In a city spending up large on RWC 2011

The sober ODT opens the new year by lobbing in some chasteness…

“The realisation that individuals, families and the country have been living beyond their means has been striking home, and people are reluctant to spend freely.

Efforts to reduce household debt, a long grind for many, have begun.

Similarly, local authority councillors and mayors – notably in Dunedin and Queenstown – have finally recognised the need for frugality and hard spending choices after seemingly believing that money could be spent with abandon.”

Another Dickens story. Thank heavens, the newspaper editor lightens up in the end.

“As Otago faces another challenging year, it is as well to remember the province’s priceless attractions – its beauty, its space, its liveable climate, its agricultural base, its history and its heart.

These characteristics are worth recalling and emphasising as we meet the challenges of 2011.”

ODT Editorial

Post by Elizabeth Kerr

4 Comments

Filed under Economics, Geography, Media

4 responses to “In a city spending up large on RWC 2011

  1. Elizabeth

    Uh-oh, rugger trials, hurting, odious* sinkholes and all that.

    ### stuff.co.nz Last updated 05:00 01/01/2011
    Rugby in the red
    By Nathan Burdon – The Southland Times
    Rugby Southland is broke after a season of overspending.
    The union owes about $700,000 to creditors, with no ability to pay, and is forecasting a deficit between $350,000 and $478,000 for the 2010 financial year. The Community Trust of Southland has agreed to advance Rugby Southland $126,000 on next year’s funding to help get it through the next few weeks.
    Read more

    *By the by, a University of Otago academic has written a searchable review for a book about “odious inequality”, and there’s the well-known legal term “odious debt” – again, searchable. In the regional and global contexts of its use, it’s sad to see the term having some application to a revered kiwi sport via its professional administrations.

    • Elizabeth

      There’s a troubling reality check in today’s ODT print and digital editions – see Calvin Oaten’s Letter to the editor, ‘Living in a bubble as rugby debts mount’ (page 8).

      He begins: “Wayne Graham says the Otago Rugby Union is working hard to avoid Southland’s problem. What is Southland’s problem? Well, it seems that after arguably the best-performing season in decades, it finished owing creditors $700,000, with no ability to pay.”

      Calvin goes on to explore the doubtful fortunes of the Otago Rugby Union, and the national rugby condition: “All unions are to a greater or lesser extent in the same position. The NZRU is running short and is budgeting for a loss of some $40 million on the RWC. Are we living in a “rugby bubble” here?” . . . Meanwhile, Bill English is borrowing $250 million per week in order to sustain our standard of living.”

      Grab a copy of the letter, frighten yourselves!

  2. Calvin Oaten

    Elizabeth, don’t be frightened, just be aware. For what it is worth, here is the unabridged version. Note the $1.3m bailout was on top of the $5.6m.

    I AM in the Christchurch Airport Terminal, whiling away a couple of hours between flights. I grab a cup of coffee and a copy of the Otago Daily Times, settle down to read. Wayne Graham says the Otago Rugby Union is working hard to avoid Southland’s problem. What is Southland’s problem? Well, it seems that after arguably the best performing season in decades that it finished owing creditors about $700,000, with no ability to pay. The Community Trust of Southland is to advance $126,000 on next year’s funding and the NZRU has also advanced $150,000, while the Invercargill Licensing Trust has yet to decide its support. The ILT has, over the last five years pumped $5.6 million into the union not including a $1.3 million bailout in 2008.

    Sound familiar? The ORFU last year recorded a loss of more than $700,000 and will record a ‘small loss’ this year. It had been carrying debt to the DCC of $2 million and $3.6 million to the BNZ. This has been relieved by the DCC paying $7 million for the purchase of Carisbrook from the ORFU. Wayne Graham says they are working “bloody hard” but the business model of the provincial game is flawed. He’s certainly got that right. Graham said they paid about $1.35 million on players last season. Never mind the travel, accommodation and other expenses. And that does not include the Highlanders, which are now a separate operation. The Super Fifteen is also seriously flawed, haemorrhaging the NZRU’s money.

    All around me Air New Zealand is saying, “We Fanatically Support the RWC”. Why? My Oxford tells me a fanatic is “one filled with excessive & mistaken enthusiasm”. It’s not wrong here. A quick look tells me that a team of players, coaches, medical support and management – say 30 – to fly return to South Africa would cost around $86,000. There are five franchises plus the All Blacks Tri-Nations so that would amount to around $520,000. And that’s just Africa. There’s Australia, internal, and of course, the end of year European All Black campaign. For that sort of money who could blame Air NZ for being fanatical?

    From all accounts, Otago and Southland are not alone in their financial woes. All unions are to a greater or lesser extent in the same position. The NZRU is running short and is budgeting for a loss of some $40 million on the RWC. Are we living in a “Rugby Bubble” here? Up and down the country hundreds of millions of dollars are being spent on new or upgrading stadiums. Almost all comes as a direct charge to rate/tax payers. The government has contributed $80 million to Auckland’s Eden Park, $15 million to here in Dunedin, $20 million to underwrite Auckland’s “Party Central” thingy. Who knows what to Christchurch and Wellington. Meanwhile, Bill English tells us he is borrowing $250 million per week in order to sustain our standard of living.

    Truly, we are all living in a “Giant Bubble”, the Moon is blue and really made of cheese. When the RWC is over, what then? A voice breaks my thoughts. “Air NZ flight so and so to Dunedin now boarding gate 5.” I drain my coffee, stand up, and step back into the real world.

    • Elizabeth

      ### stuff.co.nz Last updated 05:00 05/01/2011
      Public must support rugby funding: Tew
      By Nathan Burdon – The Southland Times
      New Zealand Rugby Union boss Steve Tew believes it is up to the Southland public to decide whether they want to see the Stags playing in the top flight of competition.
      Read more

      ****

      ### stuff.co.nz Last updated 05:00 06/01/2011
      Editorial: NZRU can’t stand aside on Southland
      Taranaki Daily News
      OPINION: “The size of [Rugby Southland’s] problem and the immediacy of it was a bit of a surprise … but from what I’ve been told by the people down there it’s going to be sorted out locally and that’s how it should be.”

      Translation: They owe how much? Oh dear. Oh well, you guys can sort it out – it’s not our problem.

      New Zealand Rugby Union boss Steve Tew seems awfully unconcerned about a financial blowout that threatens the very viability of a provincial rugby success story.
      Read more

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