Latest / Best of Business / Brad Olsen: Infometrics Chief Economist on Team NZ revealing the America's Cup will not return to Auckland in 2027

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Brad Olsen: Infometrics Chief Economist on Team NZ revealing the America's Cup will not return to Auckland in 2027 · Best of Business

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  Speaker 1: You're listening to a podcast from news Talk zed B.
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  Speaker 1: Follow this and our wide range of podcasts now on iHeartRadio.
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  Speaker 2: Hospitality in z and Chris Hipkins of the Labour Party
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  Speaker 2: seem to be the only people in the country tonight
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  Speaker 2: who have said that the America's Cup it's a bad
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  Speaker 2: thing that we're not funding this to the tune of
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  Speaker 2: seventy five million dollars hospitalities. Steve Armitage spoke to me earlier.
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  Speaker 3: I don't think it's reasonable to say that this is
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  Speaker 3: money that just goes into a black hole. Actually, the
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  Speaker 3: event can help to bolster government coffers through GST revenue
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  Speaker 3: from the teams being here and established over a period
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  Speaker 3: of time, investment and technology both building component tree even
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  Speaker 3: before you get to the visitation. So in my view,
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  Speaker 3: this is one of those instances where you're actually making
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  Speaker 3: an investment to unlock the greater return over time.
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  Speaker 2: If you believe it. Barcelona earned two billion dollars. Apparently
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  Speaker 2: that was the net benefit to Barcelona, But then why
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  Speaker 2: aren't there other countries lining up, other port cities lining
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  Speaker 2: up to take the America's Cup. Brad Olsen is the
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  Speaker 2: infor Metric chief economist. He is with us tonight. Hey,
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  Speaker 2: Brad good Eve, what's your take.
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  Speaker 4: I completely back the government's decision not to commit seventy
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  Speaker 4: five million dollars to this. I understand that some people,
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  Speaker 4: you know, think that it will bring in an economic
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  Speaker 4: benefit and similar, but let's be real, when the fiscals
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  Speaker 4: are in the position they are, when New Zealand is
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  Speaker 4: running deficits out until potentially twenty thirty, all those small
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  Speaker 4: bits matter, and I think, you know, we would have
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  Speaker 4: had to be quite upfront that government spending on something
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  Speaker 4: like this would be reckless. I mean, you look at
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  Speaker 4: the last time New Zealand hosted the America's Cup. The
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  Speaker 4: analysis then showed that we made one hundred and fifty
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  Speaker 4: six million dollar loss. Why would we do that again
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  Speaker 4: knowing that we made a loss last time?
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  Speaker 2: But that was they argue COVID, so no one could come.
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  Speaker 4: Oh, I'm sure. But at the same time, I mean,
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  Speaker 4: if the one bit of analysis that you have that
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  Speaker 4: shows that it's a challenging time that you can't get
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  Speaker 4: it through, that's one part. You couple that with the
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  Speaker 4: fact that again we just don't have extra money to
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  Speaker 4: be spending on what is a private event. By all
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  Speaker 4: means try and bring it to New Zealand. But if
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  Speaker 4: people think it's that good of an investment, it's going
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  Speaker 4: to bring that much money, they should stump up their
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  Speaker 4: own cash. The private sector should be putting it forward themselves,
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  Speaker 4: but the government cannot should not be funding everything. We
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  Speaker 4: just don't have the resource.
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  Speaker 2: Yeah, and there are benefits, I mean I was saying earlier,
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  Speaker 2: look at the surgeries they've been able to fund with
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  Speaker 2: the potentially saved money from the America's Cup. There are benefits.
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  Speaker 2: Presumably cost benefit analyses analyzes, you could show up the
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  Speaker 2: WAZU that would show that's actually good for the economy too.
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  Speaker 4: Indeed, and this is all what comes down to what
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  Speaker 4: economists refer to as an opportunity cost, Like it's not
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  Speaker 4: like that seventy five million dollars is not going to
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  Speaker 4: be spent at all, It's going to be spent on
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  Speaker 4: something different. And so part of that is weighing up
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  Speaker 4: where do you get most bang for buck? And I
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  Speaker 4: think that rightfully the government has gone through their finances,
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  Speaker 4: gone through all of the different asks because everyone's always
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  Speaker 4: going to the beehive and asking for more money, and said,
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  Speaker 4: look at the moment we've got to prioritize and a
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  Speaker 4: yacht race is not currently near the top of the
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  Speaker 4: request list.
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  Speaker 2: Brad Olson, Informetric, Chief Economists. Great to have your
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