Mat Coch writes:

This Australian Grand Prix cost the Victorian State Government £36.3million in 2012, a report released today has confirmed. Propped up by the government on the notion that the cost to the state is outweighed by the event's economic impact, it's the sixteenth straight year the event has lost money.

According to Tourism Minister Louise Asher, the 2011 event generated a direct economic impact worth somewhere between £20.5million and £25million, while additional media exposure could see that figure rise as high as £47.4million. It means the Australian Grand Prix saw an £11.1million return on its investment.

"This is a very, very expensive race and I personally am not happy with this level of subsidy," said Asher. "The Brumby Labour government signed off on a contract that is too expensive for the taxpayer in my opinion.

"What the (Victorian Premier, Ted) Baillieu government is trying to do is manage a major event which has real benefits for Melbourne and regional Victoria within the parameters of the contract we inherited," she added. "As tourism minister I don't have Sydney Harbour; I don't have the Great Barrier Reef.

"One of the ways that we've marketed Melbourne over the years is to hold major events to assist us in that branding."

Asher also claimed that, when negotiations for the event's next contract begin, the government will be looking to reduce its funding. By that time however it is estimated Victorian taxpayers will contribute more than £48million.

"We are strongly of a view that the Grand Prix has been good for Melbourne, good for Victoria," said Ted Baillieu. "The Grand Prix is one of our key major events in Victoria and our major event strategy has served Melbourne and served Victoria very well."

However, sceptics of the race have long argued the true economic impact, calling for public enquiries in to the race's benefit which have been ignored by the state government. While generally well attended the race is unpopular with locals who have grown tired of the disruption to their city every March.