Olympic Games Funding
Mr McBRIDE: My question without notice is to the Minister for the Olympics. What is the latest information on the financial arrangements for the preparation of the Sydney Olympic Games?
Mr KNIGHT: I commend the honourable member for his longstanding interest and support for both the Olympic Games and Paralympic Games. There are now only 87 days to go until the opening ceremony of the Sydney 2000 Olympic Games. We are in the final stretch. Indeed, the Olympic torch is already travelling around Australia and is receiving enthusiastic responses from large crowds in every community it passes through. Athletes from 200 countries are completing their final preparations for Sydney, and right around the world there is tremendous interest in and enthusiasm for what will happen in September and October in Sydney. Of course, as any athlete will tell us, races are won and lost in the final straight. All the preparation that goes before is obviously essential, but it can be undone if one cannot give one's all in the final dash to the finish line.
In the past six months, the Government has been looking closely at what resources SOCOG has available for its crucial role in the team delivering the Olympic and the Paralympic Games. The risks and exposures that SOCOG faces have been rigorously examined by Michael Eyers and the finance department of SOCOG, by David Richmond and Bob Adby from the Olympic Co-ordination Authority [OCA], and by SOCOG's finance and contingency committees, which include representatives from the New South Wales Treasury. As SOCOG was aiming for a balanced budget, any risks that materialised would move the SOCOG budget into deficit and automatically call upon underwriting by the State.
From the first days of the bid, the SOCOG budget has been fully underwritten by the State. The then Premier, Nick Greiner, and his Cabinet—many of whom are still with us in other capacities—made that decision, recognising that in a once-only project like the Olympic Games it is extremely difficult to quantify precisely both all income and all expenditure before the event takes place. Of course, the closer we get to the Games, the more accurately costs and revenues can be quantified. For example, only with the experience of the past six months in rebuilding SOCOG's ticket-selling capacity can we quantify more accurately the actual costs of operating a ticket call centre. The combination of our experiences over the past six months and the rigorous work by many people in assessing risks indicates that, without government assistance, SOCOG would be at least $70 million short of the funds necessary to put on Games of the quality that Australians deserve and that the world expects.
I stress that are these are unavoidable facts that in no way involve criticism of the SOCOG board or SOCOG staff. It simply recognises that, if all the identified risks materialised, there would have to be either cuts to the SOCOG expenditure or support from the Government as underwriter. At this stage, cuts to the SOCOG expenditure would compromise the quality of the Games and would undermine all of the good work that has gone before. Consequently, the Government has decided to provide assistance now. While we had all hoped that, ideally, the underwriting would not need to be called upon, it is preferable to do so now in an open and transparent way that preserves the quality of the Games. Consequently, the budget committee of Cabinet today accepted a proposal from the Treasurer and me to make a special grant of $140 million to a special SOCOG contingency fund. This sum covers the explicit risks that have been identified and makes prudent provision for additional risks that may emerge, including any possible shortfall in ticketing revenue.
The Government has naturally attached some strong conditions to this grant. Money from the contingency fund can be spent only on the recommendation of the SOCOG contingency committee, which comprises Brian Sherman as Chair; Michael Eyers, the Deputy Chief Executive Officer of SOCOG; Bob Adby from OCA; and Mark Ronsisvalle from the New South Wales Treasury. Even then it will need the sign-off of both the Treasurer and me as Minister for the Olympics. Any funds that are not allocated according to this procedure will be returned to the Treasury. I have consulted members of SOCOG's finance committee, including Nick Greiner and Brian Sherman, both of whom strongly support this arrangement. It would be remiss of me not to convey to the House the longstanding sentiments of many board members and senior staff who believe there has always been an anomaly in the SOCOG accounts of transfer payments to the Government from SOCOG.
In particular, there has been concern about the $218.7 million that SOCOG has paid to the OCA for the construction of the Sydney international aquatic and athletics centres. That commitment dates from the bid, but is viewed as being inconsistent with the fact that the Government, through the OCA, has taken responsibility for funding all permanent venues. Indeed, several board members to whom I have spoken today expressed the view that the $140 million grant goes a long way towards addressing that anomaly. In conclusion, I make it absolutely clear that both SOCOG and the Government are determined to deliver an outstanding Olympic Games in Sydney this year.