Editorial: Team NZ grant poor use of precious $36m

Emirates Team New Zealand take their AC45 for its first sail on the Waitamata harbour in March. Photo / Chris Cameron

Much can change over four years. In the case of the America's Cup, virtually everything has.

So much so that the previous government's commitment of $36 million of taxpayer funding to Team New Zealand's challenge for the 2013 regatta now looks a monumental blunder.

Worst of all, those responsible for the agreement did not take the sensible precaution of including a get-out clause that could be triggered by any radical switch in circumstances.

The current Government, therefore, had no option over the funding.

Economic Development Minister David Carter tried to make the best of things by insisting the regatta off San Francisco would showcase New Zealand's technology, products and services and encourage tourism.

But, he, with most New Zealanders, would surely wish that $36 million was available to be spent elsewhere.

There are two reasons for this. First, the country's economic condition has deteriorated markedly since 2007.

Labour government finance minister Michael Cullen warned frequently of a looming "rainy day", yet that prognosis seemed to hold no sway when it came to the long-term funding of Team New Zealand.

Now, the lingering impact of global recession and the aftermath of the Christchurch earthquakes have placed yacht racing in an entirely different light.

Secondly, the America's Cup has lost the mana and magnetism that it once held for New Zealanders. It was possible to make a strong case for the $33 million of taxpayer funding that went into Team New Zealand's campaign off Valencia in 2007.

This was the chance to recapture the Auld Mug from Alinghi after its ignominious departure from these shores in 2003. Duly, Team New Zealand made a spirited bid and some of the aura associated with the event returned.

Subsequently, however, there has been every reason for public support to evaporate. The rivalry between billionaires Ernesto Bertarelli and Larry Ellison led to long-running court wrangling and the farce of a catamaran racing a trimaran.

Finally, it emerged that Oracle wanted the 34th America's Cup to be contested between 22m catamarans. Not only is this a radical shift from the grace and tradition of the America's Cup but it introduces a type of racing with little pedigree in this country.

That means Team New Zealand is playing catch-up as it seeks to become competitive in multihull racing.

The taxpayer funding will help it achieve this, but it is money that should never have been committed. The Government, having been saddled with this payment, should now detail what, if any, future commitments have been made to Team New Zealand.

This - not vague and unsubstantiated statements about valuable publicity that may accrue from the latest $36 million - is imperative in the interests of transparency.

Some people are also uneasy that New Zealand will spend more than $1.2 billion on investments backing the Rugby World Cup, while the event will make only $700 million in direct economic returns.

It was sadly predictable that the staging of such an international tournament would develop along these lines. This has been the experience of most cities that have hosted the Olympic Games and countries that have staged soccer's World Cup.

The rugby cup deficit will be large. While the benefits should not be appraised purely in economic returns, it will take a whole lot of national pride and other intangibles to start to square that ledger.

Rugby's aura and status as our national game remain strong but a debt-ridden state needs to be wary of the vanity of subsidising global professional sport.