Brad Olsen: Infometrics Chief Economist on Team NZ revealing the America's Cup will not return to Auckland in 2027

The Government's move to reject an Auckland America's Cup bid has been met with divided responses.

The play for 2027 series can't go ahead without an extra $75 million dollars - and the Government didn't feel like it could be justified.

Infometrics Chief Economist Brad Olsen weighs in.

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Episode Transcript

Speaker 1 (00:00):
Hospitality in z and Chris Hipkins of the Labour Party
seem to be the only people in the country tonight
who have said that the America's Cup it's a bad
thing that we're not funding this to the tune of
seventy five million dollars hospitalities. Steve Armatage spoke to me earlier.

Speaker 2 (00:14):
I don't think it's reasonable to say that this is
money that just goes into a black hole. Actually the
event can help to bolster government coffers through GST revenue
from the teams being here and established over a period
of time, investment and technology, both building componentry, even before
you get to the visitation. So in my view, this
is one of those instances where you're actually making an

(00:34):
investment to unlock the greater return over time.

Speaker 1 (00:36):
If you believe it. Barcelona earned two billion dollars. Apparently
that was the net benefit to Barcelona. But then why
aren't there other countries lining up, other port cities lining
up to take the America's Cup. Brad Olsen is the
Informtric chief economist. He's with us tonight. Hey Brad, good evening,
what's your take.

Speaker 3 (00:54):
I completely back the government's decision not to commit seventy
five million dollars to this. I understand that some people,
you know, think that it will bring in an economic
benefit in similar but let's be real. When the fiscals
are in the position they are, when New Zealand is
running deficits out until potentially twenty thirty, all those small
bits matter, and I think you know, we would have

(01:15):
had to be quite upfront that government spending on something
like this would be reckless. I mean, you look at
the last time New Zealand hosted the America's Cup. The
analysis then showed that we made one hundred and fifty
six million dollar loss. Why would we do that again
knowing that we made a.

Speaker 1 (01:29):
Loss last time? But that was they argue COVID, so
no one could come.

Speaker 3 (01:35):
I'm sure. But at the same time, I mean, if
the one bit of analysis that you have that shows
that it's a challenging time that you can't get it through,
that's one part. You couple that with the fact that
again we just don't have extra money to be spending
on what is a private event. By all means, try
and bring it to New Zealand. But if people think
it's that good of an investment, it's going to bring
that much money. They should stump up their own cash.
The private sector should be putting it forward themselves, but

(01:58):
the government cannot should not be funding everything. We just
don't have the resource.

Speaker 1 (02:02):
Yeah, and there are benefits, I mean I was saying earlier,
look at the surgeries they've been able to fund with
the potentially saved money from the America's Cup. There are benefits.
Presumably cost benefit analyses analyzes. You could show up the
wazoo that would show that's actually good for the economy too.

Speaker 3 (02:20):
Indeed, and this is all what comes down to what
economists refer to as an opportunity cost Like it's not
like that seventy five million dollars is not going to
be spent at all, It's going to be spent on
something different. And so part of that is weighing up
where do you get most bang for buck? And I
think that rightfully the government has gone through their finances,
gone through all of the different asks because everyone's always
going to the beehive and asking for more money, and said,

(02:41):
look at the moment, we've got to prioritize and a
yacht race is not currently near the top of the
request list.

Speaker 1 (02:48):
Brad Olson Informetric Chief Economists. Great to have your views.

Speaker 2 (02:51):
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