If you were running the Victorian Government what would you do with a spare billion dollars? Education, health, clean energy, public transport, the arts, reduced taxes or something else entirely?

What you probably wouldnt do is give it to a company to run an event which adds to greenhouse gases; causes noise pollution; refuses to adopt normal standards of financial accountability; and, consistently produces misleading figures on its State economic benefit.

Its easy to guess the event the Melbourne Grand Prix although the billion dollar sum might be a bit of a surprise.

The details though are in the annual material the indefatigable Peter Logan of the Save Albert Park group sends out on the Grand Prixs cost. This year Peter also supplied a detailed spread sheet listing the sums involved which came to $906 million in direct contributions and more than $1.5 billion when Park Victoria subsidies, government agency sponsorships, free public transport and setting up and pulling down costs are included.

Over lunch the week after the race I asked a friend what he thought the subsidy was and within seconds he replied: Well at an average of $50 million a year over 25 years it has to be more than a billion without counting any other costs. He was an accountant and former company CEO but the simple arithmetic seems to be beyond the Victorian Government.

Peter Logan said: Well, the direct payments to the Australian Grand Prix Corporation only total $906.273million but there are many more little amounts they are given (a hedge fund paid by Treasury but carried off balance sheet by the AGPC is one such) or allowed to forego, eg rent subsidy from Parks Victoria. PV is cash starved but limited to a maximum rent of $100,000 per annum, as per the Australian Grand Prix Act 1994.

My spreadsheet lists all the possible subsidies that I can find. There are probably more. Its not an economic study nor is it an audit of their accounts. For example, if you run a farm or a business every dollar of capital supplied by a bank attracts interest, similarly every dollar supplied to the AGPC by Treasury is debt that could be paid off or an opportunity cost for the state, Logan said.

But the remarkable thing is how little media attention this reality gets in Victoria with the notable exception of Age journalist, Greg Baum, who does an annual take down of the race this year writing: The grand prix is ripping off Victorians. Says who? The Greens? The ACCC? That pesky Save Albert Park protest group? Actually, its Bernie Ecclestone, the man who did the deal in the first place.

Bernie is 88 now, consists mostly of hairline and sunglasses, and has only a token role in Formula One…In little-reported remarks made at the Bahrain GP two years ago, he said: When I convinced these people to build this place, and all the other places, I feel a little bit responsible. I charged them too much for what we provided it went on my watch, we didnt deliver the show that we charged them for.

Melbournes boosters always claimed that because of a soulfully close relationship between . Bernie and the lateRon Walker, we got our race at mates rates. But did we? Do we? Lets set aside for a moment the central absurdity of the GP set-up: we pay to use our own park and civic resources, were the landlord who pays the tenant, F1 is the user who gets paid.

Other host cities pay anything from zero (Monaco) to $105 million (Abu Dhabi). Europes big-name tracks pay roughly the same as Melbourne. The thing is that while Melbourne professes itself to be deliriously happy, the other hosts are not. Up to and including famous Silverstone in England, theyre going in convoy to demand discounts from Liberty Media, the American company that bought F1 from bargain basement Bernie for $8 billion two years ago.

Liberty is feeling the pressure. Bernie had done a very good job, arguably too good a job, and had drained the promoters, chief executive Greg Maffei told a Deutsche Bank conference recently. Countries are bailing out of hosting races and, as Baum said: Liberty is looking elsewhere, to places that like Melbourne and Azerbaijan dont ask questions.

Needless to say the various estimates of the value the race provides to Melbourne have been a process which makes the accounting for Trump family business worth, for instance when he had to approach Deutsche Bank to bail him out, look like gold standard reporting. Various claims over the years have been based on the advertising value of exposure assuming a viewing audience bigger than the World Cup or the Olympics, tourism benefits and laughingly technology transfer.

The Auditor-General has consistently pointed out that many of these claims are dubious. But they continue to be made. Why? A former Cabinet Minister, now retired, confessed privately that to get rid of it would endanger the government because research indicated that it would be seen as a sop to inner urban hipsters rather than the rest of Victorians.

The other irony is that, while the government is regularly promoting its technological achievements and support, the AGPC is the only major Victorian event which estimates attendance rather than using the bar code reader technology applied in trillions of places around the world from sporting arenas to local shops.

South Australia was delighted when Jeff Kennett poached the event and soon after generated much more economic benefit from staging a Ring cycle. Perhaps when the Victorian contract is up in 2023 we will be lucky enough to have someone poach it from us.

Noel Turnbull blogs at www.noelturnbull.com/blog/ and is a retired PR consultant