More work needed to show SEQ Olympics would stack up

The increasingly likely 2032 SEQ Olympics stimulated a lot of debate across Australia last week, and I expect scepticism of the Olympics will grow in the lead up to the Games. At the moment, regional Queenslanders such as Robbie Katter MP (see this ABC News report) and Townsville economist Colin Dwyer are leading the criticism against the bid for the 2032 Games. Colin wrote a passionate email to his mailing list last Thursday, with the subject heading “Stop the Brisbane 2032 Olympics”:

What does a successful SEQ Olympics 2032 mean for regional Queensland?  A successful SEQ 2032 Olympics bid will cost Billions and will experience large cost over-runs, blowing out state debt.  Olympic Investment will be concentrated in the south east with crowding out consequences for crucial and safe regional infrastructure.  We will all share the massive cost burden of an SEQ Olympics but regional Queensland will not get Our Fair Share of the net benefits.

I too am concerned an SEQ Olympics would experience large cost over-runs. It appears to me that the state government hasn’t properly crunched the numbers on what an SEQ Olympics would actually cost, or if it has it hasn’t published the results. All the state government appears to have published is a 24-page Value Proposition Assessment Executive Summary which it released early last year. I suspect it didn’t publish the full report because it would raise too many questions about the merits of the Olympics bid. The report does not provide any tabulations of expected costs, both operational and capital costs, to compare with expected benefits. The government hasn’t shown its calculations or its underlying assumptions supporting its confidence the Olympics will be a net positive for the state.

The Queensland Government’s assertion that the Olympics will be “cost neutral” only applies to the Games’ operating budget, labelled the Organising Committee for the Olympics Games (OCOG) budget (see p. 15 of the Executive Summary). It does not apply to new venues, venue upgrades, or other infrastructure built for the Games. The Government admitted in its Executive Summary: “Costs associated with the non-OCOG budget continue to be assessed.” These costs will include the capital costs for a minimum of two but potentially seven new venues, possibly including an Olympics stadium at Albion, according to this Brisbane Times report.

It’s clear that the state government committed to bidding for the Olympics without having a firm idea what it would ultimately cost Queensland taxpayers. Anyone who has seen how investment decisions are made in private sector companies would be appalled by this lack of feasibility analysis and due diligence.

Finally, I should say I’m not necessarily against an SEQ Games, but I’d like to see a much more convincing demonstration that it would be in the interests of all Queenslanders than the Government has provided to date.

Please feel free to comment below. Alternatively, you can email comments, questions, suggestions, or hot tips to contact@queenslandeconomywatch.com

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