The Supercars spin is all about the injection of cash the event is supposed to provide. Evidence from the previous Newcastle 500 events and the 2023 race prove otherwise. A few hotels (Newcastle does not have many) and nearby businesses selling alcohol, were able to recuperate some losses suffered during the pre-race closure of the peninsula. No-one else was able to capitalise on the race fans as customers. We’ve seen that no matter what businesses do to try and attract fans, the reality is that race fans simply want to get into the circuit. Their only interest is the cars. Nothing else. Their food and beverage needs are met inside the track by Supercars-preferred suppliers from out of town. Not local. Photographs from every event tell the same story. While local cafes and restaurants bleed money, Supercars fans line up for fast food and beers inside the track. Businesses such as tax accountants, barbers, medical services, galleries, hairdressers, design shops, clothing stores, homewares stores, engineering companies, architects, finance advisers, gyms, lawyers etc. get NO business from the event.
And Supercars uses Gema Group from Sydney to cater for the event. All that money flows OUT of Newcastle.
The security company came from Sydney. (Previously they have also come from Queensland.) They brought their own staff with them. We had hoped the staff would stay in Newcastle hotels, but instead they had to “camp” inside the PCYC at Broadmeadow. So no cash flow to Newcastle there.
IEDM is the Supercars-affiliated company used to install the race infrastructure…based in Queensland in the same office building as Supercars. Not local.
Volunteers (there were fewer this year) were camped at Maitland showground, so did not spend money in the Newcastle LGA. No-where inside the circuit was there an opportunity to pump money back into the local economy, yet Newcastle residents and business owners pay twice for Supercars…once with their tax money and again with their rate money.
Small businesses rely on return customers, locals and foot traffic. They got none of this during the event. Darby Street (Newcastle’s eat street), outside the event precinct, but close-by, was extremely quiet. Traders there and closer to the circuit reported a decline as soon as work began on building the track. This is partly because patrons don’t want to tackle the traffic snarls, road closures and inconvenience, so they stop visiting the city. For many, that change in habit becomes permanent as they make new connections to cafes and pubs away from town. Another problem is that a huge number of locals leave Newcastle with their families in order to avoid the race. They spend their money elsewhere during the race. All that local trade is lost as well. Local businesses reported losses of 70%-75%. Some who did trade well on the Saturday and Sunday, reported that they only broke even due to the downturn in the lead up to the race and the slow return of customers after the event.
So while Newcastle residents exit the city and boost the profits of other LGAs, the Supercars fans who come in, spend their money at mostly non-local outlets and boost the profits of Sydney and Queensland companies.
In the midst of all the chaos, a cruise ship loaded with passengers arrived in port. The horrified visitors could not access any of Newcastle’s historic, environmental or cultural features. The best of Newcastle’s iconic beaches, monuments, coastal walks and parklands were hidden behind ugly fences and barricades. The cruise passengers were transported to other LGAs to spend their money – and will probably never return. It is almost impossible to conclude that approximately $30 million is ‘injected’ into the economy when our city is deserted. The Supercars event impacts negatively on the city due to two important factors: displacement and leakage. Displacement is a measure of the volume of normal activity displaced by an event. Leakage is money that is NOT spent in the host community but goes OUT of the local community. For instance, when race patrons stay at international hotel chains, rather than locally owned ones.
Displacement and leakage are especially damaging in Newcastle due to the lengthy time the event and the infrastructure is here.
It’s obvious that the money spent by our ‘visitors’ did NOT go into the Newcastle economy but instead made its way out of Newcastle via non-local traders and contractors.
The dollars flowed to the food vans, alcohol suppliers, the sponsor merchandising, equipment hire companies and NOT to Newcastle businesses. On Saturday night Hunter Street restaurants were nearly empty, yet on a ‘normal’ Saturday they would be operating to capacity.
There are many thousands of people who are not interested in the event, don’t go to the event even though it is in their city and avoid all areas of the city that are affected by the event. There is a mass exodus of families out of Newcastle. This means that the local spend economy (normally regular and sustainable) is taken to other LGAs.
The money doesn’t stay in Newcastle. Local businesses have data that shows the correlation between business downturn and the period of time that Supercars occupies the city. CON and the state government bolster the economies of other regions by absorbing all the race costs and race disadvantages here in Newcastle.
Newcastle people deserve to know the truth behind the spin. CON’s costs are hidden in the way they publish budget statements. For instance, the roads for the circuit must be resurfaced before each event (under the terms of the agreement). Yet there is no mention of the Supercars road program in council documents. Instead, the cost is included (and hidden) in ‘general road maintenance’ for the whole city. Ludicrously, the new road through the Foreshore Park behind Nobbys Beach (only used for 3 days each year) has to be resurfaced before each event, under general road maintenance, even though it is only used by Supercars on the 3 days of racing.
Looking at the Supercars event this year, it is apparent they are tightening their belts. Shortcuts and cutting corners were frequently observed. The main reason for locating the concerts inside the circuit would have been to keep patrons captive, so that they ate and drank inside the Supercars compound rather than going for dinner outside. This had the effect of adding to their Supercars profits, while reducing patronage at local cafes and restaurants.
We have seen in previous events how slowly the uptake for local businesses is during and after the bump-out. People know from experience that road closures and dismantling operations last long after the race is over. The Newcastle 500 is NOT just for three days! By the time Supercars moved the circus on, the summer was well and truly over. Any opportunities to capture the last of the summer trade season were lost.