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Choices, choices: waste at Pukekohe

Written By: - Date published: 7:05 am, July 6th, 2012 - 56 comments
Categories: capitalism, sport - Tags:

You know how the Government is so skint, and absolutely much get back into surplus by 2014/15, that it has cut education at every level, cut conservation, cut home insulation, cut Kiwisaver, cut Working for Families .. etc etc. They even created a new super-ministry to cut costs. And what’s the first action of Mobie Dick? $2.2 million sunk into Aussie V8s.

The Government money is in conjunction with $10.5m from the Auckland Council and will go to hosting 5 years of the V8 Supercars at Pukekohe.

But hang about, isn’t this the race that half bankrupted Hamilton after the council there spent $40m for 5 years of races? Yup.

Now, Auckland Council says they’re more clever. They wasting $10.5m and not a cent more!

It’s an outrage, of course. This is the Council that insisted on unrealistic returns from the Port, which led to the attempt to contract out the workforce to cut costs. And what do they do with those returns? Fritter them away on some stupid car race. If people want to see a car race, let them pay for it.

In Hamilton, they got 100,000 people along over the multi-day event. Repeat that in Auckland and the subsidy would be $25 per attendee per day per year.

The Council and the Government claim that the event will bring in tourism. Which is just rubbish. A few thousand fans might come from around the country, but that’s no net gain to the economy, no export earnings from that. Is anyone going to fly to New Zealand to see the V8s? Not likely. The Council estimate – and we all know these estimates are ust made up numbers that never come true – is that it will result in 50,000 more visitor nights over 5 years – so, that’s a spend of $200 from the Council per visitor night gained. Smart investment, guys.

Hearing the councilors claim that V8s would attract people to Auckland reminded me of the resident of Springfield in the South Island who enthused that the new Simpsons-style giant doughnut will attract tourists – yeah, right.

Of course, we know the rort here, even if the councilors have fallen through it. Just like PPPs, the trick is to get the government or council to sink a pile of money in with the promise that is all you’ll ask for. Then come back a little later: ‘oh, no! there were cost over-runs! It’s all going to fall over and your money will be wasted! Unless we can have a few million more…’. Then a little later, another cost over-run and the prospect of writing off a sunk cost or handing over a little more.

Every con man in history knows which way people will instinctively go: they’ll spend and spend to try to legitimise their previous mistake, rather than walk away from an obvious rip-off.

And, so this is what your government and your council, if you’re in Auckland, are doing with your money. This is why they’re cutting education and trying to cut the wages of port workers – so that the owners of an Australian racing series can make some profits and people who want to go see a race can get a big subsidy.

Finally, I can’t help but note that National’s spin on its local government reforms, which would undermine local democracy, is that councils need to stick to their knitting and not spend money on non-core services. And here they are, spending money in conjunction with a council to finance a purely commercial enterprise. I guess words are cheap.

56 comments on “Choices, choices: waste at Pukekohe”

  1. Half Crown Millionare 1

    Here we go again the right wing overseas beneficiaries are at the trough AGAIN The right wing fuckwits are always screaming about how we have to stand on our own two feet with a bit of rugged individualism, but you can get killed in the rush of these people expecting others to subsidise their lifestyles.
    Not only did the V8’s nearly bankrupt Hamilton city council but the not so well off rate payers have to pick up the massive debt. Also Waikato Regional Council has given another group of beneficiaries a large hand out for building an elitist Velodrome at a heavily subsidised private school in Cambridge. Let’s see a bit of the conservatism on the part of these bludgers. If their fix is riding round and round dressed in a stupid lycra get up good on them but don’t expect me to subsidise that or bloody V8’s when services locally and nationally are being cut
    Once again reverse socialism or as Geoffrey Palmer said so eloquently a few years ago “the needy subsidising the greedy.”

  2. andy (the other one) 2

    So you don’t like V8’s..

    Are happy with other loss making activities of council:

    The Zoo
    Trams at Wynyard quater
    Pacifica festival
    Re sanding of beaches
    The lantern festival
    Music in parks
    The art gallery
    The edge (Aotea centre)
    Libraries

    As a Ratepayer I understand that council has to be involved in all sorts of activities to make Auckland a great city FOR THE RESIDENTS as well as visitors.

    I am not sure how the V8’s have anything to do with education cuts. Just sounds like you don’t like an activity associated with the infamous ‘Waitakere man’. The Government contribution is well covered by the GST take from the weekend.

    I am glad you support cutting all funding for the arts in the Next Auckland City Budget.

    • Urban Rascal 2.1

      F*** I’m glad someone else has the sense that you have.
      Hamilton lost that money because it was a street race shutting down large areas of productive business, atleast a major part of this.
      In comparrison Pukekohe already has a racecourse, it gets an upgrade which is great for motorsport (something we actually tend to do well) and the businesses in the area get a boost in business. I would put money on most V8 attendees spending more than $200 outside of the event in the Auckland Economy, plus it’s something that alot of people that don’t use libraries or art galleries will attend. Our biggest city should have events like this, it’s in the benefit of the cities image and that there are events for the residents.
      Wasn’t much complaint about RWC, god-forbid we complain about Rugby.

      • bbfloyd 2.1.1

        So you are stating unequivocally that the v8 races will be staged at the Pukekohe raceway? Not street racing, as was done in hamilton, or proposed for auckland(sensibly vetoed by auckland council), and wellington?

        Because if it’s being run at the track, why the need for millions of dollars of public funding? Can one of the clever apologists explain that to us ignorant plebs?

        • bbfloyd 2.1.1.1

          And another thing..if this is going to be so profitable, and receive so much valuable patronage, what is the need for public funding in the first place? Or are we looking at just another example of subsidies for the “greedy by the needy”?

          Great! so taxpayers, and ratepayers get to pay for rich boys to play with their boy toys, who will be the same ones to profit from it?

          how stupid are we…… really?

        • Urban Rascal 2.1.1.2

          Why the need for $??? towards each of these:

          The Zoo
          Trams at Wynyard quater
          Pacifica festival
          The lantern festival
          Music in parks
          The art gallery
          The edge (Aotea centre)
          Libraries

          How come noone is asked to justify my rates towards these funding choices which I never use?
          I’m not going to say the amount funded to the V8’s is right but don’t turn the event into the scapegoat when the real issue is local government funding of non-essential events/venues.
          I think the focus is being put on the event rather than on the council’s ability to fund these things

          [lprent: Amazing how identical this is to a message left this morning by someone else. I think that the order ofthe list is in fact identical.

          Trolling is a bad idea around here. I’m liable to investigate and start doing copycat bannings to show my sympathies for the tribulations of cut’n’paste blogging. ]

          • Orgo 2.1.1.2.1

            It’s called an oaf tax. It’s the means by which you compensate society for inflicting churlishness upon it.

  3. JH 3

    I do support cutting council funding for the arts. There’s a million things I would prefer the money spent on.

    There’s a reason this post is called ‘choices, choices’. It’s not about whether V8 racing is good or bad. It’s about whether it should be something the council and the government should be spending money on.

  4. I agree that this is a silly idea. Giving a public subsidy to allow oversized cars to go round and round in circles and burn up precious fuel and produce greenhouse gasses is the height of stupidity.

    I am surprised that the Councillors were not allowed to see the financial analysis because of “commercial sensitivity”.  They had the option of having the agenda item treated as a confidential item.

    Politicians are elected and paid to analyze and ask questions.  Being given a sanitized summary of the merits does not cut it. 

    • JH 4.1

      That’s an absolute outrage, that they weren’t allowed to see the financial analysis and then they went ahead and voted $10.5m away anyway.

      Just another response to the people who support this government and council funding because they like speedway – it’s the same logic as the roads of national significance, it’s great for the people of Wellsford to get a massive four-land motorway that will always been 90% empty to drive on. But that doesn’t mean it’s an optimal use of that money from a national perspective. So, do we make decisions with government money based on the interests of those who would individually benefit from a project or on whether that project delivers the most value to New Zealanders collectively that we can get for that money?

      I like cricket but I would rather see more state houses built than see cricket subsidised by the taxpayer (and, yes, I know it is). Do you prefer government money spent on speedway over more teachers?

      • mickysavage 4.1.1

        Councillor Cathy Casey has written to the Auditor General about it.  Her letter includes the following:

        “Yesterday at the Governing Body meeting of the Auckland Council representatives from ATEED refused to give councillors copies of the due diligence report that was commissioned from Omega on the parties to the V8 deal at Pukekohe. Instead, councillors had to rely on a 250 word précis placed in the confidential section of the meeting. A reported risk review was similarly withheld.

        I am dumbfounded that a Council Controlled Organisation can refuse to disclose to councillors a ratepayer-funded due diligence report ahead of a major decision involving $10.6m of ratepayers’ money.

        How can Auckland Council make a decision on the economic risks of the proposition without the information they need to assess the risks? Why can this information be made available to the unelected members of the ATEED Board. Ahead of yesterday’s decision it had not been seen by Auckland Councillors, the Mayor, our CEO or our CFO. I checked that fact at the meeting.”

        Bloody CCOs.  Fancy not providing the report. 

        • higherstandard 4.1.1.1

          So did she vote for or against it, how about the other councillors and the mayor ?

          • mickysavage 4.1.1.1.1

            Don’t know.  From what I have read, Cathy, George Wood and Cameron Brewer opposed the proposal.  They make an unlikely grouping!

            • higherstandard 4.1.1.1.1.1

              Anyone who voted for it without viewing a complete financial analysis should be summarily executed……. yet more largesse courtesy of the taxpayer’s tit.

              After reading the local rag at afternoon tea and seeing the ARTA pissing money away I’ve had enough.

        • Tiger Mountain 4.1.1.2

          The CCO behaviour echos a sixties “catch 22” scenario.

          This would have been the perfect chance to let V8 Supercars quietly depart the NZ stage, but no, Minister Joyce and the Council charge on regardless. Andy (too) below is right about ratepayers cross subsidising all manner of things they may not personally be into, but the situation described by Cathy Casey seems appalling given the recent fall out in Hamilton.

          As a long time car racing fan I realise the sports days are numbered really in the medium term at least and this was going to be my last year following the V8s due to a change in format (COF), historics only (F5000 etc) for me now. V8 Supercars have joined F1 and NASCAR etc as corporate brands rather than genuine sport, Cochran bought out the controlling interest of the teams a year or so back and is going for as many international dates as possible.

          These events are such rip offs like other professional sports fixtures, take your picnic hampers and a six pack to Puke? Not likely, take your cards or cash for the overpriced concessions, t-shirt with that?

    • andy (the other one) 4.2

      From the 2009 season onwards, cars run on E85 fuel consisting of 85% ethanol, which while reaping the benefits of a fuel largely made from a renewable resource has seen a marked increase in fuel consumption.

      Agreed Council needs to do Due Dilligence on everything, but no one bats an eyelid at $200million plus for the CRL land buy up, or the millions spent each year pouring perfectly good Pakiri sand on Kohi beach, just to be washed away again.

      This all has a whiff of elitism, don’t like it because its, its, its just bad ok!!! And white boguns may just have some fun which is icky..

      http://en.wikipedia.org/wiki/V8_Supercars#Power

      • Zetetic 4.2.1

        You like the big cars and you want the rest of us to subsidise your tickets, we get it.

        James isn’t saying you can’t watch your races, just pay for it yourself rather than with public money, which means cuts for public services.

        • andy (the other one) 4.2.1.1

          I wont be going, too expensive. Gotta pay my rates 🙁

          My point is, in a modern society you don’t get to pick and choose just because you personally don’t like it.

          We all have to cross subsidise “other peoples’ events.

          Flip it around and replace’ V8’s’ with ‘Pacifica Festival’ and your argument is straight outa Kiwiblog.

          EDIT: Puke is a pretty shit venue too, but the punters take the train there 🙂

          • Half Crown Millionare 4.2.1.1.1

            With respect Andy, I feel you are missing the point. I love my cars and car racing, but the main point people are making is that we are in austere times and despite rates increasing at alarming rates, suddenly Auckland Council and the Government can find massive amounts of money for the V8 racing.

            I agree with what you are saying about other social events and I am all in favour of “user pays” but it is about time those on the right who preach this started to practice it.
            The only people who are going to come away making money out of this will be the V8 organisation.

            On past experience with this event, the money Auckland council is putting up is just the starters. It is well documented how state governments in Australia have ended up forking out more than was originally thought with the central government having to step in to help with the massive increase in finance required.

            After the Hamilton fiasco they ended up with $40 million in debt. What makes Auckland City Council and the Government think they are going to be any different? Watch this space as the costs based on experiences of Australian cities and Hamilton will soar. And who will pay the bill? The long suffering ratepayer.

            • andy (the other one) 4.2.1.1.1.1

              You can’t compare a dedicated race track to a street circut. Hamilton lost mega $$$ because they had to shut down streets for a week, Dig up traffic islands, take out light poles and then reinstate it all.

              Canberra gave away its V8 street race for the exact same reason and stupid hamilton thought they were smarter. I oppose any street race in Auckland

              Apples and oranges..

              The well documented part is that street circuts are money losers.

              People who make money:

              Puke bar owners
              Puke food retailers
              Puke Hotelliers
              Grid Girls
              Hot dog vendors
              NZ treasury

              • Half Crown Millionare

                Good article in the today’s Herald that blows you argument well and truly out of the water.

                http://www.nzherald.co.nz/motoring/news/article.cfm?c_id=9&objectid=10817712

                • andy (the other one)

                  All the races were street races, not circut races so apples and oranges again.

                  • smokeskreen

                    What happened in NSW then where it was not a street race and according to Brian Rudman’s NZ Herald article “The public cost of the race ended up $10 million more than the $35 million cap approved. To make matters worse, the estimated economic benefit was more than 24 per cent less than projected.”

                    • andy (the other one)

                      The race was held on the STREETS of the olympic park in sydney, not a dedicated, built for purpose circut.

                      Rudman does not understand the difference and is equating two completely different things, apples and oranges in costs.

                      The costs of running street v circut is ridiculous. You have to install safety and seating.

              • Draco T Bastard

                You can’t compare a dedicated race track to a street circut.

                If they’ve already got a race-track then why is the city having to subsidise it at all?

                I tend to agree with your cross-subsidisation point (societies work through cross-subsidisation) and I mostly oppose this spending on Climate Change and sustainability grounds and would like to see the full break down of the fuel used as to it being made from renewable resources (a lot of the time ethanol isn’t).

                • I tend to agree with Andy that you can’t compare the two races.
                  The commercial sensitivity issue is troubling but I think that should be looked at on a larger scale than in regards to the V8’s. They should address a policy that allows the public to be uninformed on their contributions and it’s uses.

                  I find motorsport boring and uninteresting, but think it’s all to easy for alot of people to use this as an excuse to get up in arms about council spending because 1) they have disdain for the supporters of motorsport and 2) like me, they have no interest in the event.

                  I’m sure the council is spending millions on dozens of projects that large parts of Aucklands population will never use but we rarely hear a complaint. We should accept that in our largest city we do need to support our branding and image globally with an events programme that provides for visitors and citizens across the board. Not just the wealthier that would be more inclined to heading to Convention centre cabaret’s, Viaduct racing events and art gallery shows etc etc etc.

                  • Draco T Bastard

                    We should accept that in our largest city we do need to support our branding and image globally with an events programme that provides for visitors and citizens across the board.

                    No, actually, we don’t. The city is not a commercial enterprise.

                    • Urban Rascal

                      Well ok, you don’t have to accept it of course.
                      I think all cities are enterprise. In a perfect world, not for profit and for the incentive of providing for their citizens and aiming to provide incentives for more residents and more investment. So the image of the city to societies outside of themselves is important and marketing and branding are relevant as in all enterprise.

                      The wellbeing and enjoyment of all their base market is their priority and this race will provide something to atleast 100,000 people a year plus the racing community of New Zealand with the upgrade. I’d dare to say it will provide more than some other council funded events when looking at them in proportion.

            • ghostwhowalksnz 4.2.1.1.1.2

              Been there done that – hello David Beckham soccer match, that wasnt supposed to lose money either, all up about $2 mill

          • felix 4.2.1.1.2

            “Flip it around and replace’ V8′s’ with ‘Pacifica Festival’ and your argument is straight outa Kiwiblog.”

            Wanna back that comparison with some numbers? What does Pacifica cost and who pays? How many attend? How much is generated in profits?

            I have no idea of any of that but I guess you must know.

            • andy (the other one) 4.2.1.1.2.1

              I don’t know about costs to rate payers for Pacifica, but they fence off the park for a week and allow profit making from vendors.

              Council has to clean up and reinstate the park.

              My comment was in relation to Z saying ‘You like the big cars and you want the rest of us to subsidise your tickets, we get it. ‘ so I said “Flip it around and replace’ V8′s’ with ‘Pacifica Festival’ and your argument is straight outa Kiwiblog.”

              Same rules apply, we all subsidise stuff we don’t go to or neccessarily like.

    • prism 4.3

      Commercial sensitivity sounds like secret deals and that pollies come out with that when carrying out public business is an excuse too often heard. We the public may have to carry out watergate type investigations if these people spending the public’s money refuse to include them in considering ‘nice to have’ projects.

      The idea of having to pay anything for holding this gas guzzling race for boffheads and then incurring an environmental charge for emissions is peculiar and just seems a bit WRONG.

      • Draco T Bastard 4.3.1

        Commercial sensitivity sounds like secret deals and that pollies come out with that when carrying out public business is an excuse too often heard.

        When the people paying for something (in this case, the taxpayers) don’t get to see what they’re paying for due to Commercial sensitivity then it should automatically be dropped as there’s too much room for corruption in that secrecy.

    • smokeskreen 4.4

      Secret squirrel stuff! Councillors who are sidelined with limited information (“sanitised” by the executive?) and then expected to make an “informed” decision on $10.6 million expenditure of ratepayer monies. Who has done the analysis and negotiations in this deal? Sadly it has all the hallmarks of Hamilton’s experience.

  5. Jenny 5

    All the real petrol heads take their holidays to coincide with Bathhurst, and fly to Aussie for the week.

    Will Puke ever rival that?

  6. smokeskreen 6

    I am not against V8 racing, but it is a risky venture to be pouring ratepayer and taxpayer monies into. The Hamilton experience with this race is well documented in the damning Audit Report on the subject. Also well documented is the experience of Australian Cities with this race. In addition to State Government funding, many also required hefty taxpayer contributions to subsidise them in hosting this, because many of the claimed benefits were exaggerated and not achieved. Don’t forget also that Australia has a much larger population base than NZ.

    Isn’t Local Government reform all about Councils sticking to “core” services? Surely this can’t be considered a “core” service.

    • Draco T Bastard 6.1

      In addition to State Government funding, many also required hefty taxpayer contributions to subsidise them in hosting this, because many of the claimed benefits were exaggerated and not achieved.

      IIRC, there a report that showed that such sporting events invariably ended up costing the hosting city/nation far more than the supposed benefits were.

      How much did the RWC end up costing NZ?

      • Colonial Viper 6.1.1

        It cost us our dignity for starters. We looked like a country which could not organise a piss up in a brewery.

        • prism 6.1.1.1

          CV Hey don’t get us confused with those two hopheads locked in to the brewing room in the Tui advert!

          • Colonial Viper 6.1.1.1.1

            Haha. I was talking about the complete inability to transport people to and from the opening ceremony after years and years of planning.

            • prism 6.1.1.1.1.1

              CV
              Yes I was watching the Chinese opening ceremony on youtube and started thinking about the mother from South Auckland so looking forward to her son’s once in a lifetime participation in the WRC opening extravaganza. Missed it – stuck in a stationary train.

  7. Tom 7

    What an irresponsible waste of prehistoric carbon !

    As for Auckland’s City Council .. are these not the same people promoting public transport between volcanic cones ?

    They might find a Richter 7 tremor building to another Pompei while at the speedway.

    At that point it might not matter where you are .. but in the short term the residents of Tamaki Makarau have a strong and valid case about the misuse of increasingly scarce public resources.

  8. vto 8

    But wont their cars get crushed?

  9. Jim Nald 9

    The National Government doesn’t back winners, the National Government backs losers?

  10. tracey 10

    LOL vto…

    Any reason why money has to be spent on Puke race track instead of holding it at Hampton Downs? Surely that would be the prudent, cost effective thing to do???

    • ghostwhowalksnz 10.1

      Thats outside of Auckland. And Waikato wont touch it …again

    • Deano 10.2

      they wouldn’t have gotten Auckland Council money for an event held outside its borders… and these things are all about the public largesse – it is the entire profit stream.

      In fact when you remember that the people behind these events are in it to make a profit and the actual event is just means to an end you see that events as just a sideshow to distract from what’s really happening: public money going straight into the pockets of the businessmen.

    • Chris 10.3

      Hampton Downs has a lot of resource consent issues. Think there is a limit on the number of people they can hold.

      It also does not have the same access to Auckland. Finally one of the big things they always trumpet is the benefit for the local economy there wouldn’t be any additional benefit at Hampton Downs as there is nothing there.

  11. Chris 11

    Can’t wait to see trickey do the inaugral lap.

    • mike e 11.1

      He will get a defence force helicopter to take him their!
      Slippery will Spin out on every corner and muddle through.
      TV3 will show it live.

  12. millsy 12

    10 million dollars can buy an awful lot of library books.

    • andy (the other one) 12.1

      Auckland art gallery cost the rate payer 50 million dollars in upgrade costs, musters 100,000 visitors. Auckland rate payers subsidise $500 per visit. That is a lot of rubbish collection and library books…

      Based on shitty facts, but sounds good without basis!

      • prism 12.1.1

        Oh stop your moaning and point making Andy the other one.

        Expressions of a culture of song, dance, memories of the past, of people and things, of grass skirts and spitfires, of a world that narrows down past your birth but continues on in a ribbon of events and artifacts. That’s Pacifica and that’s the museum and the library and other arty things that are symbols for how wonderful people can be, and sometimes how awful we can be.

        V8’s or other machines are great technological shapes and fine engineering, but they are only one dimension of all the other things we cherish, and a bloody expensive portion.

        Don’t start dissing our culture, and our expressions of being creative humans, and say we should think only of rubbish collections and drains.

      • millsy 12.1.2

        So you want to close the libararies down then, Andy?

        You should come down here and stand for the NPDC, you would fit right in with the libarary cutting clowns here.

  13. nellie 13

    The Counties Racing Club/Pukekohe Park Raceway is a privately owned track with net assets of $15m plus. The V8 Supercars Australia are now 60% owned by Archer Capital, a private Australian equity firm making profits for their investors, who value the V8 Supercar business at AU$300 million and bought their 60% share from Tony Cochrane and mates for AU$195 million. Tony Cochrane plus mates own the other 40% of V8 Supercars Australia. The organisers of this event all have loads of money. Why do they need any of ours?

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