The related Cabinet paper cast the spending as part of the Government’s Going for Growth strategy.
Was there an economic benefit? MBIE refused to release the evaluation work outside the Official Information Act, but the economics consultancy Fresh Info, which supplied the work to MBIE, filled in many of the blanks.
You wouldn’t know it from the proactively released snippets but international visitors made up just 2000 of that 76,000 total, less than 3%.
Their spending is estimated at $2100 a head, then discounted by 65% to account for the fact they buy and use resources, which leaves 35% as economic benefit, call it $1.4m. Fair enough.
New Zealand vs Chile in the Government-funded Fifa friendlies at Eden Park in March. Photo / Joshua Devenie www.photosport.nz
But there’s not a lot more economic value than that. Sensible evaluations don’t ascribe much value to out-of-town Kiwis attending events because it’s widely recognised these visitors have simply moved their money around the country, absent the concert or the football and they’d have spent it anyway, probably closer to home.
The locals who attend the events do a version of the same thing, shifting spending that would have happened anyway.
That leaves us with a clear economic loss for the evaluated events, which Fresh Info managing director Shane Vuletich confirmed to the Herald.
The total net benefit was generated on the strength of what economists call “consumer surplus”. According to the analysis, the events generated $21.2m worth of it.
For the uninitiated, consumer surplus tallies the extra value, call it the joy, that represents the difference between the actual money a punter spends to attend the event and the hypothetical additional amount they would have willingly spent for the great pleasure derived.
If it sounds like pixie dust, that’s because it is. You can survey people all you like but you can’t really know if someone would have paid more for a ticket unless they actually do pay more.
So count it a win for pick-me-ups and good vibes, which are, after all, useful to an incumbent Government in an election year.
Tourism Minister Louise Upston claims the first four Government-funded big events from the Events Attraction Package returned a net benefit of $15 million. That figure was entirely down to a “consumer surplus” value for something akin to good vibes calculated at $21.5m. Photo / Michael Craig
In fairness it’s a step up from the numbers Upston peddled to justify the events spending in the first place; every dollar spent on live performance returns $3.20 in benefits to the community, she noted in her Cabinet paper.
That gem comes from a Massey University paper of 2024: Measuring and Articulating the Value of Live Performance in Aotearoa.
The work manages to find that the economic benefit of live performance in New Zealand, in the year to June 2024, was a whopping $17.3 billion. For scale, that’s not far off the size of the country’s education budget that year.
The total breaks down into $8.7b of joy and wellbeing and $8.6b of economic value, the latter reached by tallying all sorts of economic ripples and knock-ons through widely discredited input-output modelling. Bags of Crown money left in town squares would also have a similar effect but that doesn’t make the idea a good use of public money.
What impartial academic body funded this work? The Ministry of Culture and Heritage, whose raison d’etre includes handing out public funds for live events. If they were a drug company you’d rightly dismiss the academic findings they’d funded.
How much did we pay? A cool $780,000, doled out of the Covid-era Cultural Sector Regeneration Fund and it bought the academic paper as well as sector engagement, data collection, research (including a novel decolonising methodology), and a presentation of findings to the National Summit on the Economic and Wellbeing Value of Live Performance in November 2024, held at Massey.
The work even included a free (to use) live performance value calculator. It’s a lot of fun. I ran my wedding through it – ticket price $0; expected patrons 100, number of volunteers 20; average hours per volunteer 25 – and it calculated a total social and economic value of $95,000. Priceless.
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