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The economics of soccer in Australia

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[Association] Football Federation Australia is the national governing body for soccer in Australia. It is financially weak, but politically strong enough to have secured a loan of $45m (AUD) from the Australian Government to lodge a bid for either the 2018 or 2022 FIFA World Cups. News Limited have a copy of that agreement available online for those who are interested in contracts (click here). This funding comes after the Australian Government bailed out the former governing body of soccer, Soccer Australia, in the mid 2000's and enforced a strategic review and 'rebooting' of the sport.

According to Mark Davis of the Sydney Morning Herald newspaper, the Australian Government Department of Prime Minister & Cabinet has suppressed the release of a $180,000 commissioned report by economic consultants Access Economics, which:

"is believed to argue that claims by proponents that countries which hosted such events [ie the FIFA World Cup] would secure massive economic benefits often did not stand up to scrutiny. ... In the case of the World Cup, it identifies building stadiums, improving public transport and providing security as significant costs mounting into several billions of dollars".

Access Economics is one of the most respected economic consultancies down under, and such findings will not surprise many readers of The Sports Economist. But the fact that news is breaking now, that such an economic impact critique was not conducted until after the Australian Government has decided to support this bid is sad on many levels. Suppression of such documents is a dismal reflection upon democracy in Australia. That the Australian Government is willing to support the financing of a World Cup bid that would cost billions and offer a questionable return at the same time as running the federal budget from a $21.0 billion surplus in 2007-08 to a projected deficit of $53.1 billion (estimated 4.5% of GDP) (click here for official budget financials) is scandalous. A national election is due later this year.

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