Bracks Signs Secret Contract
Whenever the public is surveyed regarding its trust in various occupational groups, politicians invariably rate lowest. The Victorian Government's announcement on the 16th of August highlights why.

By announcing a new contract for the Grand Prix from 2007-2010 simultaneously with, and relying on, the NIEIR report on the economic effects of the 2000 race, Premier Bracks has effectively short-circuited scrutiny of that report by economists, media or the public. A Government committed to open government should have allowed and welcomed such a process. The decision has also preceded, when it should have followed, the public consultation on the future development and usage of Albert Park Reserve.

Perhaps more significantly, the Premier, who came to power loudly proclaiming his commitment to open, transparent and accountable government, has just signed a secret contract! It is this secrecy that may explain the timing of the 16 Aug-ust announcement. As recently as 1 June, when the Government released the report of the Audit Review of Government Contracts, the Premier stated that: "The Government expects to announce clearly defined protocols for the public disclosure of commercial dealings by August.".

By announcing the extension (or is it a new contract?) first, he will be hoping to avoid being judged in the light of those protocols. In the 1 June media release the Premier also said: "If the community and the public sector are to have faith in government contracting activities, it is essential that they are conducted openly and transparently, and within clearly understood procedures". The release of minor contracts involving Parks Victoria will not be sufficient to restore that faith.

The next test of the Government's integrity and genuine commitment to good governance and responsible policy-making will be how seriously it takes the promise to develop standard methodology to assess the economic value of major events. The conduct of the latest evaluation and the use of the final report underscore the reality that the premature decision to extend the contract is more of a political decision than one based on sound economic analysis.

Members of Save Albert Park are entitled to be angered by the timing of the 16 August announcement. Yes, SAP did meet with government ministers, and was given access to a draft copy of the NIEIR report and an oppor-tunity to comment. But this was in reality a sham consultation; the Government had already made up its mind. Reportedly, the Premier finalised the deal with Ecclestone in early July - weeks before the completion of even the draft NIEIR report.

It is now the Government's responsibility to convince Victor-ians that it has a serious commitment to ensuring that its major events strategy has a "demonstrable benefit to the State".

Save Albert Park will be releasing a substantial audit of the 2000 Grand Prix report and will be attempting to contribute to the proposed "standard methodology". But as Mary Crooks has reminded us the costs and benefits are not just dollars; the secrecy and lack of process associated with this event represent costs to democracy.

The print media, to its credit, has drawn attention to the secrecy. It must now do its public duty and begin to scrutinise the conflicts of interest, the contractual relations with Bernie Ecclestone and the real value of events. The Melbourne media tends to be more interested in reporting the latest news on the Games than on scrutinising its own backyard.

The Grand Prix in Albert Park, which was a symbol of what was wrong with the Kennett government, is now a symbol of what is wrong with the Bracks government.

SAP will continue to oppose the race in the Park. A large number of Victorians expect us to do that, and we will not let them down.

"Bracks' decision to unambiguously place the continuation of a major event shrouded in secret contractual arrangements above democratic principles is cavalier behavior. It erodes rather than restores democracy."
"The Bracks Government cannot have it both ways. It cannot insist that democracy has been restored simply by applying some financial cap on government spending on major events, while at the same time condoning the extraordinary secrecy conditions imposed by an individual racing entrepreneur."
(Mary Crooks, director of Purple Sage Project - The Age, 18 August)

The new four-year contract to stage the Grand Prix in Albert Park from 2007 to 2010 was announced by Mr Bracks as part of a "new strategy" applying "a discipline and rigour to the process of attracting future major events to ensure there is a real demonstrable benefit to the State". As part of this so-called new strategy the Bracks Government has committed itself to the "development of a standard methodology for the assessment of major events".

In the meantime the Government has used an "independent report" commissioned by the Department of State and Regional Development to justify the new contract. The report was prepared by the same consultants who claimed the $95.6 million (gross) benefit for the 1996 race. It comes as no surprise that the new report has found greater benefits ($130.7 million), more additional taxes, more jobs (3100 effective full-time jobs!) and more visitors.

Once again we see the use of a decimal point to give credence to a figure which is no more than a rough estimate based on a set of assumptions. It should also come as no surprise that the report argues against any increased rental for the Park.

Secrecy
The credibility of the NIEIR report is severely undermined by the secrecy covering the Grand Prix contracts and the business style of the Australian Grand Prix Corporation. Ticket data remains confidential and the report avoids reporting any sensitive numbers such as the number of corporate patrons. The secrecy problem is compounded by the use of a con-fidential economic model (which we believe has not been peer reviewed) to estimate the flow-on effects and claims of additional jobs.

The report acknowledges that the key to the value of any event is the "net export component" (the money flowing in from overseas and interstate), but is studiously careful not to reveal the offsetting import costs (licence and other fees paid to Bernie Ecclestone). The report is also unable to report the details of sponsorships or commercial revenues from overseas or interstate. Therefore, we have to take all assurances about the net export content at face value.

We understand the consultants were not given the data on ticket sales, and there are no details in the report. Why is the AGPC so unwilling to release details of ticket sales to the Melbourne event? The South Australian GP Board allowed the evaluation of the 1992 GP to report details of grandstand, corporate and total ticket sales.

Economic Impact
SAP is awaiting final advice on the modelling and the economic assumptions behind the report but there is already enough information to arouse scepticism. The report claims to have taken a conservative approach to estimating the economic impact of the Grand Prix. There is little evidence of this and overwhelmingly the evaluation seems intent on accepting and using estimates at the high end of the range.

There are small details which the media will not notice. FOA officials are supposed to have spent $1.48 million (compared with $39,900 in 1996!); the Dutton Rally spent $1.7 million on repairs/preparation of vehicles (but only $179,000 in 1996); the Nascar team spent $387 per head per night on accommodation.

The model is used to justify boosting estimates again by including a component for savings spent by Victorians (now increased from 20% to 29% of Victorian expenditures on the event). One of our reviewers (a Professor of Economics) has described this claim as "highly implausible" and one which "makes for a considerable exaggeration of the likely effects on activity of the event."

The "retained residents' expenditures" (the amount Victor-ians would have spent going to Adelaide if the race were there) is simply an estimate and again unreasonably high. The $13.6 million claimed for this item is 60% of the total estimated interstate visitor expenditures (by Victorians) in 2000.

More fundamental issues remain: the real costs of earning any benefits, the net import content of the event, and the reliability of the data on visitor numbers. The claimed additional jobs (see below) and State tax revenues both depend on the validity of the economic model and the accuracy of the data used. All these claims will be addressed by our peer reviews of the document.

Equitable Access To The Park?
The low point of the report is the extraordinary conclusion that "the current fee paid by the AGPC exceeds the amount required, as the event effectively increases the equitable access to the park for all." (p.v). This argument is based on the premise that costs of travel and parking prevent the "poorest residents" of Melbourne using the park!

"When a patron of the QAGP [Qantas Australian Grand Prix] chooses to purchase a ticket to the QAGP they do so because they value the event at least as highly as the price of the ticket. This surplus helps overcome the cost that would otherwise have hindered a large number of Victorians, other Australians and international visitors from visiting the Victorian public's most valuable Crown Land park asset." (p.70).

The idea that an event which charges unusually high ticket prices and closes the park to all but paying patrons actually increases "equitable access" to a public park is an example of economics gone mad and should worry all defenders of urban and national parks.

The report's approach to the 20-week loss of recreational facilities (during the GP setup and takedown period) is simply to cost the travelling time of an estimated number of users who are notionally diverted to alternative parkland!

Sample Selection Bias
The key to the evaluation of any major event is the estimate of the number of interstate and overseas visitors who bring new money into the local economy.

The estimates for the 2000 GP are based wholly on a patron survey which used 'convenience sampling', a method whereby patrons are interviewed on the basis of convenience rather than by random sampling.

This method is liable to sample selection bias (as good as admitted in the report - p.16) and can distort the findings unless there is a benchmark which can be used to re-weight the results.

The estimated proportions resulting from the survey lack credibility. The Government should be asking why the evaluation found that only 8320 country Victorian patrons attended over the four days, which is a 62% drop compared with 1996! On the other hand, it estimated there were 20,314 visitors from NSW alone. This unlikely figure (70% of total interstate patrons) would represent an 84% increase on 1996, and a gross over-representation compared with the Adelaide Grand Prix or the NSW share of spectators of motorsport.

The credibility problems of the patron survey are compounded by the lack of a satisfactory question to determine if a visitor actually came to Melbourne for the race.

Two questions were asked:
1. "What was the main reason for your current visit?"
2. "Would you have come to Victoria in the absence of the FOGP?"

The answers received from various categories of visitors varied so greatly that the researcher was faced with a range of possible estimates and chose the "midpoint". The figure used in the report is little better than a guess.

Real Jobs
We will have more to say on the estimates of additional employment when our peer review of the report is completed. It is worth emphasising that NIEIR is prepared to predict the long-term flow-on effects on employment based on an employment multiplier when the more cautious Price Waterhouse study in 1992 was not.

This is one more example of "rubbish in and rubbish out" modelling. If the claimed economic benefits are not there, neither are the jobs.

Sceptics might like to compare the GP with the Holden V6 engine plant project. Using NIEIR's own estimates of export earnings and capital works costs related to the Grand Prix, the results look decidedly suspect:
Holden V6 2000

	FOGP Plant Project	NIEIR Data
Investment	$500 million	$50 million
Annual Exports	$366 million	$60 million
Effective Full-Time Jobs	1000	3100

If the Government really believes that the event generates $130 million in new activity and 3100 effective full-time jobs, then it is a long-term project which warrants the construction of a permanent track in a more sensible and environmentally suitable location.

Standard Methodology To Assess Major Events
If the Government were seriously looking for an evaluation of the GP, the Executive Summary of the report should have included some of the less attractive indicators. For example, most categories of GP-specific patrons now spend less time in Victoria compared to 1996, and in real terms overseas visitor expenditures have fallen since 1996.

The latest Australian Bureau of Statistics accommodation figures show that the growth rate in guest night numbers for March is no different from January or February since 1994 or 1995. The average room-occupancy rate of 73% for the March quarter means that only about 5000 rooms or about 12,000 beds are available to absorb GP-specific visitors.

The release of the accommodation statistics coincides with the prediction from the Australian Tourism Commission that Sydney will have no net increase in international tourists during the month of the Olympics.

They estimate that the 350,000 international visitors will be roughly the same number that came to Sydney in September 1999.

SAP welcomes the Government's commitment to the development of a standard methodology to estimate the economic impact of major events. We have been urging this since 1996 and have written to all Auditors General in Australia on this matter. The development of such a model must be transparent and open to input from academic and institutional economists, should include input from the Auditor General and be subject to a peer review process. A flawed standard methodology will be of no value.

If the Government is to have a genuine cap on major event subsidies, it must be in a position to make reliable comparisons between events. Our next step is to provide a more realistic assessment of the impact of the Grand Prix and to compare it with the value of other events.

Mr Bracks' Press Release included comparisons with other "major events" but significantly omitted the economic benefits of events such as the Australian Tennis Open, the Bledisloe Cup and the AFL Grand Final. Whatever the final number, Mary Crooks reminds us that dollars are not the only measure of our society.

"Democracy costs. Faced with the choice between a subsidised car race that is a severe gash in our democratic fabric, and our capacity to fashion and maintain a healthy democracy, then the prospect of losing the race is the economic cost we should bear."
Mary Crooks, director of Purple Sage Project - The Age, 18 August

Ross Ulman, SAP Convenor

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ResCode & Public Open Space
Save Albert Park has made a submission to the Advisory Panel reviewing the draft ResCode on the standards proposed for public open space. We concentrated on the absence of any mandatory standard for the provision of public open space in new sub-divisions or for any mandatory maximum distance of the nearest public open space from dwellings.

We have recommended that any 'greenfield' or 'brownfield' development can and should be required to meet mandatory standards for 'public urban green space' and that these should address the proposed ANZECC Core Environmental Indicator of per capita urban green space. We have also suggested that any proposed standard for the area to be set aside should take account of the projected population.

We are concerned that the provision for local variations should not allow for any dilution of the proposed standards for access (i.e. distance from dwellings) and that the area set aside as public open space should meet minimum standards.

New 'greenfield' and 'brownfield' developments should have to formally appeal for exemption or variation from reasonable minimum standards. If the standards are to be treated seriously and judged to be of value by the Government then they should become part of the wider Melbourne Strategic Plan and State Government policy to protect and increase areas of parkland in Metropolitan Melbourne.

New standards should be used to encourage and fund local councils to expand the numbers and areas of small local parks. The policy to encourage medium-density residential development in existing suburbs places a premium on the protection of, and increase in, public open space.

Unfortunately the definition of public open space in the Residential Code includes pedestrian accessways. SAP proposed that the definition should follow the lead of the ANZECC State of the Environment Taskforce on Core Environmental Indicators and exclude from land counted as urban green space any road space and other open spaces not "accessible for regular human use or contemplation".

The use of public open space for the Grand Prix, which removes from normal use large areas of this city's open space for months, is inconsistent with the planning standards set out in Standards 28 (be accessible to the local community) and 29 (all dwellings should be within 500 metres walking distance from public open space). The Grand Prix demonstrates the need for planning standards with real teeth.

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From the Vigil
While dashing back from the US to resume Vigil duties, one of our members discovered that the young woman sitting next to him on the United Airlines flight was from Victoria - somewhere near Ararat. She said she had married an American and was on her way to Australia for a three-week visit with her family.

While discussing the merits of various international airlines she mentioned that she had flown Qantas years ago when she first left home, but hadn't flown with them since. Her exact words were: "My Auntie has decreed that no member of her family is allowed to fly with Qantas ever again - and my Auntie is the one person in the family that we listen to - or else".

She said her aunt was against using Albert Park for the Grand Prix and Qantas was a sponsor. "Auntie from Ararat" - We salute you!

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Corroboree Tree Grasslands Project
Yes! Trees are on the move in the Park.

About 30 young trees are to be re-located as part of the Corroboree Tree Grasslands project at the Fitzroy Street end of the Park. The trees - 20 Plane trees and 10 Golden Ash - are being moved to make way for the Grasslands development. The trees are currently in two rings around the Junction Oval.

Many people will be aware that the southern end of the park is set aside for indigenous plantings, not introduced species. The trees to be re-located are about three metres high and will readily transplant to other locations in the Park. They will be more than adequately replaced by native trees.

This is an example of Parks Victoria working with the community to ensure appropriate development within the Park.

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Birds Need a Helping Hand
It's Spring, and it's the nesting season for birds in Albert Park. You can help make it a better time for the birds. When walking in the Park, take the time to pick up bits of string, wire, fishing line, ribbon and plastic items, etc. Many birds incorporate man-made materials into their nests, sometimes with disastrous results.

One Greenfinch even lined its nest with cigarette filter tips! Magpies are notorious for adding odd materials to their nests, including clothes pegs, wire coat hangers, plastic six-pack holders, carton binding, twine and string. A nestling in Albert Park died when it tried to fly with one of its feet caught in twine. Other birds that have come to grief include Willie Wagtails, Mudlarks and even a Little Black Cormorant, which got its foot caught in a fishing line entwined on a tree branch.

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House of the Gentle Bunyip
SAP has been supporting the community group (which includes Rod Quantock, a great friend of SAP) which is fighting to save this 133-year old National Trust Building in Clifton Hill from demolition and replacement by six town houses. In addition to providing a banner and organising a telephone tree for the 24-hour picket (which has union support), SAP has assumed responsibility to staff a block of time each week from Wednesdays at 4pm to Thursdays at 9am.

Please ring the SAP office if you can help fill the roster.

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