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Legislative Assembly for the ACT: 2002 Week 10 Hansard (29 August) . . Page.. 3038 ..

MR QUINLAN (continuing):

the same author, to show that the car race returns less benefit than it was costing, on some assumptions.

So there has been a very dramatic change in the financial model that surrounded the V8 car race. It can be conceded that, when you are talking about attendances, discretionary spending and replacement spending in the economy, then you start building assumptions on assumptions. If you aim on the high side, it can be compounded into some very large numbers without really trying, when a different evaluation could well take you in the opposite direction.

From the examinations I have seen and read of the model, there are some clear challenges which I would support. But then there is a lot of contention relating to the number of attendees, as to how long they would stay in town and what they would spend in town-all the things which compound it up to some very attractive numbers, on face value. I would be sufficiently satisfied to say it is fairly certain that, if the basic assumptions of just attendance and the balance of attendance-in town and out of town-were accepted, then the model as presented is clear evidence that there is a substantial overstatement of the value in it.

As to exactly what the number is, if you put six economists in one room, you will get at least seven opinions. It is the same with financial modelling. There is a lot of assumption which, when multiplied by itself, will come up with quite different answers.

MR STEFANIAK: Minister, if you have not read the economic impact report-you claimed last Tuesday at your meeting with dragway representatives that you had not-how do you know whether the study overstates the benefit from the dragway? Or have you just taken Treasury's word as gospel because you have no interest whatsoever in helping fund a dragway in the ACT?

MR QUINLAN: My background does give me some understanding of financial modelling. I have not read the statement-that has been relayed to you second-hand, I gather. I cannot recall, because it was a meeting and an exchange. To clarify that, if asked today by the dragway people, I would say, "Look, I don't remember all the numbers in your financial model off by heart, but I have certainly looked over that model." Have I read every last word in it? Probably not, because you can go through a report like that and see where the numbers come from.

I can certainly recall going through the report originally. It says that these businesses were affected; there is this sort of expenditure; this expenditure per head, this many nights that people will stay in Canberra, and they will all stay in hotels. I remember all that. I certainly then read a summary of the report, which dovetails with the Treasury assessment. That says words to the effect that here are the features of the report-these are the factors and variables which go to make up the conclusions originally drawn by the model. Here is the Treasury challenge to some of those-the factors, assumptions and estimates or guesstimates, whatever you like to call them.

I have definitely read that right through. I am reasonably satisfied, Mr Stefaniak, that I understand the basis of the claim for the dragway. I have read it to the point of having a clear perception of what it is, although I do not remember all the numbers off by heart. I do not remember how much discretionary expenditure each person would have in

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