Victorian taxpayers are expected to contribute more than 1.7 billion dollars over the next decade to continue hosting the Formula One Australian Grand Prix in Melbourne, according to financial estimates prepared for the Victorian Parliament. The figures have intensified debate over the cost of maintaining the global motorsport event at Albert Park as the state faces mounting public debt and ongoing budget pressures.
The cost projection comes from analysis prepared by the Victorian Parliamentary Budget Office, which examined the potential savings if the government stopped funding the race between the 2025–26 and 2035–36 financial years. The office estimated that ending the arrangement would save taxpayers about 1.7 billion dollars during that period.
Source: https://www.news.com.au/sport/motorsport/formula-one/indulgence-we-cant-afford-victorian-taxpayers-to-fork-out-17-billion-to-host-f1-over-next-10-years/news-story/ab2f3991f201001be9dce825094ad1b3
The Formula One race has been held in Melbourne since 1996 and is run by the Australian Grand Prix Corporation under contract with the global commercial rights holder Liberty Media. In 2022 the Victorian government signed a new agreement to keep the race in the city until at least 2037.
Source: https://www.premier.vic.gov.au/melbourne-takes-pole-position-f1-deal-2035
Rising Costs and Operating Losses
Financial data from the most recent race shows the event continues to operate at a loss despite record attendance and growing popularity. In 2025, the Australian Grand Prix Corporation spent around 242.9 million dollars to stage the four-day event at Albert Park. Ticket sales, sponsorship and other revenue streams generated roughly 140.6 million dollars, leaving a substantial shortfall covered largely by government funding.
Source: https://www.news.com.au/sport/motorsport/formula-one/indulgence-we-cant-afford-victorian-taxpayers-to-fork-out-17-billion-to-host-f1-over-next-10-years/news-story/ab2f3991f201001be9dce825094ad1b3
The Victorian government’s subsidy reached a record 102.33 million dollars for the 2025 race, marking the third consecutive year that public funding exceeded 100 million dollars. Similar figures were recorded in 2024 and 2023, reflecting rising operational costs linked to inflation, logistics and international hosting fees.
Source: https://www.abc.net.au/news/2026-03-04/victoria-asbestos-albert-park-melbourne-grand-prix-blowout/106415464
Despite these losses, attendance figures continue to rise. The 2025 event drew a record crowd of 465,498 spectators across the race weekend, making it one of the largest sporting gatherings ever staged in Melbourne.
Political Debate Over Public Funding
The financial burden has sparked criticism from some members of parliament. Libertarian MP David Limbrick requested the cost analysis from the Parliamentary Budget Office, arguing that public funding of the race amounts to corporate welfare.
Limbrick stated that taxpayers effectively guarantee the event’s financial viability while most residents never attend the race. According to the analysis, cancelling the race could avoid around 1.46 billion dollars in government contributions and operational costs. A further 245.7 million dollars could be saved by cancelling redevelopment works and improvements planned at Albert Park.
However, the precise financial obligations remain difficult to calculate because the contract between the Australian Grand Prix Corporation and Liberty Media is confidential. Government agencies also declined to release several internal documents during the budget analysis process, citing commercial sensitivity.
Government Defends Economic Impact
The Victorian government has strongly defended its support for the race, arguing that the broader economic benefits outweigh the annual subsidy.
Tourism and major events officials say the Grand Prix generates more than 320 million dollars in economic activity each year through tourism, hospitality, accommodation and event services.
Source: https://www.news.com.au/sport/motorsport/formula-one/indulgence-we-cant-afford-victorian-taxpayers-to-fork-out-17-billion-to-host-f1-over-next-10-years/news-story/ab2f3991f201001be9dce825094ad1b3
Government reports also suggest the event contributes significantly to the state economy by supporting around 1,600 full-time equivalent jobs in sectors such as construction, event management, transport and tourism.
Source: https://www.parliament.vic.gov.au/parliamentary-activity/hansard/hansard-details/HANSARD-2145855009-32174
Officials emphasise that major international events play an important role in promoting Melbourne globally, attracting international visitors and boosting hotel occupancy across the city.
Infrastructure Costs Add Further Pressure
Additional infrastructure spending has also added to the controversy. A major redevelopment of the pit building at Albert Park, originally constructed in the mid-1990s, is underway to meet modern Formula One and safety standards set by the Fédération Internationale de l’Automobile.
Construction costs have increased significantly after asbestos was discovered during building works, forcing safety upgrades and delays. Government officials say the works are necessary to comply with contractual obligations and international racing regulations.
Source: https://www.abc.net.au/news/2026-03-04/victoria-asbestos-albert-park-melbourne-grand-prix-blowout/106415464
Victoria’s Wider Financial Position
The debate over the Grand Prix comes as Victoria faces growing financial challenges. The state’s gross debt is projected to rise from around 188 billion dollars to nearly 240 billion dollars by 2029, according to the Victorian Auditor-General’s Office.
Recent government accounts also show continued operating losses. The general government sector reported a net operating loss of about 2.6 billion dollars in the 2024–25 financial year, although this was an improvement compared with the 4.2 billion dollar loss recorded the previous year.
Source: https://www.news.com.au/sport/motorsport/formula-one/indulgence-we-cant-afford-victorian-taxpayers-to-fork-out-17-billion-to-host-f1-over-next-10-years/news-story/ab2f3991f201001be9dce825094ad1b3
Critics argue that major event subsidies should be reconsidered in light of these fiscal pressures. Supporters counter that the race’s global exposure and tourism benefits would be difficult to replicate through other investments.
Financial Snapshot of the Australian Grand Prix
| Category | Latest Reported Figures |
|---|---|
| Total cost to host 2025 race | 242.9 million dollars |
| Total revenue from event | 140.6 million dollars |
| Government subsidy in 2025 | 102.33 million dollars |
| Record race attendance | 465,498 spectators |
| Estimated annual economic impact | Over 320 million dollars |
| Estimated taxpayer cost 2025–2035 | 1.7 billion dollars |
Annual Event Cost vs Revenue (Approximate)
| Year | Event Cost | Revenue | Government Support |
|---|---|---|---|
| 2023 | 223.5 million | 193 million | About 100 million |
| 2024 | Over 220 million | About 215 million | Over 102 million |
| 2025 | 242.9 million | 140.6 million | 102.33 million |
