Australian state is selling off a whole government agency so it can build more stadiums

The premier of the Australian state of New South Wales is selling off an entire governmental department to raise money to upgrade Sydney’s sports stadiums. I am not shitting you:

Hot on the heels of the privatisation of the state’s electricity poles and wires, the Baird government is selling the operations of the Land and Property Information Service – hopefully for a 10-figure sum – to help fund its $1 billion-plus upgrade of Sydney’s sports stadiums.

Premier Mike Baird has already earmarked $600 million from the Restart NSW fund for the ambitious stadiums plan, which includes the new 50,000-seat stadium at Moore Park, rebuilding Parramatta Stadium and upgrading ANZ Stadium at Homebush.

My knowledge of Australian sports venues is extremely limited, but fortunately we have on hand FoS correspondent David Dyte, who’s a Melbourne native and knows all these stadiums well. I asked him for a rundown, and he replied:

Parramatta Stadium serves the far west of the city, and is home to its own rugby league team. It’s pretty old and I guess could use work. ANZ (aka Stadium Australia) is the 2000 Olympic stadium and is reconfigurable – it hosts Australian football (Sydney, Western Sydney) as well as state level rugby league, and national soccer and rugby. It’s in good shape and does well. Moore Park is central and already has the Sydney Cricket Ground – Australia’s only MLB park – and the Sydney Football Stadium (for all the rectangular field sports I already listed, and home to Easts in rugby league, and Sydney FC in soccer) right next door. Why you need another stadium there, unless it’s a rebuild of the football one, is beyond me. [EDIT: It’s indeed a rebuild of the football one.] It’s already redundant with ANZ, really.

As to the arena, the SEC was fine and didn’t need replacing.

So, um… wtf.

WTF indeed. This would be a pretty remarkable stadium spending spree even without selling the state’s property-licensing arm — which normally brings in a hefty chunk of change to the government each year — to a private company and using the proceeds to pay for it, but … they’re selling off part of the government to pay for new sports stadiums. I mean, guh.

I think that’s all I can handle for today. See you on Monday, unless Stan Kroenke takes Roger Goodell hostage or something.


8 comments on “Australian state is selling off a whole government agency so it can build more stadiums

  1. WOW ! They must be getting advice from El Paso Mayor. Funny how the city with the only MLB park is where this is occurring. Perhaps MLB has started exporting their business model.

  2. Just read a little of Premier Mike Baird’s bio on Wikipedia. Seems, like many of our “conservatives”, he is big on social and religious conservatism, but liberal when to comes to spending tax dollars. He also spent some time living in the U.S. where he might have picked up some of our bad habits.

  3. Putting the use of the proceeds from this sale aside, the privatization of the Land and Property Office isn’t the craziest of ideas. The office is apparently “Your One Stop for Land Title Registration, Property Information, Valuation, Survey and Mapping.” http://www.lpi.nsw.gov.au/. We (at least in my locale) seem to do ok with most of those functions being supplied by the private sector.

  4. I think the point would be that anytime an agency sells a cashstream-producing asset for a one-time payment: 1) the taxpayer would normally want the cash payment invested in something more useful than a stadium and 2) public finances are going to have to adjust to the loss of the cashstream in their projections. Deals of this type frequently forget to do both.

    This is beyond the theoretical question of public-private provision of services.

  5. This isn’t such a crazy idea though I can understand it does look questionable. I suppose you have to live here to understand the impact of this. I can see plenty of value.
    As someone who lives in Sydney, this is my take.

    The investment in the state of NSW is following almost 20 years of non-investment by previous governments (not counting Sydney Olympics related spending). Critical transport projects were left untouched or only partially completed by previous governments, as were other infrastructure projects critical to the economy, so much so that the economy of the state of NSW grew much slower than the other states over this period.

    Stadium spending is not directly related to the strength of the economy, till you remember that attendance to sporting matches pumps a lot of money into the economy, and attracting international matches or competitions can pump 100s of millions more.
    The stadiums mentioned all serve different purposes in Australia’s largest city, in a sports mad nation.

    What is not often mentioned with the recent reporting of this is the state government is also proposing cutting funding to all other sports grounds/stadiums across the city. It is consolidating its sporting infrastructure in an effort to reduce spending on 10+ stadiums. Instead, it will focus its efforts on key stadiums.

    Parramatta Stadium hosts both Rugby League and Football (Soccer), with the newest team (its home team) to the football franchise achieving almost sell out crowds at the 20,000 stadium. Understandably, an increased capacity will only help support this. This team, and the 20,000 spectators are pumping a lot of money into the local economy, with restaurants and bars full on game day (as seen first hand). The city around it is one of the fastest growing in Australia and will benefit from a larger stadium.

    ANZ (the Olympic Stadium) is Sydney’s international stadium and hosts all codes of football as well as Cricket and concerts. They are proposing a roof to ensure the stadium is an all weather facility. They are also proposing configuration. With over 1.3 million spectators per year it is a significant piece of infrastructure.

    The Moore Park stadium is a rebuild to cater to the eastern half of the city.

    The Sydney Entertainment Centre (SEC) referenced above was not ‘fine’.
    The state government has decided to invest in Business Tourism and in the conference and meetings sector in Sydney to improve existing facilities as Sydney was losing business to interstate and Asia Pacific cities.
    Business Tourism is one of the biggest generators of income for any city and the SEC was replaced with a state of the art, multi purpose and flexible theatre that can cater to conferences, meetings, seminars, concerts as well as some sports. The SEC was not this venue.

    The new theatre is part of the Convention Centre, and the land the SEC stood will be residential, commercial and retail space as well as student housing for the nearby universities.

    Building a new undercover sporting arena in Moore Park to attract even more sporting tournaments is hugely beneficial. The SEC could not compete.

    In terms of public spending, this is the first time in years that I have seen this level of investment in the state. Money is not just going to stadiums (this is probably the area with the least commitment).
    Money has gone into transport projects, public hospitals, schools (a lot of new schools in my area), tourism spending, service upgrades and public space and parks.

    Conservative, yes, but this is the most action this state has seen in a long time. Time will be the judge.

  6. I was with you until I got to “attendance to sporting matches pumps a lot of money into the economy,” which, um, no. Innumerable economic studies have now found that spending at sporting matches largely substitutes for non-sports entertainment spending, unless you’re drawing in tons of new spectators from outside the city. And even then, at best you’re just robbing from Melbourne to pay Sydney.

    And if the state is cutting expenses by reducing spending on other stadiums, why does it need to sell off the LPIS to raise money for these new stadiums? Or if there’s demand for a larger stadiums at Parramatta, why can’t the expansion be paid off out of proceeds from increased ticket sales?

    There’s nothing wrong with public spending — but the public should be getting something worthwhile for its investment. “Look, it’s a new stadium, in the same place as the old one but shinier!” doesn’t sound like the highest priority for spending $1 billion.

  7. I agree, in some respects; The Grand Prix in Melbourne is a perfect example of this. Taken from Adelaide, where it was doing reasonably well, from what I can remember, the event has become so costly it is now being heavily subsidised by their state government ($70 million a year?). Melbourne robbing Adelaide only to start robbing itself!

    I don’t agree with the privatisation of all these government agencies, but I can see the current stadia strategy as having more long term benefits to the state than what is occurring now (as a strategy and not looking at the source of funds). Funding given to only 4 stadiums as opposed to 12? Makes much more sense. More home teams per stadium means more ticket sales per venue means more sustainable facilities. That’s the hope anyway.

    Funding for these projects has been transferred from the smaller stadiums (but obviously not enough to cover all costs), but privatisation of services has also lead to spending on the $1 billion upgrade of a local hospital, and the $450 million on new schools and $2 billion+ on transport projects all happening at the same time. I think, if seen in this light, then it makes the project more palatable. Maybe.

  8. Selling the whole government agencies by the Australian State is the craziest one ever. But if the government really losing then better to have it privitized to improve Australian sports venues and government agencies too.