mail reports:
A market-led proposal by Sydney-based Foundation Theatres for a $100 million theatre on the old State Library site adjacent to Queen’s Wharf has been with the State Government since last year. Foundation Theatres, which runs the hugely successful Capitol and Sydney Lyric Theatres in Sydney, would have required only $25 million from the Government.
Yesterday the Premier insisted that proposal was “still in play”.
“If they still want to pursue that they can,” she said.
But by announcing the new theatre as an extension of QPAC she has effectively killed off that proposal.
This is another good example of government activity crowding out private sector activity. Government activity is generally only justified where there is market failure or equity concerns (in which case transfer payments are typically more efficient than public provision of a good or service). Given the market-led proposal from Foundation Theatres, where is the market failure in this case?
The private sector appears willing to have met the bulk of the cost of the new theatre. The private sector proponent Foundation Theatres isn’t totally pure, as it was asking for a $25M contribution from the state government, but this would have been a much smaller outlay than the $150M the government will now spend building the theatre itself. Of course, one would need to consider what exactly the state government would have received for its $25M investment in the Foundation Theatres venture. That said, based on the limited information in the public domain, it is difficult to understand the logic behind the Government’s $150M investment in a new theatre at QPAC.
By Joe Gatling from Ho Chi Minh City, Vietnam – Queensland Performing Arts Complex, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=11983514