The first race of any Olympics is that of politicians rushing out statements boasting how much they will benefit the economy. Alas Brisbane 2032 is no different.
The Queensland government has stated that “KPMG has estimated economic and social benefits at $8.1bn for Queensland and $17.6bn for Australia”.
Scott Morrison quickly used the figure as well, telling 4BC radio that “we’re estimating … almost $18bn of economic and social benefits for the country”.
He dropped the “social” part in his press conference on Thursday, saying “of course it’s going to be a big economic boost to Australia, some $18bn is the estimate over the course of now and to the Games”.
So what are these benefits?
The first thing to know is the KPMG report has calculated them over 20 years – from 2022 to 2042.
The “social benefits” include the main types, the first of which are “resident benefits”.
These are “the intangible benefits to residents of a host city/country associated with legacy, community spirit, prestige and civic pride associated with hosting a Games”.
KPMG calculated this benefit via a “willingness to pay” measure.
Importantly it didn’t survey people in Queensland about their willingness to pay for such things but instead determined it by “borrowing results” from previous studies done for other host cities.
Then there are “health benefits” they estimate will come about due to “increased participation in physical activity across Queensland and the nation” that will lead to “lower risk of chronic disease” and “improved productivity” due to fewer sick days.
Who knew an Olympic Games was the most efficient way to improve public health!
A study after the Sydney Olympics found that only “a moderate increase in adult sport participation occurred”, and that after the Melbourne Commonwealth Games “there was no evidence to support the proposition that the event boosted adult sports participation in Australia or the host state”.
Then finally we have “volunteering benefits”. These are things such as “self-improvement and altruistic value” as well as the hope that there will be “an increased likelihood of future volunteering”.
All up these social benefits were “quantified” to be worth “up to $3.5bn for Queensland and up to $9.11bn for Australia” (over 20 years).
Yes, more than half of the $18bn figure being thrown around is for things like civic pride, better health due to exercise, and self-improvement from volunteering.
It’s like freelancers being told they won’t be paid for their work, but they will benefit from hundreds of dollars’ worth of exposure.
Then we have the “economic benefits” – due to increased tourism and building works etc.
A study in 2011 found the Sydney Olympics “generated a loss in Australian real private and public consumption in present value terms of $2.1bn. This suggests that the Olympics did not bring the economic stimulus that has been claimed.”
Another study found that since 1960 the median overrun of costs for Olympic games is of the order of 120% – ie the costs generally blow to be more than double the initial estimate. Sydney’s costs overran by 90%.
Morrison also talked up the claim that the Games will “create around 120,000 new jobs.”
This figure as well is over 20 years, and sound less impressive when you consider that by 2042 we are likely to have an extra 6 million more people employed than now.
Let’s just hope it is not like the Salt Lake City Olympics which promised 35,000 jobs but delivered “between 4,000 and 7,000” and a report found “the Games had little to no effect on employment after 12 months”.
My personal favourite part in the report was the suggestion that there was an economic benefit due to “retained expenditure” from Australians not spending money overseas to attend the Olympic Games.
By that measure every Olympic Games not held in Australia has been costing our economy.
Look, Olympics Games are fun – attending the Sydney Games were one of my sporting highlights – and the quickest way to start having fun is to laugh whenever you hear a politician attach a dollar amount to how much we are all going to benefit from them.