Taxpayer Subsidies for Major Sporting Events

Promoters of major sporting events in Australia have been successful at persuading governments to provide taxpayers’ funds to cover the costs of staging such events. Until recently, the justification for such use of taxpayers’ money has been in terms of the potential of the events to attract visitors and their associated expenditure. However, this has led to bidding wars between state governments in which the nation is the loser due to high payments to overseas event owners. Increasing attention is being focussed on the issue of returns to taxpayers/government for their outlays. This paper concludes that major sporting events do not appear to generate sufficient extra tax revenue to justify the expenditure of taxpayers’ funds. It goes on to suggest that if the tourism industry is the major beneficiary of hosting such events, then more emphasis should be placed upon finding ways in which the costs are borne by the industry.