This Missive is likely to get me shot, and mostly likely with both barrels, especially given that tomorrow is Australia Day… but the Gold Coast 2018 Commonwealth Games is likely to do more damage than good.
It is an absolute waste of money and diverts attention away from the things that really need doing.
But that, of course, is part of the government’s plan. Since the birth of Christ, at least, it has been that way.
How it all started.
It all started in AD80, with the inaugural games of the Flavian Amphitheatre, on the orders of the Roman Emperor Titus, to celebrate the completion of the Colosseum (then known as the Flavian Amphitheatre).
Vespasian began the construction of the amphitheatre around AD70 and it was completed by Titus soon after Vespasian’s death in AD79.
After Titus’ reign began with months of disasters – including the eruption of Mount Vesuvius, a fire in Rome and an outbreak of plague – he inaugurated the building with lavish games which lasted for more than a hundred days, in an attempt to appease the Roman public and the gods.
And the Roman games continue today, having morphed into their own modern-day “cargo cult” – stage a sporting event and the money will come.
Today, we don’t waste public money appeasing the gods, but we do so in an attempt to make the public feel good and distract us when things aren’t going so well.
What about the Gold Coast
The Gold Coast is just the latest city to sign up for membership with its rejoicing in hosting the Commonwealth Games.
The idea that a city will gain wealth – or in the Gold Coast’s case, rebuild confidence and rejuvenate the city – by building sporting arenas and paying athletes, while often going into considerable debt, is bordering on laughable.
All the more so when the event lasts just two weeks, is contested and watched by very few (and especially not by the Chinese), and won’t address what really needs to be done to improve the Gold Coast.
What investors think
Earlier this month we asked Matusik Missive readers to provide us with their thoughts on this matter.
Three out of five respondents thought that the games would not have any real impact on the local property market.
Those that did; and some sent through some quite lengthy emails; could only really offer wishy-washy statements about it improving the “mood, sentiment and confidence” as a means of boosting the Gold Coast economy.
Most telling was that 85% of our respondents would not invest on the Gold Coast because of the games.
The more gullible think that property prices will rise on the Gold Coast as they did in the lead-up to the Sydney Olympics and especially after the 2006 Melbourne Commonwealth Games. But broader review of the statistics shows that prices rose much faster in many other locations at the time; suggesting that property prices are influenced by much wider factors than a local sporting event.
Critical analyses of the claims about new job growth, the boost in retail spending and lift in tourist numbers that apparently come from such events, will also reveal similar findings.
Look back through the history of economic impact reports from major events and you’ll quickly find examples of economic disasters that had been painted as bonanzas.
Just look at Brisbane
Brisbane City residents are still burdened with the upkeep of underutilised sporting facilities left over from the 1982 Commonwealth Games. Queensland Treasury doesn’t even know if the cost of those games has ever been repaid.
More recently, a survey of New Zealand businesses found that nine out of ten, and many of them retail and tourist-based, didn’t experience any boost in trade as a result of last year’s Rugby World Cup.
There is little doubt that “hallmark” events, which can include sporting events, can help revamp urban landscapes.
That might have been the case in Hambantota, had it won the right to host the 2018 games. But given where the money is planned to be spent on the Gold Coast, its capacity to overhaul is limited at best.
Maybe in the future an “urban revamp measure” should be the key judging criteria for sports-related events, rather than just how much money is thrown at the event.
Some serious issue on the Coast
For mine, the Gold Coast faces some serious issues.
The $2 billion games budget would have been much better spent on fixing its problems.
The coast – with close to 600,000 permanent residents and close to 4 million overnight visitors per year – needs the be governed accordingly and not as a tin-pot local authority; it needs to retool its tourism offering to suit the Chinese audience; it needs to dramatically increase its industrial land bank; get a bio-tech based industry (or similar) flourishing; facilitate fly-in/fly-out workers and build many more detached and semi-detached homes.
It doesn’t need to blow $1.97 billion on a two-week sports carnival in seven years’ time.
We just don’t have that kind of money to waste on such things any more. No, I am not anti-sports; I just think it is time to do much more with tax payers’ money.
Two more thoughts
I will leave you to enjoy your Australia Day tomorrow with two more thoughts.
Firstly, anyone in property who talks up the virtues of the 2018 games on the Gold Coast property market isn’t worth your trust.
There had better be much more to their sales track than just that.
Secondly, hallmark events should be treated like “gravy”. At present, the Gold Coast is close to starving. It needs meat and potatoes on its plate and not trimmings.
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