New Zealand Treasury officials have urged the government not to bankroll Team New Zealand in the next America’s Cup campaign, saying it offers ‘poor value for money.’
Following the dramatic 8-9 loss in the 34th Cup in September last year, the government gave $5 million to retain some of the team’s key staff and is considering whether to invest up to $36 million, a report by the New Zealand Herald says.
The report cites government documents released under the Official Information Act, in which Economic Development Minister Steven Joyce and Finance Minister Bill English said Team NZ should secure private backing.
The document said "the extent of any positive economic impacts from a Government contribution to the last challenge have not been established."
"A number of benefits from Government support are often claimed, including increased economic activity, tax revenue, employment and an opportunity to promote New Zealand industry and tourism.
"However it is likely that many of these benefits would be achieved if TNZ were to enter without Government support," it said.
Since the Treasury report was written, an economic impact report estimated $87 million was added as a direct result of the last Americas Cup campaign.
However the Treasury Department recently disputed this.
"We note that economic impact assessment reports tend to overestimate benefits of activities as they often do not distinguish what additional activity is created."
Team NZ chairman Dr Keith Turner said Government support was "absolutely critical" in order to mount a competitive challenge and to boost awareness of ‘brand New Zealand.’
