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Not at our expense

Why should tax payers have subsidised the Soccer World Cup in Brazil?

19 July 2014

9:00 AM

19 July 2014

9:00 AM

That a single cent of public money was spent on the Fifa World Cup is a disgrace. The fact that the Brazilian government has contrived to spend between 15 and 20 billion US dollars on the recent jamboree of football is unfathomable. Let’s make one thing clear: if sport has long been seen by many as a cash cow, the World Cup is a bovine money-printing machine of truly gargantuan proportions. Between administrators, television stations, sponsors, sports apparel conglomerates, producers of food, soft drinks, not to mention beer and yes, even players, agents and coaches, there are a multitude of snouts in the trough. And there’s room for them all.

According to Forbes, Brazil 2014 is estimated to generate US$4 billion in revenue for Fifa. It’s not hard to see why. About 3.2 billion people (46 per cent of the world’s population) watched at least one minute of the last World Cup in South Africa in 2010. In fact, an average of 188.4 million watched each match. It’s not that Fifa needs public money to hold the World Cup, it’s just that the tournament would be a little bit more work and a little less profitable without it. That is not the people of Brazil’s problem.

That the World Cup is such a massively profitable, massively popular event is reason enough for it to be considered beyond the realms of public funding. But the poverty endemic in Brazil is a further reason the World Cup should never have received so many tax dollars. Eighteen per cent of Brazilians live in poverty. Indeed, minutes from the Arena Corinthians in São Paulo — a stadium which cost US$450 million — thousands live in tents and under plastic tarps. The stadium hosted just six World Cup games. And the cost of the Mané Garrincha stadium in Brasilia blew out to US$900 million, triple the original cost estimate, as a result of fraud. Outrage over the ties between politicians and contractors triggered protests last year.

The money spent by the government on the World Cup could be spent on education or health. Or, even better, left in the hands of the Brazilian people so that entrepreneurs of all shapes and sizes can create jobs and wealth in what is now a sluggish economy after almost a decade of strong growth. But even if Brazil was the richest country in the world, there is a broader philosophical issue with governments funding elite sport. Elite sport is a fine thing, but it’s not a universally adored pastime. Though on the surface they may appear to be few and far between, there are many Brazilians who don’t care about football (one in four believe the World Cup will harm Brazil’s image). How is it fair that their income has been used, against their will, to finance a luxury they have no interest in?

Unfortunately, this is a situation that is unlikely to change soon. Governments are lining up to host and fund the World Cup — including Australia. The bidding process is notoriously corrupt with various Fifa officials removed over the years for accepting extravagant ‘gifts’.

Some, including the government of Brazil, will argue that the economic benefits of the World Cup taking place outweigh the cost. And it’s true that the almost a million fans who partied their way across Brazil will have been a tremendous economic boon for some. But the economic benefits of big events like the World Cup and the Olympics are generally exaggerated. For example, Time estimates that Brazil will end up with only about US$500 million in tourist spending — a paltry sum compared to the outlay stated above.

The real reason why governments are willing to fork out such grotesque amounts of their people’s hard-earned for a football tournament is that politicians have long since recognised the benefits of being associated with their nation’s sporting heroes. It is no coincidence that Brazil’s President Dilma Rousseff chose to formally launch her re-election bid during the tournament.

All of this is not to say that the World Cup is a bad thing. Far from it, the World Cup is a wonderful sporting event that captures the imagination of the entire globe. But it is morally untenable that some of the poorest amongst us (or anyone for that matter) end up footing the bill against their will.

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Peter Gregory is a research fellow at the Institute of Public Affairs and recently returned to Australia after attending the World Cup in Brazil.

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