The state government is refusing to help fund Flemington’s new grandstand Photo: Paul Rovere Gai Waterhouse trained horses Bohemian Lily, Ecuador and Excess Knowledge. Photo: Vince Caligiuri
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The state government is refusing to help fund Flemington’s new grandstand, despite spending much larger amounts on the grand prix which only provides Victoria with a fraction of the economic benefit of the Melbourne Cup Carnival.
The Victoria Racing Club is considering slashing the prize money on offer for the Melbourne Cup due to the standoff, as it will have to take on tens of millions of debt to fund the $120 million grandstand project. Any cuts to prize money would diminish the appeal of the event to overseas racehorse owners and trainers.
Last month Victorian Premier Daniel Andrews took to Facebook to announce his government had scored a three-year extension of the Melbourne Grand Prix to 2023. The event cost Victorian taxpayers $61 million last year, and provided just $32 million of economic benefit to Victoria. In contrast, the Melbourne Cup Carnival provides an estimated $375 million of economic benefit to the state.
“The VRC funds the Melbourne Cup Carnival to the tune of $50 million annually, and the benefits to the state are multiplied many times over,” said the club’s chief executive Simon Love. “Last year the carnival injected $375 million of economic benefit to Victoria. No other event delivers so much to the state.”
The Department of Treasury and Finance rejected the request for funding, believed to be in the vicinity of $30 million, even though the stand is ready to build and will create 350 construction jobs in Melbourne’s inner west.
The snub to Flemington is causing division within the Andrews cabinet. “This is our original major event, and the stand at Flemington is shovel-ready as a project, but the bureaucrats in [the department] have made the decision they won’t fund it,” said one senior ALP figure.
Treasurer Tim Pallas defended the decision, saying the club’s proposal for government support for a new members’ grandstand “would have to be considered against other budget priorities”.
“We are happy to continue discussing possible financing arrangements with the [club],” he said.
Racing Minister Martin Pakula said since his party came to power the Victorian Racing Industry Fund had given the club $1.7 million in other forms of support.
The prize pool for this year’s Melbourne Cup is $6.2 million, of which the winner receives $3.6 million, making the race the richest handicap event in the world.
Mr Love said that prize money would fall if the club was forced to borrow funds to build a replacement for its ageing grandstand.
“If we have to take on significant debt, the money has got to come from somewhere,” Mr Love said. “Right now the club contributes millions of dollars of additional prize money to attract the world’s best horses. We also spend a significant amount to attract interstate and overseas visitors. We may in future be in the difficult position of having to balance continued investment in these areas with a requirement to repay the debt.”
The club unveiled its $120 million replacement for the historic members’ grandstand at Flemington in 2014, and had planned to open the new facility in time for the 2017 Melbourne Cup.
The grandstand is designed by Bates Smart, the architects behind Federation Square, Crown Melbourne and the Royal Children’s Hospital. The venue includes three restaurants, eight bars and a rooftop garden, and will be built on the site of the existing stand.
The impasse over funding has angered many at the club, especially as Tennis Australia received $297 million to help build the next stage of Melbourne Park.
The Melbourne Cricket Club was also awarded $90 million under the Bracks government to fund the redevelopment of the MCG, including a new members’ stand.
“Unfortunately this could mean in future that the club does not have the financial capacity to upgrade other permanent facilities such as the Hill Stand, which was built in the 1970s,” said Mr Love.
“The Melbourne Cup Carnival is a world class event, and to ensure its continued success we need Flemington to also have world class grandstand facilities.”
Racing Victoria chairman David Moodie said all four of Melbourne’s metropolitan racetracks needed investment.
“Flemington’s old grandstand is certainly past its use-by date,” he said. “But it’s an expensive exercise for a club to take on.”
The decision comes as the NSW government ramps up spending on racing. In 2010 the NSW government announced $175 million of funding to help construct new facilities at the Randwick and Rosehill racetracks.
In June this year, the Baird government announced a cut in racing taxes, to help lift prize money in NSW and turn The Championships into a rival for Melbourne’s spring carnival. “The Championships will aim to overtake Melbourne’s Spring Carnival as the premier event on the Australian racing calendar,” Premier Mike Baird said at the time.
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