The cash-strapped Victorian government has promised a reported $350 million to a multi-billion-dollar US company to construct a pit building and corporate facility expansion in the Albert Park Reserve. Sarah Russell and Joan Logan reports.
According to The Age ($), the US owners of Formula One, Liberty Media, will reap an estimated extra $30m annually in revenue from this expanded, exclusive corporate facility, paid for by taxpayers, on top of their exorbitant annual contract fee and revenue from trackside advertising.
The huge gift of taxpayers’ money is on top of the $1B already paid over the years to the owners of the race, which loses more than $100m a year.
The recent injection of funding was apparently part of a deal to extend the Melbourne Grand Prix contract a further two years from 2035 to 2037.
The event is projected to cost Victorian taxpayers a further $2 billion by 2037.
The Victoria Government failed to mention the key point, the owners of F1 will be the beneficiaries of the expansion, and it will ensure further permanent encroachment on public parkland.
Melbourne Formula One Grand Prix: beyond the spin the numbers don’t stack up
PR spin and budget cuts
It’s not just wheels spinning around a park, in the government’s Pits press release “Albert Park Shifts Up A Gear For F1 and Local Clubs” and in his news conference, Minister for Tourism, Sport and Major Events, Steve Dimopoulos, made no mention of the largesse given to the multi-billion dollar company.
Victoria’s state debt is dire: the worst in the nation. So strapped for cash is the Victorian government that it has drastically cut education funding to the state’s public schools and $95m from Parks Victoria’s budget, to name just two areas. Surely protecting Victoria’s dry and overgrown national parks from the risk of fire would be considered a high priority? Not so, it seems, for this government.
The funding cut of $2.4B to Victorian state schools was recently revealed in confidential documents the Victorian Government tried to hide.
More than 661,000 students attending some 1,570 government schools will be financially disadvantaged. The Allan Government is choosing to prioritise a very wealthy foreign-owned car racing business over funding Victoria’s future – our children.
One primary school located within the Albert Park Reserve has reportedly been pleading for funding to address basic problems, including the installation of a safe school crossing, as recently reported by The Age ($).
The pedestrian crossing on one of the main access roads to the school, which is used by the big trucks for months each year as they set up and then dismantle race infrastructure, is not clearly marked and has no permanent crossing supervisor. Race-day crowds also churn up the school’s adjacent play area, creating what parents say is a dust-bowl in summer and a mud pit in winter.
No economic benefit
Victoria’s Auditor General and reputable economists, including Professor John Quiggin, have found that the Grand Prix, even accounting for tourists, does not deliver a net economic benefit. Yet Government and the Opposition continue to back their own “utterly discredited” economic ‘impact’ studies. These studies return a positive result by ignoring costs – such as the $62m that is spent annually building and then pulling apart a temporary circuit.
We are told that Melbourne’s Grand Prix “showcases” Victoria to the world, encouraging tourists to our beautiful city. Yet how many Victorians, other than car racing enthusiasts, go to Sakhir for the HEINEKEN Chinese Grand Prix or the MOËT & CHANDON Belgian event because they saw that city’s skyline on television?
Economists also claim tourists who come to Melbourne for the Grand Prix displace other tourists who stay away because of this event.
The Grand Prix affects the park and the sports clubs, not for four days annually as promised by former Premier, Jeff Kennett, when he secured the event from South Australia, but for up to four months every year. For years, local sports clubs have expressed their frustration to the Grand Prix Minister of the day and the GP corporation.
As the President of the Albert Park Sports Clubs Association, Hugo Armstrong said, “The occupation [of the Grand Prix] causes varying amounts of disruption to membership, fundraising, field access and quality for training and competition, fixturing, and the momentum of the clubs, all of which are entirely amateur.”
It is a fait accompli: the Grand Prix will continue to lose taxpayers’ money while a foreign-owned company gets richer; Victoria’s debt will continue to skyrocket; and Victoria’s essential services will continue to be degraded.
Welcome to Victoria in 2025 and beyond.
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Dr Sarah Russell is a public health researcher. She is the Principal Researcher at Research Matters and Chair of Progressives of the Peninsula. She was formerly the Director, Aged Care Matters.
Joan Logan is an ICU nurse in a public hospital, former state cross country champion and triple winner of the Zatopek 10,000 metres, also a part time farmer. She's a lifelong supporter of public access to parks which brought her into the Save Albert Park campaign, where she is the FOI officer.