Editorial: Bermuda will still blow a benefit to NZ

35th America's Cup, Venue Announcement.

Opinion

Choice of venue not the best but there is merit in Government providing reduced level of funding.

The confirmation of Bermuda as the venue for the 2017 America's Cup presents the Government with a ticklish problem. Economic Development Minister Steven Joyce's first impulse was to paint this as a substantial setback for Team New Zealand's prospect of attracting further taxpayer funding.

Bermuda, he said, was a "much less attractive" choice than San Diego because of the scarce opportunities to promote New Zealand business. That much is true, but missing from the minister's summation was any mention of the other pluses previously attached to this country's presence.

In support of funding Team New Zealand, governments have routinely noted also the benefit to the country's brand, not least in attracting tourists and highlighting its expertise in all matters yachting. That exposure will still be provided by Bermuda, perhaps even more so because of the friendly time zone for television viewing in Europe and America. Further, there is a strong prospect that boat building and design work for the event will take place here. That will not change with the choice of Bermuda.

It is these factors, not solely the commercial potential offered by previous America's Cups regattas, that have persuaded economists of a substantial benefit to this country. One impact report estimated the last campaign in San Francisco added $87 million to the economy, raised $17 million in additional net tax and about $38 million direct and flow-on tax. Such estimates tend, however, to be viewed sceptically, not least by the Treasury, which has labelled taxpayer backing for the next America's Cup "poor value for money".

Nonetheless, the Government should be considering more than just the loss of an opportunity for New Zealand Inc to get leverage on the west coast of the United States. It will need also to take note of Team New Zealand's plan to host all the America's Cup entrants for racing on the waters of the inner Waitemata.

As Mr Joyce noted, the exact nature of this is "a bit sketchy at the moment".

If, however, it involves the first qualifying series raced in the full-sized 62-foot foiling catamarans, that would be something of a coup. The obvious stumbling block is the other challengers' view of the advantage handed to the home team.

Bermuda is being touted as a venue where, as in Fremantle and Newport, local people will embrace the event.

But the West Australians and the residents of Rhode Island had national teams to support. Interest in sailing is widespread in Bermuda, but it is difficult to see intense interest in a regatta in which it is not represented. But the racing in the open waters off the British territory could be a plus for Team New Zealand.

The wide variety of wind conditions and strength appeals as being more akin to Auckland than the more consistent breezes off San Diego.

Mr Joyce appears to be acknowledging that investing a similar amount to the $36 million contributed last time is a step too far given the choice of venue and Team Oracle USA's event protocol.

But this is not an all-or-nothing situation. Team New Zealand's participation will bring benefits to this country, and any government will be only too pleased to associate itself with a successful campaign.

There should be taxpayer funding, but of a reduced sum that reflects the realities of the 35th America's Cup.