Monitoring the Ministers
A year ago, as Minister of Economic and Regional Development, Stuart Nash popped up to announce the opening of the America’s Cup Village in downtown Auckland and declare it marked the start of an exciting summer of action on and off the water.
Today he has announced New Zealand has secured a four year deal to bring the new high-tech global sailing competition SailGP to our shores.
Lyttelton Harbour in Christchurch will host the first Sail Grand Prix season ever held in New Zealand. This will be part of Season Three, to be held across ten countries during 2022-23.
Auckland and Christchurch will then host alternate races in following seasons.
And will taxpayers have to chip in as part of the deal?
Of course (but a comparatively modest sum).
Delve deep enough into the press statement and you will learn:
“I have approved government investment of up to $5.4 million over four years. MBIE, which administers the Major Events Fund, is now working through the investment agreement with SailGP. We are pleased to see the event is also supported by both the Christchurch and Auckland agencies.”
That’s not the only expenditure item announced today.
- Housing Minister Megan Woods announced 120 new homes will be built in Palmerston North by June 2024 in addition to nearly 80 public housing homes delivered since the start of 2020. The upcoming developments include 50 homes for Rugby Street, 60 for Church Street and 14 for Wharenui Street. No costs were mentioned with regard to those, but Woods said Kāinga Ora has also bought a city centre site on Cuba Street – it is in the early stages of exploring how it can be developed for medium density public housing and was bought last month for $1.8 million.
- Pacific Peoples Minister Aupito William announced a new fund “to support the empowerment of Pacific Aotearoa to live safely under New Zealand’s COVID-19 Protection Framework”. In November, Cabinet agreed on $2 million in funding for the Ministry for Pacific Peoples “to support outreach into the Pacific Community”. This investment “will ensure the shift to the COVID-19 Protection Framework is well communicated and understood by our Pacific communities”.
We do appreciate a Minister confidently foreseeing his spending will “ensure” something.
Can the same be said of yacht races?
Other publicly funded agencies are involved in the yachting venture which Nash is supporting.
Then comes the usual rationale which Ministers recite on these occasions:
“The races will bring significant economic benefits and opportunities to celebrate our unique culture on the global stage. The stunning Whakaraupo Lyttelton Harbour in Ōtautahi Christchurch and the Hauraki Gulf in Tāmaki Makaurau Auckland will allow us to showcase the racing up-close, and are also a brilliant opportunity to promote our tourism industry.”
Oh – and let’s not forget the appeal to devotees of diversity and greenies and Nash’s acknowledgement we are supposed to be tackling climate change:
“SailGP has a strong environmental focus and its emphasis on diversity and inclusivity through its Women’s Pathway Program align strongly with our priorities. We look forward to working with organisers to finalise contractual arrangements to bring these events to life,” said Stuart Nash.
The announcement coincided with the release of SailGP’s Season 3 calendar which so far includes races in Bermuda, USA, UK, Denmark, France, Spain and Dubai.
Fair to say, the government investment is much less than was pumped into the America’s Cup in Auckland.
When Nash and Auckland Mayor Phil Goff took part in the official opening ceremonies of the America’s Cup Village a year ago, he said the government is investing $136.5 million in the America’s Cup and associated events and infrastructure, and Auckland Council had allocated $113 million.
And here comes the reasoning:
“Long after the racing is over the social, economic, cultural and environmental infrastructure created for the event will be a significant asset for the city. It will leave a lasting legacy that taxpayers and ratepayers can be proud of.
“Beyond the racing itself, the legacy includes excellent downtown infrastructure and a number of environmental, educational and storytelling programmes that are being rolled out with the Cup events.
“The action on water and seeing these boats fly can be an inspiration to Kiwis all over Aotearoa in a number of areas including science, technology, engineering and maths – and programmes that make the most of this are being rolled out this summer.”
A few months after the event – remember? – we learned New Zealand made a loss of $156 million from hosting the America’s Cup event.
The Ministry of Business, Innovation and Employment (MBIE) and Auckland Council cost-benefit analysis found the 38,745 people who visited Auckland during the event spent $298m, and it was the most watched America’s Cup of all time.
However, it found the economic return for the event was lower than had been forecast due to Covid-19 restriction visitors, media and superyachts.
“The cost-benefit analysis (CBA) for Auckland has identified a benefit-cost ratio of 0.85. In other words, for every dollar put in Auckland got 85 cents back,” it said.
“When considering financial returns only, Auckland got 72 cents back for every dollar put in.”
The analysis showed Auckland lost a total of $91.6m when intangibles like social, cultural and environmental costs and benefits were factored in, and lost $145.8m from a purely financial standpoint.
That compared to a New Zealand-wide loss of $156.1m, or $292.7m on a purely financial basis with a benefit-cost ratio of 0.48, or 48 cents back for every dollar spent.
And the government’s latest dalliance with sailing?
SailGP is still a comparatively new event but has strong Kiwi connections, Nash said.
New Zealand’s team is headed by Olympic and America’s Cup champions Peter Burling and Blair Tuke.
America’s Cup legends Sir Russell Coutts, Larry Ellison and Jimmy Spithill are involved in the global competition.
SailGP has worked closely with government, ChristchurchNZ and Auckland Unlimited to secure SailGP for this four year run.
So everything is bound to be plain sailing – right?
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One thought on “Buoyed by bureaucrats’ bullish projections, our Govt likes to keep racing yachts afloat and now (maybe) it’s on to another winner”
The losses were in New Zealand. These new projects are in Aotearoa, which will really make a difference. Or perhaps not.