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Cost-benefit analysis says proposed Hobart Stadium would deliver $306 million deficit over 20 years

Cost-benefit analysis says proposed Hobart Stadium would deliver $306 million deficit over 20 years
January 20, 2023

A cost-benefit analysis of the cost of the proposed new stadium at Hobart's Macquarie Point commissioned by the Tasmanian Government has indicated that the venue would generate a loss of more than $300 million over 20 years of operation.

While analysis from MI Global Partners, commissioned by Tasmania's Department of State Growth, says a stadium in Hobart would stimulate "civic and community pride", it suggests the cost of the planned venue to be $1 billion, or $618.1 million in 2022 values, when factoring in costs for construction, operation, and acquiring events.

Completed in November but only published on the Department's website this week, the analysis estimates that over the 20 years after construction is complete, the stadium will generate $1 billion, largely through tourism and financial benefits.

However, when taking into account the costs of paying interest on borrowing to fund the venue, as well as alternative uses of that money, this was discounted to $311.9 million in 2022 values.

Overall, that will equal a $306 million loss, and a benefit-to-cost ratio of 0.5.

The report goes on to outline several additional social benefits that should be considered, but cannot not be quantified in a cost-benefit analysis.

These include "civic and community pride", improving Hobart's brand, increased participation in sport, and the stadium becoming a "catalyst for broader invigoration of Macquarie Point".

The analysis does not question the Tasmanian Government’s projected cost for the stadium, with a build cost figures in the region of $715 to $750 million having previously been revealed as having merely been a "ballpark" amount.

Construction of the venue, described as a "once in a generation" opportunity by the Tasmanian Government is opposed by the Tasmanian Labor and Green parties.

Request for $240 million in Federal Government funding
With the Tasmanian Government seeking $240 towards the supposed $715 million cost of the new venue, Australasian Leisure Management Publisher Nigel Benton has questioned what sort of precedent this would set for other planned venues, particularly the rebuilding of the Gabba for the Brisbane Olympics and the ACT Government's proposed new stadium.

Benton explains "such a commitment would be the largest ever by the Federal Government to a stadium, exceeding the $100 million for the Queensland Country Bank Stadium in Townsville - by 140%.

"Once such a commitment is made it would be expected that the ACT Government would seek a similar amount for its planned new Canberra stadium while the Federal Government’s in principle backing for 2032 Olympic venues in Brisbane, including the rebuilding of the Gabba, would very quickly rise towards $1 billion.”

Image: The AFL's latest concept for the proposed Hobart stadium. Credit: AFL.

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23rd December 2022 - Tasmania Government presents business case for new Hobart stadium

25th November 2022 - Gillon McLachlan to stay on as AFL Chief Executive until April next year

18th November 2022 - AFL reveals in-principle agreement for Tasmania expansion team

12th November 2022 - AFL 2023 season to feature ‘magic round’ in South Australia

18th October 2022 - AFL commits to developing more than 250 new club ovals over five years

21st September 2022 - Tasmanian Government’s AFL licence bid sees it increase financial commitment

14th September 2022 - Telstra unveils Australian-first 5G innovation for visually impaired AFL fans at Melbourne’s Marvel Stadium

13th September 2022 - Hobart CBD to be revitalised as cultural destination with new ‘In The Hanging Garden’ precinct

17th August 2022 - Tasmanian Premier says JackJumpers’ success provides a strong message to AFL decision-makers

9th June 2022 - AFL’s Gillon McLachlan says new stadium key to Tasmania’s bid for 19th competition team

4th June 2022 - Documents suggest cost of Hobart stadium will be higher than $750 million

28th May 2022 - Tasmanian budget backs AFL Team Taskforce and stadium feasibility study

1st March 2022 - Tasmanian Government unveils plan for Hobart waterfront stadium

25th August 2021 - Decision on Tasmanian AFL expansion team to be made in 2022

13th August 2021 - AFL report fails to present ‘clear cut’ option for Tasmanian team

21st May 2016 - Planned new Townsville Stadium not financially viable

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