Umm, if the cost has gone up by $2.55 billion since July 2021 when the winning bid was announced, how much do you think it will actually cost by 2032?
And, yes, of course the Olympics are enormously popular and well watched worldwide. And, yes, of course initial projections said they would deliver more than $8 billion in economic benefits. But initial projections always say things like that. And pretty much in the history of the modern Olympics they never turn out like that.
Ask yourself this: If by spending a decade building specialised venues for a two-week sports festival you really could make billions more than you put in, if there was any history of that actually anywhere in the world, ever, doesn’t it seem odd that when they got to the final bid, Brisbane was the only city left with its hand in the air?
Or do you think history actually shows initial budgets blow out, the money never comes back the way projected, and – because of that – most potential bidders to be Olympic hosts run screaming from the room once they look at the numbers?
Don’t take my word for it.
An artist’s impression of the new Gabba stadium and concourse, with a walkway to the Cross River Rail and Metro stations to the left.
About a year ago, an economics researcher by the name of Rodney Bogaards wrote an academic treatise for the federal parliament on the history of financing and reward at the Olympic Games. He specifically looked at whether Brisbane could buck history by basing its bid on using the “New Norm” principle of using existing infrastructure.
He concluded – and remember this was before Brisbane appeared to decide that its existing infrastructure needed $7 billion of tarting up – it was unlikely.
“The history from cities that have hosted Olympic Games suggests a common tendency for overly optimistic estimates of the benefits, and underestimation of the significant direct and indirect costs, which has frequently resulted in large cost overruns,” Bogaards said in his report.
Bogaards went on to detail how Montreal took 30 years to pay off the debt incurred by the 720 per cent cost blowout of the 1976 Olympics. He also said the cost overrun of the 2004 Athens Games had weakened the Greek economy to the extent it might have contributed to the subsequent economic crisis that engulfed the country.
“The experience of these and many other host cities suggests that Australian decision makers should be alive to the risks of optimism bias,” he wrote. “In this context, and even applying the ‘New Norm’ changes, with limited cost information available and contestable benefit estimates, there remains considerable uncertainty as to whether the benefits of the Brisbane Olympics in 2032 will outweigh the costs to the community.”
I would say that when you translate his academic rigour into colloquial English, the level of expenditure is crazy.
Thank you. I will be in my trailer.
Twitter: @Peter_Fitz