NZ Herald. By Phil Taylor:
Treasury has advised against taxpayer backing for Team New Zealand in the next America's Cup, labelling it “poor value for money”.
The Government contributed $5 million to Team New Zealand to help retain key staff soon after its 8-9 loss in the 34th Cup in September last year – against Treasury advice – and is considering investing a similar amount to the $36 million contributed last time.
Treasury repeated its opposition in March, documents released to the Herald under the Official Information Act show. (Click on the link below to see the documents.)
It told Economic Development Minister Steven Joyce and Finance Minister Bill English that Team NZ should get private backing and that “the extent of any positive economic impacts from a Government contribution [to the last challenge] have not been established” and could be gained without putting in public money.
Full story here.
EDITOR'S NOTE: This is classic public service thinking, in my view. Treasury states that the government would get the same tax and other benefits if the Kiwi challenge was privately funded. Yes it would. But what if the lack of government funding meant there was no New Zealand challenge – which is highly likely? Then the government would miss out on all the benefits, which far outway the cost of the investment.
An economic impact report estimated the last campaign added $87 million to the economy, raised $17 million additional net tax and about $38 million direct and flow-on tax. The government contributed $38 million to the ETNZ campaign.
– Roger McMillan
