Why should we care about the stadium when there are more important issues at stake in this election?

Voter surveys reveal that Tasmanians are most concerned about health, housing, and cost of living, with education, transport and infrastructure also of concern to many.

So why should voters care about the Premier’s stadium at Macquarie Point and his promised investment of at least $375M?

The short answer is because it will impact on all those other things we care about.

Even IF the state’s input can be capped at $375M (which we all know is fanciful) it’s not a paltry debt for a small population to service. It will cost us $649 each, or over $2,500 for a typical household of four.

It’s money that has to be found either by shaving it off other budget items – like health, housing, education – or by borrowing it up front and paying off the loan over future budgets.

Our State’s deficit has blown out to $525M, while tax receipts have fallen $100M. We have been in recession for 3 consecutive quarters as our population has started to decline and age.

In economic terms, opportunity costs represent the potential benefits we miss out on when choosing one alternative over another.

We need to ask ourselves what are the opportunity costs of choosing the stadium alternative?

Either government departments and services will have to be cut to pay the $375M up front, or the money has to be borrowed, adding the interest to our half billion-dollar deficit each year.

A loan of $375M @ current RBA rates will cost us over $28M pa for the next 20 years (nearly $200M in total interest over the term of the loan).

If you listen to the radio or follow social media, a common theme when discussing public services is that many departments seem to be running on empty, with existing staff feeling overwhelmed and unsupported. Put simply, we need more state employees – we need to attract more personnel in every field.

So, what does $28M pa buy us in terms of personnel?

Answer: Over 300 workers distributed over the health, welfare, and education sectors – i.e. 80 enrolled nurses + 40 Paramedics + 30 Social workers + 50 Aged-care workers + 50 Child-care/early childhood educators + 40 School/TAFE teachers + 40 Police Officers.

The real question is: Can we afford to lose this number of staff in order to service the stadium debt?

And, remember, this is only focussing a tiny lens on the $375M that the Premier fantasises can be the sole state capital contribution.

It disregards the $240M from the Federal Government for urban renewal of the whole precinct that hasn’t been quarantined from future GST payments and will impact on any government’s capacity to provide essential services and employ sufficient personnel to run the state in the future.

It takes no account of the $500M (engineer’s best estimate) that will be needed to stabilise the site and send concrete piers 12 metres down into the underlying bedrock to support the tons of concrete needed to construct a building of this size.

It also ignores the re-siting of the sewage treatment works (~$160M) from Mac Pt to Self’s Pt, and the road and bridge reconfiguration (~$50M) that will be needed to enable traffic to flow into and around the Mac Point site.

Adding all these together, we’re already looking at stadium cost of over $1.45B and that’s only IF the state’s capital contribution can be limited to $375M, something that’s looking increasingly unlikely.

I’m young and healthy and more concerned about housing and cost of living. What has this stadium to do with those?

The stadium build will likely absorb most of our local construction workforce, as well as needing imports from the north island, particularly in specialist trades. Where will imported workers be housed? How will airlines and Spirit cope with increased demand from FIFO workers?  What will they drive and where will they park?

Our local building industry already finds it difficult to cope with demand – just ask anyone who’s tried to get a renovation or building job done on short order. Most businesses are working on 4 to 6 month timelines to start a project of any size.

The government has also committed to construct social housing. From where will the construction workers come to meet these commitments?

Other government programs like ‘Build to Rent’ would be similarly affected.

Then there’s the maintenance of existing schools and other public facilities. We’ve had almost a decade of ‘outsourcing’ so there are no longer government maintenance crews.  More drain on local trades.

All this extra competition for services, workers, airline seats, car hire and accommodation drives up prices and impacts on the cost of living. Lack of social housing pushes up rents overall.

Any ‘building boom’ will increase the cost of materials and construction, thence property prices.

The fact that the Federal funding of $240M has not been quarantined from future GST allocations means that any future Treasurer will have to either gradually reduce services or pause increases in them so that they fail to keep pace with inflation.

Reductions in government services drive people to the private sector where prices are often higher because private providers need to make a profit. This drives up inflation and impacts further on cost of living.

Any way you look at it, this stadium proposal is uncosted and unfunded and any candidate who tries to tell you otherwise needs to be challenged to prove, with corroborating evidence, either how they can make both the costing and the state’s budget work, or which services are to be reduced. Pie-in-the-sky optimism and wishful thinking won’t cut it in this debate, and will bankrupt the state.