LIFE MUST GO ON
Each year, Sydney puts on one of the world’s most spectacular New Year’s Eve fireworks displays. The iconic pyrotechnics event is watched by one billion people across the globe. Late last year, there was controversy over whether the 2020 fireworks should be held while bushfires ringed greater Sydney and raged throughout other parts of Australia.
Those who called for the fireworks to be cancelled argued that going ahead would send the wrong message. An online petition – which was supported by more than a quarter of a million people – stated that “with Australia facing drought and now catastrophic fires, decimating towns as it tears across our country, the thought of spending MILLIONS of dollars on a fireworks display when it could be used to support and rebuild our country instead is infuriating”.
In response, the Lord Mayor of Sydney, Clover Moore, argued that holding the fireworks would help unite the community and that pulling the pin “would be of little practical advantage to those who have lost so much in the bush[fires]”. She added: “We are going through really tough times now and it brings us together to celebrate a New Year with hope. It’s a really important time to be together to support each other”.
The fireworks were not scrapped but went ahead to the delight of millions of people. Those who were against the fireworks display taking place remained adamant that it was the wrong thing to do. However, a woman who lost most of her possessions to a bushfire, pleaded that “the bright distraction of fireworks” be retained. The woman was previously in favour of shutting down the fireworks.
The bushfire crisis is a stark reminder of life’s ups and downs. Throughout our lives, we all experience challenges and some – like the bushfires and the current coronavirus – are extremely difficult. But we need to make space for joy even in the midst of a disaster. Indeed, a little happiness can help our struggles as positive emotions provide relief from stress.
The fireworks which ushered in 2020 distracted millions of Australians from their troubles and gave them something to celebrate. Tough times can seem easier when we focus on something other than our immediate hardship. Life goes on and so did the fireworks which metaphorically brightened the smoky-grey haze over Sydney. But it did not quell the fire of opposition from those who disagreed.
Equally, there are those who disagree with the recent decision by the NSW Government to proceed with the upcoming New Year’s Eve fireworks during the present pandemic. Announcing the decision, NSW Premier Gladys Berejiklian said Sydney’s fireworks would go ahead “in one form or another” as they are a symbol of hope and optimism which is “important for our soul and for positive thinking about next year”.
Everyday around the world, governments make spending choices. As is the case with fireworks, not all citizens agree with government spending priorities. What constitutes effectiveness in the use of public resources is hotly debated. For example, there’s the old chestnut about how much funding should be allocated to the arts versus public welfare programs.
Many believe that the composition of public spending should be tilted in favour of the neediest in society. A bias towards policies which assist poverty reduction sits well with this cohort. These individuals argue that spending money on the arts should take a back seat to feeding the hungry, sheltering the homeless and supporting the unemployed.
The problem with this argument is that there will always be people in need and fiscal interventions cannot totally eliminate poverty, no matter how much money is thrown at it. That’s why we should provide funding to the arts because, like fireworks, they are a celebration of life. Government funding of cultural activities enables people from all walks of life to enjoy the arts, which disproves the claim that they exclusively benefit the elite.
Of course, controversy about funding is not limited to the arts but can be found across many other sectors including sport. The allocation of public funds to build new stadiums and facilities is greeted with disapproval in some quarters. Such venues are seen as a drain on the public purse and a waste of money. But how do you put a value on the social good created by sport?
We celebrate our sporting champions and delight in their success. Sporting triumphs bring us together and help us put aside petty disputes as we unite as one proud nation. Sport not only entertains but provides physical activity and that is an important point for those who say that health funding (more hospitals) should take priority over sports funding (more sporting fields). If more of us exercised and played sport, we’d be healthier and there would be less demand on the health system.
The value of the arts and sport, and many other things, can’t be measured in dollars and cents alone. However, whenever there’s an economic squeeze, funding for the arts, sport and other “non-essential” activities are the first to go. Viewed through the eyes of an economist, these budget choices involve trade-offs and opportunity costs.
A trade-off occurs when we sacrifice one thing for another such as when you have only enough money to buy a car or take an overseas holiday, but not both. Trade-offs, in turn, create opportunity costs – one of the most important concepts in economics. Whenever you make a trade-off, the thing that you do not choose is your opportunity cost. As you decided to buy the car, your overseas holiday was your opportunity cost.
Because resources are scarce and needs unlimited, governments always face opportunity costs. For example, the opportunity cost of the government spending an extra $5 billion on defence equipment might mean that $5 billion less is available to spend on education. In a perfect world, it would be great to be able to do both, but that is often not possible. But that does not mean that penny-pinching spending decisions should be made about things like fireworks.
The amount spent on fireworks and other public celebratory activities – such as Australia Day – is just a drop in the bucket compared to other areas of government expenditure. With regard to the Sydney fireworks which greeted 2020, the reported cost of staging them was $5.8m. This outlay was absolutely overshadowed by the $130m generated in tourist dollars for the NSW economy – an outstanding return on investment.
Celebrating and commemorating special events is not a waste of money which is why I am more than happy for some of the taxes that I pay to be allocated to celebrating the human spirit – even during a pandemic. Three cheers to the NSW Premier for agreeing to stage this year’s fireworks.
Let’s inject some happiness into our COVID-19 affected world.
Regards
Paul J. Thomas
Chief Executive Officer
Ductus Consulting
Paul,
Congratulations on illuminating the high return on investment of the annual NYE fireworks display. I agree that it is difficult to put a value on the social good provided by sport. Investment in major stadia provides venues for elite sportsmen in a minority of sporting codes and typically promotes athletes who are paid grossly inflated salaries and who commonly represent low points in moral standards in view of the public. The social benefit to those supporters who attend stadium events is more likely measured via changes in their voting patterns than in growth of community health. Investment in the arts is commonly defended in terms of the direct (dollar) return to the economy that comes via box office and tourist incomes. This overlooks the importance of both sport and artistic accomplishments as historically defining elements of our civilisation. The absence of this from political debate is regrettable and, I believe, impoverishes our social contract. It’s also worth pointing out that practitioners in the arts are among those who can be defined as needy, hungry and often unemployed and homeless. Nonetheless they remain committed to their artistic endeavours, often to the detriment of their individual well-being. In both sporting and artistic spheres, the divide between rich and poor is at least as stark as the economic divisions of our society as a whole. Nevertheless people continue to commit to these activities, convinced that they are worthy and despite the often dismissive attitudes of our “leaders”.