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Team New Zealand is bracing for a public backlash after confirming its entry for the 2013 America's Cup, with $36 million of government support.
The government is contractually obliged to invest the sum into Team New Zealand for the 2013 America's Cup challenge in San Francisco.
The Labour government signed an agreement with Team New Zealand as part of the team's 2007 campaign against Alinghi in Valencia.
Emirates Team New Zealand chief executive Grant Dalton said today they will have their detractors for accepting such an investment, but he insists it's worthwhile for the government.
Dalton says they are the All Blacks of world yachting and when they perform well the industry performs well. And he said the funding will also help return the America's Cup to New Zealand.
"The government's contribution allows us to be competitive on the world stage.
"We are very much the arrowhead of a major New Zealand export industry and we take pride in showcasing the New Zealand brand, skills and expertise across the major yachting regattas of the world," he said today.
The original deal was brokered by Labour which backs its continuity.
"It's a question of whether you want a couple of hundred jobs and a profit out of it. As a government we can spend on other things or if we cut it out and lose money because we won't get the GST, we won't have the people employed and we won't get the PAYE. I think it's actually a no brainer for anyone who thinks about it," said Labour MP Trevor Mallard today.
Acting economic development minister David Carter said the government would be using the 2013 America's Cup to their full advantage by showcasing "New Zealand's technology, products and services, and encouraging tourism".
"The funding has the potential to generate significant economic benefits for New Zealand, in particular for our world-class marine industry," Carter said.
He said the government expected "maximum benefit" from the "significant investment" of taxpayer money in the event.
Under the original agreement Team New Zealand received $34 million in funding.
In return, their base was used as a platform to promote New Zealand trade and tourism interests in Spain which was, at the time, the world's eighth largest economy.
However the Green Party is questioning the spending and wants the deal scrutinised. Co-leader Metiria Turei says the party doesn't support the funding and says it should be reassessed in light of current economic circumstances.
She says it's surely a nice-to-have and isn't essential spending.
Turei said the contract committing the government to the spending needs to be released for public scrutiny.
"In these circumstances it seems incredible that a government planning cutbacks is willing to fork out $36 million for a boat race off San Francisco.
"The public also needs to know what they will be getting for their $36 million investment," she told ONE News today.
Industry backing
The boating industry is backing the move and says the 2013 challenge will create jobs and money for the country.
The marine industry is the largest manufacturing industry in New Zealand and employs 10,000 people with 600 boat building apprentices and a turnover of $1.7 billion a year.
"We need promotion and what the Emirates Team New Zealand deal does for us, is it arrowheads up that promotion to get that 70% of worth and expansion over the next five years," says Peter Busfield, Executive Director NZ Marine Industry Association.
Meanwhile, Team New Zealand has also announced Swiss-based coffee brand, Nespresso will be joining its team of sponsors.
Team New Zealand has also agreed that should they be successful in their challenge then the Cup would return to New Zealand.
What do you think of the government's decision? Leave
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Add a Comment:
Post new commentIKIWI said on 2011-04-25 @ 19:37 NZDT: Report abusive post
Thank you to the Government for not dropping the ball on this one. Over the years New Zealand has invested and received tremendous value for its support for the Americas Cup.
sting160675 said on 2011-04-23 @ 01:38 NZDT: Report abusive post
Well wasn't it the Labour who signed the contract not the present government!
nztifosi said on 2011-04-22 @ 14:45 NZDT: Report abusive post
It would be interestig to know if, under the National State of Emergency for the Christchurch earthquake, whether the government could us the cost of the recovery bill as a reason to void the contract for the America's Cup money . . . if they wanted to . . .
greenersideoftheditch said on 2011-04-22 @ 02:20 NZDT: Report abusive post
Let me see.. As Mr Mallard puts it - $36 Million gets a few jobs, some GST and some PAYE, So they give away $36 mil and get back probably a few hundred thousand - a sound business proposition if you can print the money faster than you can give it away.. Rich man's sport - let 'em pay! Most of the money doesn't filter down to the average guy - the last few we hosted proved that!
RVDT said on 2011-04-21 @ 20:57 NZDT: Report abusive post
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