Wednesday, 17 November 2010

Football and the Nanny state

Talking about Bellerive Oval ( HERE ) Paul Muller laments the lack of interest by Governments in spending further funds. “That it lies all but barren for the remainder would suggest to even armchair economists that it is failing to realise its profit potential”.

The world is awash with surplus supply capacity following the GFC. It surely cannot be a serious proposition to assert that such a situation requires Government funding to create more demand.

If so we’ll be insolvent even sooner.

Doesn’t the existence of excess capacity suggest that the original spending decision was incorrect?

Why spend more ‘good’ money after ‘bad’?

I’m interested to read that “The off-shore tourism impact of four Hawthorn games annually adds over $15 million to the state’s economy and 300 full-time jobs.”

A FTE job in tourism costs $50,000 pa so 300 jobs costs $15 million. Does this mean that net profit from the venture is nil? In fact it will be a large loss, because there’s sure to be expenses other than wages?

Is such a loss sustainable? Why is it so attractive?

The traditional attraction of getting Governments to sponsor major events was that losses were socialised and profits capitalised. Paul is now suggesting that there is no private profit either. Why do it? Perhaps I’m misunderstanding his arguments?

I accept that there may be externalities that flow from Government spending in these areas (increased athletic participation for instance) but it’s a reasonably long bow. Build more stands at Bellerive might encourage Norm from his couch? Possible I guess.

Paul talks about the” off-shore tourism impact of four Hawthorn games annually.”

That suggests that these football club deals are just de facto support mechanisms for the tourism industry. Could the tourism industry benefit more if the funds were spent elsewhere?

Apart from interstate visitors the balance of the interested population must be locals who will inevitably divert expenditure to satisfy their lust for football. How does this benefit the State? What about those businesses who would have received more were it not for football intervening? Are their losses taken into account when the gains from football are calculated?

The whole football debate, and this is not in any way meant to be a reflection on Paul, is so full of intellectual dishonesty. Let’s face it; people simply expect Governments to bring their teams to Tassie for them to see.

It’s another extension of the Nanny State. All the argument used to justify this, are simply ex post rationalisations, made up after the event in other words.

Paul if you are able could you address your mind to the question of the optimum number of AFL games that the Government should sponsor. Why four? If it brings such benefits why not 6 or 8? I’m bewildered by all the conflicting claims. A simple graph showing the link between the number of games, the Government expenditure and the benefits to the State would explain the point.

Armchair economists like me need assistance.

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