Ahhh – the halcyon days of the past. A time when governments had chests full of money and they handed it out to anyone that put a cogent argument to them and bought them dinner. Many people would have me believe that to receive a government grant, you simply knock on the door of a relevant minister and the door is answered by a person wielding a two-metre-wide cheque and a texta that can add as many zeroes as you want.
If ever I had any distorted visions that a few door knocks would reveal millions of dollars of grants, a recent visit by a representative of Infrastructure Australia (IA) would certainly have brought me thudding back down to earth.
Long gone are the days when governments handed out money because it “seemed like a good idea”. Any proposal put forward to governments in our current environment need to pass new tests of rigour and satisfy a range of criteria based on a strict business case. Governments that once were averse to contemplating partnerships with private businesses or joint ventures with the private sector are now actively encouraging the participation of the private sector.
As we took the IA rep to various parts of Dubbo to look at funding opportunities, the first question asked time and time again was “how much does this asset return to Council?” Then discussions would follow on how superannuation funds or merchant banks might be utilised to fund future development of this asset instead of utilising a government grant.
We are currently in the middle of finalising a funding grant for Barden Park – which would be a wonderful asset for the region. With a total project cost of over $5 million, one of the documents that we had to produce to accompany the application was a comprehensive cost-benefit analysis. The numbers stacked up fantastically, with an estimation of $1.3 million and 14 full-time jobs contributed to the Dubbo LGA on an annual basis. If the numbers were anything less than impressive, I doubt our application would have made it past the first round.
All this emphasis on financial return from the people that hold the purse strings seems like an excellent idea at face value. Everyone has an anecdotal story of ‘pork-barrelling’, where money was spent on a project in a particular electorate and blind Freddy knew that it wasn’t going to work. Bringing some financial rigour to the process is not only sensible but ultimately essential to ensure our lucky country remains lucky.
The only downside to a purely financial view of the government grant process is that there are some projects that only a government will undertake because the outcomes are not financial but instead social. It would be hard for a public company – with shareholders demanding increased return on their investment – to undertake projects that are never going to return a profit to the individual company. On the other hand, governments can undertake projects that have a primary goal that is not financial; for example there may be social, cultural, environmental, historical or other benefits. As an example, look at one of Dubbo’s glorious assets – the Dubbo Regional Theatre and Convention Centre (DRTCC). From a purely financial aspect, the new tiered theatre was always going to struggle to show a positive financial return after the operating costs and loan repayments. It would be difficult to convince an investor that they should spend $18 million on such a facility. However, from a Dubbo perspective the theatre is performing wonderfully and has contributed to the cultural and economic development of the City. More than 50,000 tickets were sold in its first 18 months of operation, and 27 per cent of those were purchased by people outside of Dubbo. About 123,000 visitors and participants walked through the doors in that same time frame. It has brought a significant number of visitors to Dubbo to spend money in our local economy and it has improved the cultural experience for all of our residents. Who knows, there may be another Hugh Jackman or Nicole Kidman in our midst and they are now inspired to tread the boards with this world-class facility in our City. It is hard to put a value on these benefits for our residents.
My belief is that there has to be a happy medium. One day this country is going to run out of resources, and when that day comes I hope we have made good use of the money we were lucky enough to generate from digging up resources. We have to ensure that governments are held accountable for the money that is put into projects and not waste that money, but at the same time we need to ensure that our nation looks at the bigger picture and creates a country that we will be proud to hand on to our future generations. Some may say that we need to ensure we look at our country with a helicopter view.
Tell me if you think grants are now easier or harder to obtain at mayor@dubbo.nsw.gov.au
Clr Mathew Dickerson
Mayor of the City of Dubbo