19/09/2012 - 10:58

McGowan plays on with stadium

19/09/2012 - 10:58

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Mark McGowan is no doubt aiming to tap into this uncertainty and gain support from the football community across the board.

McGowan plays on with stadium

Mark McGowan is no doubt aiming to tap into this uncertainty and gain support from the football community across the board.

Opposition leader Mark McGowan has opened up a can of worms with his pledge to build Western Australia’s new football stadium at Subiaco if Labor wins the state election in March.

It had appeared the stadium location was a done deal after Premier Colin Barnett’s almost ad hoc decision to have it built on the Burswood Peninsula, adjacent to the recently rebadged Crown Perth Casino.

Mr McGowan had previously been cautious in his comments on the stadium’s location, saying he expected contracts to build the arena, tipped to cost about $700 million, plus a further $300 million for public transport modifications, would have been let by election time.

But when the premier revealed earlier this month that was unlikely, the location ball was clearly back in the opposition leader’s court. And he gave it an almighty thump. 

He did add a rider. If James Packer’s Crown group, which will be a major beneficiary of the Burswood location, is prepared to kick in $500 million towards the cost of the project, Labor would drop its opposition.

That would require a major about-face by Mr Packer, who said last year after Burswood was selected that he did not intend to contribute towards the project.

There are two issues still at play in the stadium location saga. The first relates to the engineering challenges linked with the Burswood site, which is a converted rubbish tip on low-lying land adjacent to the Swan River. 

The sceptics say the location lacks the firm base, which is essential not only for a major structure but also for the surface of what is destined to become the state’s premier sporting arena.  

Supporters dismiss those concerns on the grounds that the casino, hotel, convention centre and several tall blocks of units have been built there already. Why should a sporting stadium be anything different?

The second issue is linked with control of the new venue. Will it be the WA Football Commission, which has a long-term lease on the Subiaco site, or – as has been mooted – a government-appointed body?

This issue is the sleeper. Subiaco Oval, now known as Paterson’s Stadium, is a great money spinner for the commission. 

Most AFL games during the winter are virtually a full house. When combined with other major events at the venue, the result is a significant cash flow, which the commission uses to assist in funding the WAFL and the development of the game generally.

The John Langoulant taskforce, which investigated alternative sites, reported before the last election that control should be wrested from the commission. 

Taxpayers would fund the lion’s share of any new venue, so taxpayers – through the government – should have a controlling say in its management.

Football officials were certainly unhappy at the prospect of losing their control, and assured income flow, under that plan. 

And they will remain uneasy until the government’s proposal for the new set up is signed, sealed and delivered.

Mr McGowan is no doubt aiming to tap into this uncertainty and gain support from the football community across the board – WAFL, country associations and junior clubs – until the matter is resolved.

Labor has been criticised for reopening an issue, which has been around so long that debate fatigue has started to develop. Many people just want the 60,000-seat stadium built and ready for use by 2018, as Mr Barnett has promised. 

But unanswered questions remain about the government’s plan, including – significantly – the budget for the project. And until the final specifications are decided, the nominated $1 billion price tag looks very rubbery indeed.

While the uncertainty remains, Mr McGowan’s move guarantees the project will remain an expensive political football.

Lesson for Swan?

Hopefully, the significance of the slump in iron ore prices, which has placed a question mark over the future viability of Andrew Forrest’s Fortescue Metals Group in the Pilbara, is not lost on the pugnacious federal treasurer, Wayne Swan. 

Remember, Mr Forrest was one of three major investors – the others were the world’s richest woman Gina Rinehart and Queensland’s Clive Palmer – who were singled out for special criticism by Mr Swan earlier this year?

The one factor they had in common, besides personal wealth and a commitment to developing new mines, was they strongly campaigned against the government’s mining tax. 

Mr Swan and his cheer squad honed in on the wealth of Mr Forrest and his friends. The point made by the miners seemed to be lost in the static which the debate generated. 

Among other things, they pointed out that unexpected new taxes send the wrong message to investors. It is akin to changing the rules after the game has started.

When the iron ore price plunged, Mr Forrest started sacking workers at his WA operations and some long-term, trusted administrative staff as well. If that did not signal the fragile state of FMG’s operations, the trading halt of the company’s shares last week should have done the job.

Mr Swan might like mining to be conducted by the three giants – BHP Billiton, Rio Tinto and Xstrata. But history shows that, when prices are high, new operators seek to enter the market. That is where Mr Forrest comes into the picture.

And he has done remarkably well with his FMG operation. Over the past few years, strong prices for iron ore generated the revenue to help service a high level of debt, which he took on to get his operation off the ground. But with prices off 50 per cent in 12 months, it’s a new ball game.

It’s reasonable to assume that a previous Labor treasurer, Paul Keating, would have appreciated the fine line some operators walk to stay in the game, acknowledging their contribution to both wealth and job creation, export income and, of course, profit.

Survival can be a touch and go experience for new operators while they attempt to establish themselves. 

Not to mention the thousands of people on their payrolls and contractors who rely on the operations for putting bread on the table.

Mr Swan has had a cloistered career to date: university, political staffer, state party secretary and then federal MP. But, hopefully, the realities faced by the risk takers who add diversity to the economy are starting to sink in. That is unless they are shonky, as some were in the 1980s.

He does not have to be best mates with Mr Forrest. But a bit of constructive engagement would be a nice change, if only because it would be in the national, rather than sectional, interest. Surely that’s not too much to expect.


STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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