MELBOURNE // Australia's state of Victoria will bid to keep the loss-making F1 Grand Prix in Melbourne before the contract expires in 2015, but will not be "bunnies" again in negotiations with commercial supremo Bernie Ecclestone, a senior government official said.
Victoria is contracted to hold the Grand Prix at Melbourne's Albert Park street circuit until 2015, but mounting losses borne by taxpayers have sparked growing calls from residents to ditch the race.
Louise Asher, Victoria's tourism and major events minister, played down any suggestion the government's commitment was waning, and said officials would seek better terms with F1 management when entering negotiations in 2013 or 2014.
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"We would like to [extend the contract], but we will sit down and we will negotiate about it," Asher told Reuters in a telephone interview on Thursday. "There's no doubt about it that the Victorian government would want to secure the Grand Prix."
"It's just that we're not going to be bunnies in contractual negotiations.
The race's losses ballooned to over A$49 million (Dh176.3m) last year, following three years of A$40m-plus losses, placing organisers under the spotlight ahead of the season-opener at Albert Park on March 27.
Lawmaker Michael Danby, whose electorate includes the Albert Park circuit, told parliament last month residents were overwhelmingly against the race continuing and said Melbourne should cut losses and walk away.
Melbourne's Lord Mayor Robert Doyle also questioned the worth and viability of the race, saying the city should look for a more cost-effective major event to replace it.
Asher, whose Liberal Party was returned to power in Victoria in November after 11 years of Labor governments, pinned much of the blame for the cost blowout on the previous administration and said the race's organisers had been put on notice to reduce costs.
"We've inherited a contract that Labor has signed up to, and I just have to deal with it," said Asher, who helped bring the race to Melbourne as the state's major events minister in 1996.
"So my opinion of what might be an acceptable loss is irrelevant because the event is contracted until 2015, so what we're trying to do is manage what we've inherited."
"When I used to run the event when I was minister previously ... these taxpayer subsidies were A$2-3 million, however, that was operating off a different contract.
"There are many reasons why the event lost so much last year. One is the contract ... Another reason was that attendances were down. Another reason was that revenues and sponsorships and elements like that were also down.
"The [Australian Grand Prix] Corporation will be required to demonstrate to government that it's doing everything to rein in costs."
Debate over the race's worth has raged since the previous government commissioned the auditor-general, a government watchdog, to investigate the economic impact of the 2005 edition.
The audit, released in 2007, said losses had outstripped measurable economic gain by several million dollars.
The previous government's major events minister told parliament the economic value of last year's race was "in the order of $A62 million."
Asher cited a separate report by a private consultancy commissioned saying the race was worth A$175 million to the state when incorporating wider benefits to the tourism industry.
"Everyone's entitled to their opinion and they can say whatever they like, but there's a significant economic benefit to hosting the event," she said.
"Victorian tourism's had to really fight for everything we've achieved. Sydney's got the harbour and Brisbane's got the Great Barrier Reef, and we've had to brand ourselves by events or being a city of things to do.
"Now we've got sporting events, cultural events and theatre events which are taxpayer-sponsored as well, so we've really had to work hard at brand Melbourne up.
"And particularly for internationals to know Melbourne exists and want to come to Melbourne and also for the interstate people to actually view Melbourne as exciting again."