QCA warned against bidding wars (e.g. on Origin games) back in 2015

As a Townsvillian by birth, I am happy that Townsville will host the first 2021 State of Origin game, but I’m also appalled that Queensland taxpayers have to pay (reportedly) up to $8 million to the NRL so Townsville can host the game (see this Brisbane Times report). This provides another excellent example of Queensland Government financial mismanagement for me to discuss at the Australasian Study of Parliament Group seminar at Parliament House, Brisbane on Monday 14th of June. The NSW Government was right not to pay “silly money” to host the Origin game, as reported by the Courier-Mail today.

Here’s what the Queensland Government’s independent economic adviser the Queensland Competition Authority had to say about interstate bidding wars for major events such as Origin games in its 2015 Industry Assistance Review (p. 107):

…interstate bidding wars for major events are highly likely to be zero sum games. Major events, secured at significant taxpayer expense, primarily expand a state’s tourism sector at the cost of other industries within the state and the rest of Australia.

When a government overbids and overinvests to secure the right for a major event to be hosted in its jurisdiction, it may largely dissipate any potential benefits from the event. Therefore, increased cooperation between state and territory governments in attracting major events may be beneficial for the community, especially if it reduces the likelihood of governments entering expensive bidding wars to secure major events.

The high costs of bidding wars have been previously recognised by most state and territory governments. In 2003, the Interstate Investment Cooperation Agreement was signed by all state and territory governments (except Queensland), whereby the governments agreed to end unnecessary bidding wars to attract investment, including major events. However, this agreement lapsed in 2011…Another cross-jurisdictional agreement between all state and territory governments is worthy of further consideration to increase cooperation and end costly bidding wars.

Instead of spending $8 million on a one-night Origin game, wouldn’t it have been better for the Queensland Government to have spent that money on local schools or tackling what appears to be out-of-control youth crime in Townsville? Certainly there are many areas of need in Townsville as the local economy has struggled for years, as evidenced by declining property prices (Hat tip to Marcus Smith for highlighting this).* The $8 million paid to the NRL to attract the Origin game could be much better spent on areas of genuine need.

A chart showing declining house prices in Townsville over 2014 to 2018.

*On Townsville house prices, Pete Faulkner has made me aware that Townsville house prices have recovered since 2018 (when the .id data in the chart above finish) and are now higher than they were in 2014. I’ll aim to have a closer look at these figures in a future post.

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

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5 Responses to QCA warned against bidding wars (e.g. on Origin games) back in 2015

  1. Murray says:

    Thank-you for your rational chipping away at bread-and-circuses government.

  2. Totally agree , Townsville is suffering from extreme crime in both vehicle damage, destruction and home invasion fields with no real State Government action , in fact the state Gov MPs are just negligent in their duties. The serious part is the State government needs to spend nothing in reality to fix the problem. They expect Hill to rake in the votes when she runs for senate but locally we know that there is corruption in the voting system and in the state an local government locally and the people know it!

  3. Thanks Gene — all good points. Attending to the grassroots doesn’t work politically because its hard to get noticed, or not taken for granted. Meanwhile being seen to secure some Big Prize is something that politics rewards. I want a term for this — can you think of a better one than ‘arterialisation’. Ugly I know, but I think it’s a huge issue. It’s the same story with the Fed Government and Twiggy supporting income cards in the NT. The evidence seems to suggest they cause as much harm as do good unless they’re introduced with strong local community support. But that’s all invisible to the national press and income cards sound like such a good idea. And the list on this goes on and on.

    My proposal for the Evaluator General is all about this. Senior people imagine that they’ve always supported ‘evidence-based policy’ (even though, beyond a commitment to some kind of process — whether it be RCTs or a PC review, they don’t’ really know what evidence-based policy is beyond this — and therefore how hard it is). So many quite like my idea thinking it’s a mechanism to force evidence-based policy on those lower down in the hierarchy.

    In fact, it’s trying to develop a practice of learning in the field and growing successful practice from there. That’s the way Toyota revolutionised car manufacture — literally increasing labour productivity about fivefold over twenty-five years. The Evaluator General is an attempt to build the scaffolding to do something similar in social policy, though the difficulties and complexities are greater.

    • Gene Tunny says:

      Hi Nicholas, thanks for the comment. Re. an Evaluator General, we certainly need something like that up here in Qld. The state government has scaled back the small degree of independent scrutiny it’s subject to by rolling the Qld Productivity Commission into state Treasury. While in Opposition it proposed a state Productivity Commission and set one up, but it’s found the Queensland PC inconvenient while in government. We do still have a reasonably good Audit Office up here I should note, although it can only do so much.

      Arterialisation is an interesting concept. Sounds like as good a description as any other that could be offered. I’ll have to check out the political science literature because this appears to be an important phenomenon that should be addressed in that literature.

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