Between the lines: Olympic blowout as debts pile up

The financing of the Olympics that was not going to "cost taxpayers a cent" is looking a little fragile right now after the New South Wales Parliament, with a gun to its head, approved in late June a $A140 million top-up to the Games budget.

Only $A51 million of the top-up is accounted for - the rest will be for "contingencies," according to the Sydney Organising Committee (Socog).

This is all too vague for the NSW Auditor-General, Bob Sendt, especially after the state Treasurer, Michael Egan, had said in May that "every single cent" of Olympic costs was accounted for.

According to the Auditor-General, the Olympic organisers did not provide enough information to justify the $A140 million lifeline.

"There's only 80-something days before the Olympics. I have concerns about how this has occurred," said Mr Sendt late last month.

Now there are just 73 days left and the need for the lifeline is not the first mistake that Socog has made in its numbers lately.

In May, NSW Budget papers revealed that the estimated burden on the public purse of running the Olympics and associated Paralympics had jumped by $A97 million to $A1.37 billion.

True, the money is coming from revenues and not from debt because the NSW economy is fizzing.

But that is still $A97 million that could have been spent on something else.

Other organisations have had to help out. The NSW government has already forgone its token $30 million surplus from the Games.

The Australian Olympic Committee, which partly finances itself from the Games, will now only charge $A89 million instead of the agreed earlier figure of $A100 million.

And the IOC will give back $A11 million.

Socog still needs to sell a lot of tickets to achieve the break-even that Olympics Minister Michael Knight told the Herald is his goal.

As of early July, there were still some 2.6 million tickets looking for buyers.

Most of these are for minor events or for heats of major ones, but they also include 75,000 plum seats for the opening and closing ceremonies, track and field finals days and other drawcard events, which Socog wants to sell at premium prices.

Although Mr Knight says he is looking for long-term returns from the Games rather than for profits in the Olympic financial year, he still needs the punters.

The Australian tourism industry expects some $A1.5 billion in extra receipts from the Games.

However, the minister may also be banking on intangible benefits from the Olympics. According to a research document by Salomon Smith Barney/Citibank, the currency of the host nation just about always appreciates in the Olympic year, mainly because it is in the spotlight.

If so, the Australian dollar might even drag the kiwi up with it.

The Olympics – a Herald series

Official Sydney 2000 web site