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David Parker: Government considered pulling out of America's Cup over cost increase
The Government has come close to pulling out of funding the America's Cup, after construction costs ballooned by 20 percent.
Taxpayers are stumping up another $22.5 million, on top of the $114 million already contributed.
Final designs found construction costs for dredging and wave breakers will be higher than originally forecast.
The Minister in charge, David Parker, says it's a considerable increase, and Cabinet considered pulling the plug, and letting the event be held overseas.
"Something I definitely considered. We have a responsibility for spending taxpaying money, and when you have that sort of increase in cost, you look at whether we should be proceeding or not."
He says that they weighed it up against the benefits to New Zealand, which include economic growth benefits, more tourism, increased tax.
"Overall we thought it was still in the economic interests of the country."
Parker told Mike Hosking that economic benefit will be huge.
"We had this analysis that this will be adding between $550 million and $1 billion to the economy. Overall, we thought it was justified and went ahead."
Parker says he's had mixed feelings about it all the way through.
"We're not expecting any further cost overruns, because if we were we'd effectively be bound to pay them."
He says the Government is now signing contracts to get things underway.
The Government's commitment is also subject to Auckland Council upping its contribution, with a meeting tomorrow expected to rubber stamp another $14.5 million for the event.
LISTEN TO DAVID PARKER TALK WITH MIKE HOSKING ABOVE
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By Newstalk ZBThe Government has come close to pulling out of funding the America's Cup, after construction costs ballooned by 20 percent.
Taxpayers are stumping up another $22.5 million, on top of the $114 million already contributed.
Final designs found construction costs for dredging and wave breakers will be higher than originally forecast.
The Minister in charge, David Parker, says it's a considerable increase, and Cabinet considered pulling the plug, and letting the event be held overseas.
"Something I definitely considered. We have a responsibility for spending taxpaying money, and when you have that sort of increase in cost, you look at whether we should be proceeding or not."
He says that they weighed it up against the benefits to New Zealand, which include economic growth benefits, more tourism, increased tax.
"Overall we thought it was still in the economic interests of the country."
Parker told Mike Hosking that economic benefit will be huge.
"We had this analysis that this will be adding between $550 million and $1 billion to the economy. Overall, we thought it was justified and went ahead."
Parker says he's had mixed feelings about it all the way through.
"We're not expecting any further cost overruns, because if we were we'd effectively be bound to pay them."
He says the Government is now signing contracts to get things underway.
The Government's commitment is also subject to Auckland Council upping its contribution, with a meeting tomorrow expected to rubber stamp another $14.5 million for the event.
LISTEN TO DAVID PARKER TALK WITH MIKE HOSKING ABOVE