Independent review of Hobart's proposed Macquarie Point stadium flags 'mismanagement' and $1.1 billion cost   


Dec4 2024
ABC News



In short:
A government-commissioned independent report into Hobart's proposed new stadium has found the costs of the project have been significantly underestimated and the benefits overestimated.

Economist Nicholas Gruen's report has warned the project displays "the hallmarks of mismanagement" and will likely cost more than $1 billion — $785 million of that from the Tasmanian government.

What's next?
The Rockliff government has thanked Dr Gruen "for his work" but will be "moving ahead" with the project.


A leading independent economist tasked with reviewing the proposed Macquarie Point stadium in Hobart has found the project is "already displaying the hallmarks of mismanagement" and is likely to cost more than $1 billion.

Economist Nicholas Gruen was commissioned to write the report early last year as part of the minority Liberal government's agreement with the Jacqui Lambie Network.

The report is a scathing assessment of the proposed stadium and finds the costs are "significantly understated", benefits "overstated", and the projected $775 million price tag is unrealistic.

an aerial view of a large stadium on the hobart waterfront
The Tasmanian government says its contribution will be capped at $375 million but the report says it will need to fork out $785 million instead.

The Tasmanian government pledged at the last election to cap its investment in the stadium at $375 million, but Dr Gruen said this commitment "cannot be met".   

He estimated the true cost to Tasmanian taxpayers was $785 million, with the remainder of the funds coming from the Commonwealth, the AFL and other sales, for a total cost of $1.096 billion.   





Nicholas Gruen tells ABC Radio Mornings about his assessment of the economic case for the Macquarie Point stadium

The report also suggested the wrong site was picked for the stadium, as other locations that likely had a lower cost and more community support were rejected.

However, the Rockliff government has not been deterred.

Upon releasing the report on Friday morning, Tasmanian government minister Eric Abetz said, "We thank Dr Gruen for his work, and in preparing the report".

He then said the government was "moving ahead" with delivering the project.

What the report says
The 170-page Gruen report is damning.

It finds fault with the AFL's agreement with the Tasmanian government, describing it as imposing "needless costs and restraints on the realisation of a Tasmanian team", argues the timeline for the project is unrealistic and site selection was flawed.   

Detailed plans for Hobart's proposed AFL stadium reveal cost jump to $775m
Photo shows A concept image for Hobart's Macquarie Point stadium.A concept image for Hobart's Macquarie Point stadium.
The development application for a proposed multi-purpose stadium in Hobart has been lodged, with construction expected to cost $60 million more than previously estimated.

"The site selection analysis released was hasty and partial and gives the strong impression of being crafted to support conclusions already made," Dr Gruen wrote.

"I think it likely that the site selection process rejected sites that would have generated lower costs and higher benefits while receiving greater community support."

But it appeared to be the cost of the project that Dr Gruen found most alarming, writing that the project "can reasonably be estimated to exceed $1 billion, with a benefit-cost ratio of 44 cents in every dollar invested in Tasmania".

"Cost blowouts and unacknowledged costs mean that it is already clear that the government's undertaking to build the stadium without borrowing more than $375 million cannot be responsibly met, " he wrote.


The report suggests Macquarie Point might not be the right site for the stadium.

He said the government's insistence that it can meet its $375 million cap is having adverse effects on the project that "will intensify over time".

"Official reporting on the progress of the project is not candid. This undermines the community's trust in the process," he said.

"Various means are being used to disguise the true cost of the project."

Will Hobart's new stadium deliver bang for its buck?

The numbers are eye-wateringly large, with some economists worried the financial burden will be too great.

Dr Gruen claimed one of the ways the government was disguising costs was by increasing the estimated value of land sales by over 50 per cent, at the same time as estimated costs of the stadium rose.

"I am unaware of any real developments in the land being prepared for sale or its valuation that would justify such a treatment," he wrote.

He said the land sale was being used as a "magic asterisk" to bring down the cost of the project.

Other methods included certain aspects of the project being left out of cost calculations, including the relocation of the Goods Shed.