The real cost of Australian sport

Published as ‘Untold story of sports rorts’, Geelong Advertiser, Wednesday, 14 May 2008, p. 23.

Have you ever wondered how much our national obsession with sport costs us? As a died in the wool sports nut, I sometimes wonder myself. There are issues which worry me and two of the most important are the extent of existing public subsidies to sporting bodies and the lack of transparency in its provision. Then there are subsidiary questions about the distribution of funds between sports, about which there are massive public misconceptions, and the failure to meet head-on the claims by the sporting bodies that their contribution to health and well-being in society justifies the funding or subsidies or tax breaks they receive.
It is time for a little bit of clear thinking and research on all these topics. Interestingly the Minister for Sport, Kate Ellis, has just announced a review of funding for Australian sporting organisations by the new board of the Australian Sports Commission.

It is more than a decade since Kerrie Levy asked whether the privileged tax status of the Australian Football League should be reconsidered. At that time, and as far as is known to this day, the AFL has an exemption from income tax on its ‘profits’ at a time when it has been transformed into a non-profit making sporting body into a massive corporate enterprise. The public subsidy in the form of tax foregone is not widely known and while it can be justified there has been relatively little debate on the subject.

In the community more generally there are signs of an emerging concern about the distribution of public moneys to sports, as for example in Ballarat, where the substantial share of resources going to male football and cricket clubs has been called in question. In Geelong, state and local authorities have contributed very significantly to the development of Skilled Stadium citing the contribution to the local economy which is said to flow from the playing of nine AFL matches there each year.

The Formula One Grand Prix illustrates the difficulty in establishing the extent of public support, for as soon as you try to obtain relevant data you run into the blank wall of ‘commercial in confidence’ claims by the sporting body, Melbourne Major Events and the State authorities. One suspects that the Grand Prix organisation, like the generals in the First World War, keeps three sets of statistics, one to fool the public, one to fool the politicians and one to fool themselves.

The scale and extent of public sponsorship of sport through Quit, TAC, Vic Health and similar bodies has not been thoroughly measured, nor has the effectiveness of these programs been compared with other more direct measures to achieve socially beneficial outcomes. Frank Lowy obtained around $15 million from the Federal Government, basically without strings, in order to pay off the debts incurred by the Australian Soccer Federation and its immediate successors and the Football Federation of Australia has now gained Federal support for a bid to host the World Cup in Australia in 2018.

Since Malcolm Fraser committed funding for the Australian Institute of Sport and for the promotion of elite sport, in part to improve the disastrous medal tally at the Montreal Olympics, the public contribution has grown significantly. It is an interesting back of the envelope calculation to work out how much each medal won in Athens cost the nation. Will the Beijing ones be more or less expensive?
The sports bodies tell you they are only fighting their corner and that they are contributing to the health of the nation, setting an example, doing good work in the community and generally deserve more and more largesse. The trick for them is to get it by stealth (tax relief) or for some ‘worthy national object’, like bidding to host the World Cup. I have no great objections to them getting public support, but I just want it to be transparent and measured against other real needs in our society. And I would like them to be accountable for it. This is one thing Prime Minister Rudd seems keen to achieve for his own ministers, so why not do the same for sport and each year we could have a chance to question its stewardship of the grants, subsidies, sponsorship and tax forgone. It might make them a little more appreciative of the contribution which we, the public, already make. And it would waken the rest of us up to the sheer scale of public subventions, which would also be no bad thing. And the sports bodies should never be allowed to shelter behind ‘commercial in confidence’ in respect of public money.