Taxpayers' Union slags America's Cup spend

RICHARD MEADOWS
Last updated 05:00 28/03/2014
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Government claims that last year's America's Cup campaign has paid for itself more than twice over have been criticised by the Taxpayers' Union.

Economic Development Minister Steven Joyce yesterday released an independent report into the "direct and indirect benefits" of entering the high-speed yachting regatta.

"From a $36m taxpayer investment, the evaluation shows an estimated positive impact of $87m to the New Zealand economy," Joyce said.

However, Taxpayers' Union executive director Jordan Williams said there was no reason to celebrate the funding of a sport for rich men.

"The analysis is based on the questionable assumption that private money would not have flowed into Team New Zealand without taxpayers coughing up," he said.

The report also says Team New Zealand contributed to 1220 new jobs.

"Of course politicians like Mr Joyce will claim to have created jobs by spending other people's money," Williams said.

"The jobs and economic activity lost due to the tax taken from the economy in the first place, is ignored. Even a sport full of the richest men in the world doesn't turn down government money," Williams said.

Two thirds of the campaign's funding came from international sources including sponsors, meeting the Government's requirement to find $2 for every $1 of state support.

The report said 85 per cent of the total campaign budget, or $153m, was spent in New Zealand.

Joyce said one of the key benefits was the boost to New Zealand's profile in international media over the 55 days of racing.

However, opponents of the funding have also previously pointed out that yacht racing is a niche sport with a relatively small global audience.

Team New Zealand blew a comfortable lead to lose the final race 8-9 to Cup defender Oracle in San Francisco last year.

The Government has already made an interim investment of $5m to retain key team members for the next challenge.

A decision on further funding will depend on the business case Team New Zealand delivers.

Joyce said he had made it clear to the team that the Government needed to have confidence a stronger governance structure had been put in place.

He also released an evaluation into New Zealand Trade and Enterprise's (NZTE) business leveraging programme running alongside the Cup, which involved $3.9m of funding.

Over 200 companies from sectors including technology, food, wine, marine, aviation and tourism hosted former and potential clients during the event.

The report says Cup activity had contributed to trade and investment deals worth $200m, as well as a further $120m of new sales opportunities and investor interest. The reports were prepared by research firm Market Economics, and peer-reviewed by the New Zealand Institute of Economic Research.

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