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A proposed new Australian Football League (AFL) stadium in Tasmania could boost the local economy by more than A$2.26bn (£1.15bn/€1.34bn/US$1.45bn) over its first 10 years, according to a new cost-benefit analysis of the controversial project.
The report by Russell Hanson, a former finance director of FitzGerald’s department stores, found that the stadium at the Macquarie Point site in Hobart could bring A$226.61m per year to the state.
Construction of the A$715m waterfront stadium was a condition of the AFL granting a licence to Tasmania in May for a team that is lined up to enter the competition in 2028.
However, the 23,000-seat roofed stadium, which is backed by the Liberal state government, has attracted vociferous opposition from locals, with thousands attending a protest rally in May.
“These benefits make it quite clear that the new stadium is no ‘dud deal’ as has been claimed,” said Hanson, who used a 2017 study by PwC as one of the pillars of the new report. “This huge economic benefit is further demonstrated on examination of the PwC analysis of the Hawthorn games in Launceston and applying the same methodology to the new stadium, the economic returns are substantially positive, ongoing and an opportunity this state can’t afford to lose.”
In an interim report released earlier today (Wednesday) though, a parliamentary committee responsible for scrutinising the development raised doubts about economic projections in previous reports, which were used as the basis for Hanson’s estimates.
“Many of the assumptions contained in the various reports provided to government, including the PwC and MI Global Partners reports, are not comprehensive or detailed to enable a meaningful cost-benefit analysis to be determined,” the report stated. “These reports have significant gaps – for example, the absence of assumptions related to opportunity costs and implausible event attraction details.”
In May, the state government released details of its licence agreement with the AFL in a bid to be “open and transparent”.
The agreement released to the public confirms that the Tasmanian government’s funding pledge totals A$460m, which includes the A$375m stadium commitment and a further A$85m to be procured through borrowings against land sale or lease for commercial uses.
The document also confirms the state government’s commitment of A$60m to assist in the establishment of the team’s operations and to construct a high-performance centre for use by the team; and operational funding of A$12m per year for 12 years from the team’s entry into the AFL and AFL Women’s competitions.
On top of the A$15m it will contribute towards the stadium, the AFL will invest A$10m into the club’s training ground and administration, A$90m in game development, A$33m into development of young talent, and A$210m in distributions to the new club over the first 10 years.
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