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The year that was
The final newsletter for the year provides a chance to review the past 12 months of the campaign.
From the moment on 17 November 1999 when Premier Bracks announced the Government's intention to extend the Grand Prix beyond 2006, Save Albert Park's primary objective was to prevent an extension. Our expectation was that common sense would prevail - even Mr Kennett had said that the Grand Prix would have served its purpose by 2006 - and so we mounted an information campaign directed to Government members of parliament.
We did not succeed. On 16 August 2000 the Premier announced a new contract for the Grand Prix from 2007 to 2010. And the new contract, like its predecessor, is totally secret. Announcing the new contract before the Government had formally responded to the report of the Audit Review on Government Contracts, and at the same time as the release of the NIEIR report on the economic impact of the 2000 GP, was not the act of a Premier truly committed to decency, democracy and openness in government.
It is true that since the ALP came to power we have had access to Government ministers and advisers, and we were given a chance to comment on a draft of the NIEIR report. But none of this was true consultation. They were hearing but they were not listening. Their minds were already made up.
The new contract flies in the face of the adverse social and environmental effects of holding the Grand Prix in the Park. The Premier has justified it only on economic grounds based on the NIEIR report, which in turn is based on poor sampling methodology, questionable sources of economic benefits, and a secret econometric model.
The decision to renew the contract was obviously an act of political expediency.
Having said this, we know that we have friends among
Government parliamentarians and the Independents. And that we are not the only community environment group affected by
government policy u-turns, lack of true consultation, and unwillingness to assess projects for their social and environmental impacts as well as economic impact.
The new contract could easily have demoralised us and ended our campaign, but the evidence is that it has not done so: our membership numbers are unchanged, there is standing room only at General Meetings, our vigil continues fully staffed and is approaching 1,900 days, our office is busy, and our working groups continue unabated.
However, the new contract resulted in a review of our strategy and structure, from which emerged a focus on retaining the Grand Prix in Victoria but moving it from Albert Park to a permanent and better venue. This option would benefit all Grand Prix stake-holders except a very small number of local businesses, and also would likely result in better economic, social and environmental outcomes compared with the Albert Park venue. Our challenge in 2001 is to make the alternative track proposal irresistible to those concerned. It won't be easy but we will not shirk the issue.
In the meantime I compliment our members for their outstanding commitment and endeavour which continued throughout 2000, and I thank you for the honour and privilege of being your incoming convenor. I wish you all a safe, joyous and restorative festive season.
Ross Ulman, Convenor
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'Corporate welfare' under the microscope
A recent report on the incentives State Governments use to attract private businesses to their State is very relevant to the Formula One Grand Prix and how it came to Victoria, and to the ongoing secrecy concerning the contracts entered into by the former and current Victorian Governments.
Published by the Australia Institute in October and prepared by the former Victorian Auditor-General, Ches Baragwanath, and a Melbourne University academic, John Howe, the report is entitled Corporate Welfare: Public Accountability for Industry Assistance.
The report examines the ways in which State Governments use secret financial arrangements with private businesses to poach these businesses from other States, and it specifically includes incentives for major projects such as sporting events run for private profit.
The report is very critical of the competitive environment amongst States that has allowed this situation to arise in the first place. It notes how businesses often seek to capitalise on this competition by playing State Governments off against each other in order to gain additional assistance. It comments in particular on "footloose" businesses which can apparently relocate without much difficulty, using this "flexibility" as part of their bargaining power in negotiating their financial deals.
The report argues in detail about the need for transparency and the public's right to know when taxpayers' money is being used to directly enhance the profits of private corporations. It states that the private sector should be aware that in dealing with Governments the requirements are different from those involved when dealing with another business.
However, it also quotes a 1996 report of the Industry Commission that "while business legitimately seeks to keep certain information confidential for commercial reasons, the impression gained from a review of much of the debate is that commercial-in-confidence is used by government far more widely than is necessary, and far more widely than industry appears to consider warranted." (emphasis added).
This leads us back to the tantalising question of which party, the Victorian Government or Bernie Ecclestone, wants the details of the Grand Prix contract withheld from the Victorian public?
Put SAP on your
Christmas Party List!
Friday 15 December. 6-9pm
SAP office (where else - it's home)
Finger food and liquid refreshment provided
Drop in for a few minutes or a couple of hours
Make a night of it (9.00 closing not compulsory)
If it's hot - we'll party outside
If it's not - we can all fit inside
If we run out of food - we'll go for more
If we run out of drink - we'll go for more
Simple as that - spend a bit of Christmas with your friends
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Australian Grand Prix Corporation losses grow
The Annual Report of the Australian Grand Prix Corporation was tabled in Parliament in November. Ironically, the Grand Prix
suffered its biggest loss so far despite the organisers claiming the biggest attendance since 1996!
Two factors were at work. First the item for "event management" (which contains the licence and franchise fees) increased by $2 million over 1999, presumably a function of an annual "inflation increase" and the collapse of the Australian dollar. Secondly, the recurrent engineering costs increased by a similar amount. The Government has admitted that a mere 4% increase in official attendance (requiring more temporary infrastructure) resulted in a 14% increase in set-up/take-down costs. Yet another reason for a permanent track.
The Government's own figures (with the claimed boosterist
benefits) show the massive costs of staging the event.
Staging Expenses
Government Claims
for Economic Benefits
2000 F1 GP
$51.95 million
$130 million
1999 500CC GP $8.9 million
$54 million
Once again the media reported only the cash deficit and ignored the other direct costs to the public sector. The Government has ignored suggestions that the Australian Grand Prix Corporation should report all public sector contributions to the staging of both events. The AGPC has occasionally reported contributions from other government agencies and there is no reason why they should not be made responsible for reporting all government contributions. If the AGPC met all expenses out of its own accounts, it would make for greater accountability and transparency.
The AGPC is currently muddying the waters by not allocating public sector sponsorships, infrastructure expenditure or depreciation charges to the two individual grand prix events (Formula One and 500cc motorcycle GP). For the purposes of estimating costs, 80% of each has been allocated to the Albert Park Grand Prix.
The 1999-2000 Report of the Auditor-General on the Finances of the State of Victoria, which is the only other official source of public sector subsidies, has proved to be incomplete and we will be writing to his office on this matter. The report noted contributions of around $25,000 each by VicRoads and the Department of Infrastructure, but has failed to report direct expenditure of nearly $45,000 by Parks Victoria (see the November Newsletter).
This is one example of the potential hidden subsidies "squirreled away" in other government departments and agencies. The issue of transparency and accountability remains.
Our estimates of the costs to the three tiers of Government so far are summarised in the table below. We have been generous. These costs do not include any depreciation costs on the track or pit garages (which are carried by Parks Victoria) or cash rentals foregone by Parks Victoria or costs of Government corporate entertainment.
2000 Grand Prix
Total 1993-2000
Operating Costs
$3,995,588
$20,700,919
Other State Govt Agency Subsidies
50,300
1,039,300
Parks Victoria Expenditure
44,460
312,361
Australian Defence Force Fly-Overs 178,000
747,000
Public Sector Sponsorship
460,000
4,188,000
Local Govt Costs (est.)
155,000
776,968
Depreciation Costs
1,180,361
10,372,656
Total Operating Costs to Public Sector 6,063,709
38,137,204
Total Capital Costs
825,762
61,060,097
It is worth remembering that originally the Grand Prix project was to be financed by government loans as opposed to interest-free grants.
If these amounts were treated as loan funding, and subject to a commercial dividend charge equivalent to the Capital Assets Charge of 8% used in State Government budgeting, the real cost to taxpayers would rise by a further $7 million in the 1999-2000 financial year.
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How much additional tax does the GP really generate?
The Australian Grand Prix Corporation continues to justify Government subsidies by pointing to the additional revenues generated by the event.
We wonder who believes Mr Walker's claim that "the state is several million dollars ahead on a simple 'cash in cash out' basis". Press headlines like "Taxpayers pick up $4m Grand Prix bill" (Herald Sun, 1/11/00) suggest that the media hasn't bought this and does not believe its readers have either.
The race makes an audited loss and any tax revenues are guesstimates. The NIEIR report has once again provided absolutely no detail on the breakdown of its estimates. In fact it cannot even get the figure right. The executive summary cites $9.8 million while the main report (p.52) uses $9.2 million. It is disappointing that the Report of the Auditor-General did not note this discrepancy.
This is not the only inconsistency in the NIEIR report.
For example it cannot even get a consistent estimate of the proportion of patrons who were from overseas, a seemingly important statistic for the study.
Documents obtained under FOI reveal that the Bracks Government spent only $57,500 ($2,500 on the community impact study), on what should have been a comprehensive and detailed impact study before signing another contract.
A letter from the Mayor of the City of Port Phillip, also obtained under FOI, put it bluntly - "we have no confidence that this is an accurate assessment of the impact, or cost, of staging the QAGP in Albert Park."
For the price of the corporate entertainment in-kind payment to Parks Victoria in 1999, the Government could have commissioned a second independent analysis, one using a different methodology, consistent with the recommendation of the 1992 Independent Review of Victoria's Public Sector Finances.
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THE CASE FOR RELOCATION
After five years of the F1 GP at Albert Park, the problems of holding a motor race in a public park have been clearly demonstrated and some have been shown to be insurmountable. Now that the event has been secured for Victoria until 2010, the case for relocating the race to a suitable permanent purpose-built venue is stronger than ever.
The arguments for re-locating the Grand Prix focussed
initially on the permanent impact on the landscape design of the park, the disruption to park users and facilities, and the damage to park surfaces. The evidence for these has been
documented in the four annual Post-Race Reports prepared by the ParkWatch group.
Relocation would not only mean a park available for all Melburnians all-year-round, but would allow the completion of some of the finer aspects of the original plans for the Park and minimum standards of landscaping over all the park, not just parts. As the New York Times wrote in 1985, when the New York Grand Prix was being debated, "Auto racing doesn't belong in our parks, it's an alien use."
In the last two or three years, the issues of road safety, and public safety during construction, have also come to the fore.
It is also increasingly evident that a relocation would bring
economic benefits as well as financial benefits (i.e enable the event to make a cash profit).
Road Safety
The park roads are unsafe and cannot be made safe while the road design criteria are determined by Grand Prix requirements and any treatments installed for traffic safety can only be temporary and must be readily removable without causing any detriment to the race-track.
The responsible road authority is Parks Victoria. Most of the road safety treatments recommended to Parks Victoria in response to their 'urgent' consultancy brief of March 1998 have not yet been installed because Parks Victoria has neither the technical expertise nor the political or financial clout to do the job. Even if the recommended treatments were to be implemented, they would not make the park roads safe - merely slightly less unsafe.
Another road safety issue is the undesirable link between the public road system and an event that promotes speed. Relocation of the race to a purpose-built motor racing circuit will weaken this link.
Public Safety During Construction
It is accepted in the construction industry that construction is inherently a dangerous activity and numerous safety precautions are automatically implemented on a normal construction site, such as security fencing to exclude the public, induction into safety procedures and compulsory wearing of safety boots and hard hats.
For the four months of each year that the Grand Prix infrastructure works are installed and dismantled, between December and April, Albert Park is effectively a large construction site. Except for the seven days of the race period, when the public is totally excluded from the park, there are
no effective barriers between the public and construction activities.
Nor are members of the public inducted into safety pro-cedures or issued with protective equipment. Consequently, and not surprisingly, there have been many instances of people
suffering injuries, some of them serious.
Despite assurances from Parks Victoria and the AGPC that they will ensure that contractors observe safe work practices, after five years it is obvious that they lack both the will and the ability to do so.
The park cannot be made safe for the public while it is a construction site. There are only two ways that public safety in Albert Park can be ensured.
The first is to exclude the public from the park for the entire construction period, which most people would consider to be totally unacceptable. The second is to relocate the event to a purpose-built venue.
Another public safety issue, which is not generally acknowledged, is that temporary structures are less safe than are
permanent structures. The reasons why this is so include:
- increased probability of construction defects when a
structure is erected and dismantled frequently rather than just once;
- wear and tear on re-used components;
- building regulations permit lower standards for temporary structures;
- less rigorous approval processes and supervision.
There are many examples which illustrate this point, including at least one in Albert Park where a light pole which was incorrectly re-erected after one race collapsed onto Lakeside Drive, fortunately not causing any casualties on that occasion. A more recent example is the bridge construction site near Geelong, where a temporary structure collapsed and a large concrete beam fell onto the rail tracks with fatal consequences.
Economic Benefits
Proponents of the Grand Prix have consistently trumpeted 'economic benefits' as the major justification for holding the event in Victoria, even though every official study, including the recent NIEIR report on the 2000 race, has relied on questionable methodology to arrive at conclusions of dubious veracity.
Whatever the true 'economic benefits' (or dis-benefits) of holding the event in Albert Park, the relative benefits of holding it at a purpose-built permanent venue are many and substantial and include:
- a new construction project for the Victorian construction industry at a time when there is a slowdown in the
industry;
- a permanent asset which can be used throughout the year for motor sport and other major events;
- Parks Victoria resources, currently improperly wasted on monitoring GP works and rectifying their depredations, can once more be applied to the maintenance and improvement of Albert Park and other parks.
- sporting clubs and the Victorian public regain
uninterrupted access to Albert Park;
- the costs to motorists of the traffic disruption caused by closure of park roads for the GP will be eliminated.
- the disruption to the local economy of the inner city municipality will cease
- an economic boost for an outer metropolitan centre or a regional centre close to Melbourne;
In addition, a permanent track would significantly reduce the air pollution and greenhouse gas emissions problems
arising from the need to truck in and out through the inner city thousands of tons of race infrastructure each year.
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The ABC of public parkland
In a speech to the Annual General Meeting of the Friends of the ABC in Melbourne on 9 November 2000, the former Labor Premier, John Cain, chose a telling analogy for assessing the ABC board when he said: (The Age, p.21, 15 November)
"The board is like a trustee of a piece of public parkland. It's the people's land, not the government's."
The Kennett Government did not see public parkland in that light and, to its shame, neither has the Bracks Government.
This reminds us of the message that Ben Haber (Chair-
person, Committee to Stop Grand Prix Auto Racing in Flushing Meadow Corona Park) brought to Melbourne in 1995. Ben's letter to The Age (27/9/95) quoted Frederick Law Olmstead, the creator of Central Park:
"The survival of our park system requires the exclusion from its management of real estate dealers and politicians and that the first duty of our park trustees is to hand down from one generation to the next the treasure of scenery which the city has placed in their care."
As Haber wrote in 1995:
"Public parkland is sacred and there can never be, and should never be, any justification for
turning over large tracts of parkland to private interests and especially so for an alien park use like a high speed auto race."
Fortunately for his campaign those sentiments were echoed by the New York dailies in 1985.
The Bracks Government, which is promising a legislated parklands code, has a lot of ground to catch up.
Campaign News
Albert Park sporting clubs have been informed that Brown and Root Engineering (the new owners of Kinhill) will commence works on 12 December to erect their offices and contractors amenities in the Park.
The annual set-up of the Grand Prix infrastructure will commence on 9 January.
John Thwaites has just distributed a glossy brochure setting out what the Government has done for the Albert Park electorate since October 1999. It is strangely silent on the additional five years of the motor racing in Albert Park.
Royal Park
SAP has agreed to support Royal Park Protection Group's Green Games 2006 campaign.
We believe that all major events should be required to be 'green' as part of the National Strategy for Ecologically Sustainable Development which has been agreed by the Federal and State Governments. The Formula One Grand Prix would not meet the environmental guidelines set out for the Sydney Olympics.
Princes Park, South Caulfield
South Caulfield's Princes Park (between Hawthorn and Bambra Roads), a well-used park for active and passive recreation, is now threatened with an indoor sports complex to be built in the middle of the park.
SAP is informed that the proposal involves a two-storey building equivalent to five housing allotments (85 m x 45m), a public road and parking for at least 250 cars.
For more information contact Glen Eira Residents Association (GERA), phone 9530 6143, email pleydelm@melbpc.org.au
Stawell's Big Hill saved
We are delighted to learn that the Minister for Planning has rejected the proposal for an open cut mine on Big Hill in Stawell and offer our congratulations to the Big Hill Action Group for a successful end to their two and a half year fight. We have received a letter thanking Save Albert Park members who in various ways supported the Stawell campaign.
Lilydale to Warburton rail trail
A 40 km recreation and heritage trail along the former Lilydale to Warburton railway is an exciting project which has been developed by a community group in conjunction with the Shire of Yarra Ranges. The trail has the potential to
provide a safe and attractive cycle and pedestrian link with the Lilydale MET station.
In September the Minister for Planning approved the Shire's planning scheme which included the zoning of the former railway in its entirety as public open space for recreation. This was consistent with State planning policies and the Yarra Valley and Dandenong Ranges Regional Planning policies, which called for the reservation to be maintained for its possible future use as a transport corridor and its use in the meantime as a multi-use recreational trail.
The Minister for Environment and Conservation, Sherryl Garbutt, has now announced (by way of a media release) that she will not approve the trail north of the Maroondah Highway, and proposes instead to grant an adjacent private school a 10 x 10 year Crown Land lease to land cutting across the trail. Instead of a safe starting/ending point at the station, and the use of a footbridge over the busy Maroondah Highway, users will now have to start and leave the trail at an unsafe point on the highway.
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SAP website
The Committee would like to hear from any members who would be interested in managing the SAP website which has been one of our important public faces and a means of
disseminating information and canvassing campaign issues.
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