As the row over the future of the Australian Grand Prix at Melbourne continues, a report tabled the Victoria State Parliament today, calculated that race costs exceeded benefits by $6.7m (AUD) in 2005.
According to the Herald Sun, the State Investment in Major Events report has found the 2005 event cost $69.8m to stage, whereas the net benefit was $63.1m.
Consequently, Victoria's Auditor-General Des Pearson has called for better evidence when supporting major events in order to ensure that taxpayers are getting value for money.
However, Pearson recognises that Grand Prix and other events such as the Commonwealth Games and Melbourne International Jazz Festival add economic, social and community benefits for Victoria.
Referring to the audit, Pearson said, according to the Herald Sun: "This audit makes out a powerful case that the economic assessment models currently used now warrant concerted re-evaluation and further development if government is to have the best available information on which to make decisions on whether to financially support particular major events."
The organizers of the Australian Grand Prix, the Australian Grand Prix Corporation (AGPC), which is headed by Bernie Ecclestone's close friend Ron Walker, was critical of the report, claiming that it failed recognise the brand exposure, tourism and business promotion benefits from the Melbourne event.
Meanwhile, Tourism Minister Tim Holding claims that economic assessments are not an "exact science", and that he had faith in independent reports which calculate the value of the Grand Prix at $170m.
"We have confidence in the methods that we have used historically to measure and judge the effectiveness of our major events - which is the most successful tool this state has for marketing everything great about Victoria on a world stage," he said.
"It is important that measurement is not only of the economic benefits of major events but also of international exposure, destination branding, induced tourism, industry development opportunities, employment opportunities and social benefits and legacies."