Time for Australia to get behind the 2022 world cup

[Admiral Byng]

lol yeah that sums you up beautifully, as someone who has absolutely no idea about Australia what so ever.

"I’ve just gotten back from South Africa last week after the World Cup and one thing that I was absolutely struck by was the investment that they had made in sporting infrastructure, in new stadia, in new roads, in new airports. For anyone to suggest that the only people that would benefit from a World Cup is the football community are being very short-sighted because the sporting community more broadly would be massive winners out of this, as I believe would hugely benefit the Australian community. Which is the reason why I think we’re so committed to it, and we’ve put $45 million behind it and we’re determined to do everything we can to bring the World Cup to Australia" Kate Ellis

http://wwos.ninemsn.com.au/article.aspx?id=7928136
http://www.news.com.au/travel/news/b-for-aussie-world-cup/story-e6frfq80-1225891040640

Excellent example of just the sort of thing I mean. South Africa have lots of nice new stadiums, airports and roads linking them. But they still have people living in squalor without proper sanitation, and their schools don't even have proper desks. It is only by some very twisted logic we would put a sporting event above that in terms of priorities.

 

[Michael2010]

Excellent example of just the sort of thing I mean. South Africa have lots of nice new stadiums, airports and roads linking them. But they still have people living in squalor without proper sanitation, and their schools don't even have proper desks. It is only by some very twisted logic we would put a sporting event above that in terms of priorities.

clearly your some sort of issues in understanding the world and how economic growth occurs. Growth doesn't just happen, you have to have investment within a nation and improving South Africa's struggling townships involves growing the nation and that is exactly what the Football World Cup does. It puts a nation on the map, it changes perceptions about countries, it improves tourism, infrastructure and more so that a nation can grow.

"It has been estimated that the 2010 Fifa World Cup will sustain an estimated 695 000 jobs and have a gross impact of R93-billion on South Africa's economy. A projected 373 000 foreign tourists will visit South Africa during the World Cup, each spending an estimated R30 200 on average per trip. The indirect spin-offs from improved perceptions abroad could have an even greater, longer-lasting impact, not only on South Africa and its development but on the continent as a whole. A successful World Cup will help change the perceptions that a large number of foreign investors hold of Africa."

i.e please stop embarassing yourself and seek some understanding that the world cup is the biggest sporting event on the planet and it has considerable impact on any nation that has hosted it and it will be of massive benefit to Australia and no matter what your bs reasons might be it is just that bs, they have no logical or economic basis behind them. If Australia can host the 2nd largest sporting event on the planet twice and gain massive benefit from it then why can't it host the biggest? AUSTRALIA FOR THE 2022 WORLD CUP!!!

[YOUTUBE]QmwxFzVY7ZU[/YOUTUBE]
www.australiabid.com.au

 

[Michael2010]

Excellent video, looks like Frank's gonna bring the World Cup to the World's best sporting nation.

AUSTRALIA 2022 FOOTBALL WORLD CUP HOSTS!!!

 

[Admiral Byng]

Whatever. You are willfully missing the point, so I shan't bother you any further with reasoned discussion.

 

[vinnie]

I reckon if you saw a list of what the government spent your taxpayer money on, then put next to it the social cost/benefit of each expense, you would find much bigger wastes of money than the soccer bid - with no social benefit! This issue's not world cup versus hospitals as you're trying to make it - the issue is where both of these sit in all the other spending priorities of the government.

If you're fairdinkum about saving money for hospitals etc, there's a lot more the government could be doing to save money (insulation rort, mining advertising, etc)

I'm big on promoting community health so if a world cup get's people interested in sport, even any sport, what's your problem? Are you considering the health benefits at the other side? (This is also a point that other annoying AFL-fanatics fail to realise). Name another way the government can spend money to get people active? Are you gonna say advertising campaign or health summitt???

Better doing a world cup then wasting on grand prix, NYE firework's etc. Spending on hospitals should always be a priority but let's look at other ways to help avoid the overload in the first place!

 

[Admiral Byng]

I am against waste of taxpayer money wherever it happens. The sums of money we are talking about for the World Cup are much larger than any other previous event, plus they are of a scale that would have macroeconomic impacts. We shouldn't automatically assume that all of it will be good or beneficial. I see only cons and no pros.

 

[Michael2010]

I fail to see how anything is a waste of tax payer funding if Australia is reaping a profit from it.

I love the economic analysis of some really confused individuals on this forum, the analysis goes oh so we got to spend 27 billion to get 36 billion back mmm interesting for me even looking that way that's a 9 billion dollar return alone.

36billion - 27billion = 9 billion in the positive (maybe people need to learn maths)

Anyway forget the 9 billion surplus that we'll get from the world cup in that analysis, let's look at where this so called "spend" is going into developing infrastructure. It means jobs for Australia, spending on areas such as western Sydney which needs help and development of Australia's transport and sporting infrastructure which will be of major benefit to everyone including arguably the most the AFL. I fail to see how 27 billion dollars "spent" on Australia to benefit Australia for the future is a waste of money and the stimulus will not all come from the government but from the private sector as well and overseas investment into Australia. It also supports other sectors within Australia such as Tourism which again needs assistance, events, hospitality, retailers etc etc etc

So we can host 2 Olympics which are the 2nd largest sporting events on the planet and reap benefits from them but we can't get anything from the Football World Cup being here which is the No 1 sporting event on the planet? Who are you kidding honestly? The football world cup money bonanza is growing and growing by 2022 we can only imagine how much of a benefit it will be for Australia to host the event. It's at a minimum of 36 billion, for me if Australia wins this bid, the returns will be far far greater than that. Waste of money? What? Who are you kidding? If you are making a profit (I don't know how people in some areas do business), that means you are actually making money not wasting or losing anything

 

[Michael2010]

[YOUTUBE]jLNSlFL34Fs[/YOUTUBE]

 

[Admiral Byng]

I think I'm competent enough to make my own judgements on the economics side of things. I think my approach and interpretation is the correct one. I think you are confused if you see all of it as positive.

 

[Zidane98]

In the eyes of most AFL fanboys that hate our world game of football, a simple theory is applied in regards to hosting the World Cup: Any economic study/report which suggests that the World Cup is economically viable must be incorrect/only positive because the FFA/Federal government have conspired together and paid off one of the largest independent auditors in the world (PriceWaterhouse Coopers) and any economic study/report that suggest the World Cup isn't good for the economy automatically becomes gospel and must be the truth.

In reality, many of the economic "reports" suggesting that the World Cup isn't economically viable are written by deluded anti government economic "experts" who have a beef with governments/authorities in general. Similar to the bloke who tried to stop the Economic stimulus package going ahead (which proved a godsend to our economy and stopped it from going into recession, interestingly enough not one of the AFL fanboys complained one little bit when the government committed 42 billion dollars of their precious taxpayers money). Most of these blokes who write these reports are about as reliable as asking Jason Akermanis whether he thinks the Western Bulldogs are a good, honest club.

 

[Watergate]

...that is why [the AFL] is able to own (in 2025) a billion dollar asset like Docklands, completely funded by private equity..

As many people have suggested, Etihad Stadium - just like Waverley Park - is likely to be a White Elephant owned by the AFL.

In fact, it may not take that long.

That allegedly "billion dollar asset" may be losing millions of dollars in value every day and, according to one of the most influential voices in the AFL, it may be time to bring in the bulldozers and demolish Etihad and build a new brand new Stadium down the road!

Given that the FIFA delegates are in town to check out potential WC2022 venues, thank heavens Andy & Collo stood firm and said "no to WC games at Etihad".

 

[Giants FC]

Benefit = Income - Cost
Cost = $27 billion
Income = Amount spent by foreigners in Australia with Australian companies x company tax rate %

Money spent on the World Cup by Australians can not be counted as an economic benefit, as this does nothing more than divert money that would otherwise occur elsewhere within the Australian economy.

The number of visitors to Australia from a World Cup has been estimated at between 150,000 and 500,000. For the sake of the exercise, we’ll assume the maximum projection of 500,000 people visit Australia for the World Cup. We’ll also assume that every dollar they spend goes to an Australian company that pays company tax in Australia, and that overseas companies and FIFA don’t pocket a cent.
To generate a breakeven, the 500,000 visitors would need to generate enough income to collect $27 billion in taxes. Assuming a company tax rate of 30%, the 500,000 people would need to generate $90 billion. In other words, each and every visitor to Australia would need to spend $180,000 with Australian companies for the government to recoup their investment.

($27,000,000 x 30%) / 500,000 = $180,000

I am skeptical whether this is achievable – noting that if it isn’t, then the World Cup adversely affects government fiscal policy. It would add significantly to government debt, which in turn affects interest rates and economic growth.

 

[Barkly St End]

Benefit = Income - Cost
Cost = $27 billion
Income = Amount spent by foreigners in Australia with Australian companies x company tax rate %

Money spent on the World Cup by Australians can not be counted as an economic benefit, as this does nothing more than divert money that would otherwise occur elsewhere within the Australian economy.

The number of visitors to Australia from a World Cup has been estimated at between 150,000 and 500,000. For the sake of the exercise, we’ll assume the maximum projection of 500,000 people visit Australia for the World Cup. We’ll also assume that every dollar they spend goes to an Australian company that pays company tax in Australia, and that overseas companies and FIFA don’t pocket a cent.
To generate a breakeven, the 500,000 visitors would need to generate enough income to collect $27 billion in taxes. Assuming a company tax rate of 30%, the 500,000 people would need to generate $90 billion. In other words, each and every visitor to Australia would need to spend $180,000 with Australian companies for the government to recoup their investment.

($27,000,000 x 30%) / 500,000 = $180,000

I am skeptical whether this is achievable – noting that if it isn’t, then the World Cup adversely affects government fiscal policy. It would add significantly to government debt, which in turn affects interest rates and economic growth.

Good analysis.

Even at $180,000 per visitor, that figure is actually too low.

You left out that those 500,000 visitors have to be "net" visitors, i.e. the number over and above what the nation gets on a regular basis in terms of overseas visitors.

What normally happens with these sorts of big events is that the normal trade in overseas visitors virtually dries up to nothing (with good reason).

In the case of SA, you will find that the visitors to SA during the month the WC was on was only marginally greater than the visitors SA get year on year.

So in your analysis above, it is extremely unlikely that Austalia would attract 500,000 net visitors for the WC. it would be a miracle if it's even 250,000 net visitors.

Even at the overly optimistic figure of 250,000 net visitors, that's arleady doubling the expenditure required to $360,000 per visitor!

 

[Stevie80]

Benefit = Income - Cost
Cost = $27 billion
Income = Amount spent by foreigners in Australia with Australian companies x company tax rate %

Money spent on the World Cup by Australians can not be counted as an economic benefit, as this does nothing more than divert money that would otherwise occur elsewhere within the Australian economy.

The number of visitors to Australia from a World Cup has been estimated at between 150,000 and 500,000. For the sake of the exercise, we’ll assume the maximum projection of 500,000 people visit Australia for the World Cup. We’ll also assume that every dollar they spend goes to an Australian company that pays company tax in Australia, and that overseas companies and FIFA don’t pocket a cent.
To generate a breakeven, the 500,000 visitors would need to generate enough income to collect $27 billion in taxes. Assuming a company tax rate of 30%, the 500,000 people would need to generate $90 billion. In other words, each and every visitor to Australia would need to spend $180,000 with Australian companies for the government to recoup their investment.

($27,000,000 x 30%) / 500,000 = $180,000

I am skeptical whether this is achievable – noting that if it isn’t, then the World Cup adversely affects government fiscal policy. It would add significantly to government debt, which in turn affects interest rates and economic growth.

Yourself and BSE have officially lost the plot. Without wanting to spend too much time explaining how flawed your ecomonics are, i do have one question to ask.

My question is: Why does the goverment need to recoup all money spent on the world cup in the 4 weeks of the world cup. If money is spent on infrastructure, the benefits will be received over a period of time, not all in one go and nothing in the future.

If i buy an investment property today for $300k, i do not expect to receive rental income of $300k for the next 4 weeks, i expect to receive a reasonable amount of rental income for the life of the property. I will also own an asset that has a capital value that may or may not be resold in the future. The same rules apply to building new stadiums, airports, roads, transport etc. Legacy items such as these will provide ongoing benefits, not a benefit for 4 weeks and then they will vanish off the face of the earth.

 

[Watergate]

Benefit = Income - Cost
Cost = $27 billion
Income = Amount spent by foreigners in Australia with Australian companies x company tax rate %

Money spent on the World Cup by Australians can not be counted as an economic benefit, as this does nothing more than divert money that would otherwise occur elsewhere within the Australian economy.

The number of visitors to Australia from a World Cup has been estimated at between 150,000 and 500,000. For the sake of the exercise, we’ll assume the maximum projection of 500,000 people visit Australia for the World Cup. We’ll also assume that every dollar they spend goes to an Australian company that pays company tax in Australia, and that overseas companies and FIFA don’t pocket a cent.
To generate a breakeven, the 500,000 visitors would need to generate enough income to collect $27 billion in taxes. Assuming a company tax rate of 30%, the 500,000 people would need to generate $90 billion. In other words, each and every visitor to Australia would need to spend $180,000 with Australian companies for the government to recoup their investment.

($27,000,000 x 30%) / 500,000 = $180,000

I am skeptical whether this is achievable – noting that if it isn’t, then the World Cup adversely affects government fiscal policy. It would add significantly to government debt, which in turn affects interest rates and economic growth.

Wow!! What a shoddy and unsophisticated piece of financial analysis. It may be what they taught in "home economics" at high school, but that's not the way you do a cost/benefit analysis!

The most glaring error is that your "benefit analysis" assumes that the infrastructure will never again be used after the 4-week WC? You're not serious are you?

So, your benefit analysis ignores 40-50 years' worth of "benefits"!

Additionally, off the top of my head, your "benefit analysis" must also include the:
* increase to employment (construction workers, tradesmen, engineers, architects, designers, building supplies/materials, etc. etc) traduring the construction phase
* increase revenue for the companies that benefit from the work leads to increase investment
* increase in taxes paid by said companies, employees, GST

I cannot believe that anyone, who has basic literacy in business or finance, would ever provide a "benefit analysis" of an infrastructure project and only assess "benefits" that accrue over a 4-6 week period!

I'm sending this post (and BSE's reply of endorsement!!) to contacts in the finance/banking industry - this could go "viral".

You may indeed get the "Fame", but "Glory" may evade you.

 

[vinnie]

How do the AFL soft turf loverboys on this forum explain why other countries that hold the soccer world cup, want to hold it again?

Japan, Korea, UK, USA - all want to bid for the rights again. Why, if it's a waste of money as you say?

I am waiting to be enlightened on why this does not count....

 

[Stevie80]

As many people have suggested, Etihad Stadium - just like Waverley Park - is likely to be a White Elephant owned by the AFL.

In fact, it may not take that long.

That allegedly "billion dollar asset" may be losing millions of dollars in value every day and, according to one of the most influential voices in the AFL, it may be time to bring in the bulldozers and demolish Etihad and build a new brand new Stadium down the road!

Given that the FIFA delegates are in town to check out potential WC2022 venues, thank heavens Andy & Collo stood firm and said "no to WC games at Etihad".

Fortunately FIFA dont want to use Eithad as they require the grass to stay still during world cup matches. Interestingly, the AFL have no problem with the surface and are happy for players to slip over and detract from game.

Also note that the new e-gate stadium will only be built if australia wins the world cup bid, and this stadium will be used to play games in melbourne. There is no way the victorian goverment would want only one venue used in melbourne during the biggest event in the world. It was not included in the book bid for political reasons.

 

[Oberfuhrer Abetz]

The games were held in nine cities across the country. All stadiums had a capacity of at least 53,000, and their usual tenants were National Football League or NCAA Football teams. The most used venue was the Rose Bowl in Pasadena, with eight games, among them the final, the third place match, a semifinal and a game of the Round of 16, followed by the Giants Stadium in East Rutherford, which had one semifinal, a quarterfinal and a round of 16 match. The least used was the Pontiac Silverdome, the first indoor stadium used in a World Cup, with four Round 1 matches.

From a Wikipedia link, as you can see during the 1994 WC pre-existing stadiums were used.

And for their future bids:

But there is no cause for any new construction whatsoever. In one or two stadiums they may need to manipulate the first couple of rows to make sure there is plenty of room on either side of the pitch, especially down in the end zones. There is some temporary installation that goes into dolling up a stadium appropriate for a World Cup, but no construction from the ground up. Each country is going to have a different budget and we haven’t actually got to the point of figuring out what it’s going to cost, although we are certainly working on it like crazy. I mean you are talking about hundreds of millions clearly, but that is offset by revenue stream so it’s not a drain on anybody.

http://www.worldfootballinsider.com/Story.aspx?id=32761

So hundreds of millions to our tens of billions...

and for the knobends going on about future productivity, the 2000 Olympics didn't leave any white elephants at an ongoing cost to the taxpayer did they?

EDIT: I should also add that both Japan and Korea have demolished stadiums due to the ongoing maintenance losses that were incurred.

 

[Stevie80]

Also interesting to note that nobody has questioned "The Brumby Government who commissioned a $2 million feasibility study into the development of a 40,000-seat stadium at the old E-Gate site, down the road from Etihad".

Would this be classified as a waste of taxpayer funds? The world cup bid has been critised on this forum for spending about $40m for a study that would benefit the entire country and includes many major infrastructure projects, however nobody here seems to have a problem with $2m being spending to look at the benefits of just one stadium.

 

[Footy Smarts]

Benefit = Income - Cost
Cost = $27 billion
Income = Amount spent by foreigners in Australia with Australian companies x company tax rate %

Money spent on the World Cup by Australians can not be counted as an economic benefit, as this does nothing more than divert money that would otherwise occur elsewhere within the Australian economy.

The number of visitors to Australia from a World Cup has been estimated at between 150,000 and 500,000. For the sake of the exercise, we’ll assume the maximum projection of 500,000 people visit Australia for the World Cup. We’ll also assume that every dollar they spend goes to an Australian company that pays company tax in Australia, and that overseas companies and FIFA don’t pocket a cent.
To generate a breakeven, the 500,000 visitors would need to generate enough income to collect $27 billion in taxes. Assuming a company tax rate of 30%, the 500,000 people would need to generate $90 billion. In other words, each and every visitor to Australia would need to spend $180,000 with Australian companies for the government to recoup their investment.

($27,000,000 x 30%) / 500,000 = $180,000

I am skeptical whether this is achievable – noting that if it isn’t, then the World Cup adversely affects government fiscal policy. It would add significantly to government debt, which in turn affects interest rates and economic growth.

Surely this line is a joke right? You honestly can't think of any other economic benefits that would come from a world cup apart from tourism spending purely during the month of the world cup itself? I haven't seen a proper cost benefit analysis in detail and am somewhat sceptical about the world cup being profitable, but seriously this sort of logic does nothing at all to support your cause.

 

[Footy Smarts]

EDIT: I should also add that both Japan and Korea have demolished stadiums due to the ongoing maintenance losses that were incurred.

Stadiums that were used for the World Cup in 2002? Which ones (they may have but a quick search didn't show any)? Also if this is the case why are both of these nations bidding for the 2022 world cup individually which means that they will need even more stadiums than in 2002?

 

[Oberfuhrer Abetz]

http://www.radioaustralia.net.au/connectasia/stories/201006/s2928296.htm

I must of been wrong.

Got the info from this link, I may have misinterpreted it and they meant to implode old stadiums to make way for new ones as I can't find any other sources.

Doesn't change the white elephant status of a lot of them though.

 

[AJ_2000]

Stadiums that were used for the World Cup in 2002? Which ones (they may have but a quick search didn't show any)? Also if this is the case why are both of these nations bidding for the 2022 world cup individually which means that they will need even more stadiums than in 2002?

This must be one of their key reasons for the bid - build more stadiums so they can demolish them, it must be good for the economy

 

[AJ_2000]

Benefit = Income - Cost
Cost = $27 billion
Income = Amount spent by foreigners in Australia with Australian companies x company tax rate %

Money spent on the World Cup by Australians can not be counted as an economic benefit, as this does nothing more than divert money that would otherwise occur elsewhere within the Australian economy.

The number of visitors to Australia from a World Cup has been estimated at between 150,000 and 500,000. For the sake of the exercise, we’ll assume the maximum projection of 500,000 people visit Australia for the World Cup. We’ll also assume that every dollar they spend goes to an Australian company that pays company tax in Australia, and that overseas companies and FIFA don’t pocket a cent.
To generate a breakeven, the 500,000 visitors would need to generate enough income to collect $27 billion in taxes. Assuming a company tax rate of 30%, the 500,000 people would need to generate $90 billion. In other words, each and every visitor to Australia would need to spend $180,000 with Australian companies for the government to recoup their investment.

($27,000,000 x 30%) / 500,000 = $180,000

I am skeptical whether this is achievable – noting that if it isn’t, then the World Cup adversely affects government fiscal policy. It would add significantly to government debt, which in turn affects interest rates and economic growth.

Funny funny stuff!

 

[Watergate]

...EDIT: I should also add that both Japan and Korea have demolished stadiums due to the ongoing maintenance losses that were incurred.

Unless you can provide evidence of such demolished stadia - your comment is factually incorrect.

There were 20 stadia used during the 2002 WC (10 in Sth Korea, 10 in Japan)

All 20 stadia are still standing and are being used by professional football clubs.

South Korea

1. Seoul World Cup Stadium
2. Daegu World Cup Stadium
3. Busan Asiad Stadium
4. Incheon Munhak Stadium
5. Munsu Cup Stadium
6. Suwon World Cup Stadium
7. Gwangju World Cup Stadium
8. Jeonju World Cup Stadium
9. Daejeon World Cup Stadium
10. Jeju World Cup Stadium

Japan

1. International Stadium Yokohama
2. Saitama Stadium 2002
3. Shizuoka "Ecopa" Stadium
4. Nagai Stadium
5. Miyagi Stadium
6. Ōita Stadium
7. Niigata Stadium
8. Kashima Stadium
9. Kobe Wing Stadium
10. Sapporo Dome