Australia F1 race a big loser

Victoria's new Auditor-General is heading for a showdown with the State Government over a report that is set to blast the state's much-vaunted major events strategy.

A report by auditor Des Pearson, due within weeks, is believed to deliver a stinging assessment of the Australian Grand Prix, warning of rising public costs while questioning claimed economic benefits.

The report is also critical of the Australian International Airshow, saying the first two days are a taxpayer-subsidized trade show and should not be included when assessing benefits.

The Government says the air show will result in economic benefits worth $100 million, while it says the Grand Prix will boost the state economy by $175 million.

But a source close to the Government estimated costs associated with the Grand Prix would rise by $3 million to $4 million a year under the terms of a new licensing agreement that lasts until 2010.

The source said the cost of the 2007 event was "roughly $28 million" and could blow out to as much as $42 million by 2010. The Age

[Editor's Note: $28M to $42M cost for a $175M return – seems like money well spent to us.]

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