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Premier John Brumby says no decision has been made about the Grand Prix's future.
The same goes for the World Swimming Championships, held earlier this year, which cost the state $11 million.
Melbourne has hosted Australia's Formula One Grand Prix for just over a decade. Each and every year, the so-called signature event has operated at a loss.
In the past two years, the cost to taxpayers has more than doubled, from just over $13.5 million in 2005 to a whopping $34.6 million in 2007.
If the trend continues, next year's event could cost taxpayers as much as $60 million, and beyond 2010 its future appears to be in doubt.
A fan of the Grand Prix, Mr Brumby says a decision will be made sometime next year.
"We have the event until 2010, beyond that we need to renegotiate for a new event," he said.
"I've said there are really two tests for the Government to keep it simple: first, does it remain a good event for the state?
"And secondly, would any arrangements going forward represent good value for the state?"
Melbourne prides itself on being the nation's capital of major events.
The way the Premier sees it, major events are to Melbourne what the Opera House is to Sydney and the Great Barrier Reef is to Queensland.
But he says many of these events come at a price.
"Generally if you look what's happening around the world today the cost of major events is being bid up," he said.
"Whether it's a sporting event, whether it's an arts event, whether it's a grand slam tennis event, the cost of these events are being bid up."
'Poor management'
With the Grand Prix suffering from declining attendance, declining revenue and increased costs, many are asking, 'When is enough enough?'
The Victorian Liberals are accusing the Brumby Government of financial mismanagement.
Opposition tourism spokeswoman Louise Asher asks what the Government is doing to keep the costs manageable.
"The Grand Prix has been a fantastic event for Melbourne, and in terms of the tourism strategy of making Melbourne an events capital, it's played a fantastic role," she said.
"But the big issue is the way the Government is managing the event."
Kennett backs event
Former premier Jeff Kennett played a key role in stealing the Grand Prix from South Australia in the mid-1990s.
He says Victoria should write-off the costs of hosting the event as a marketing expense.
"I don't consider this to be an expenditure on a motor race alone," he said.
"It's an expenditure on a positioning event that helps develop and maintain Melbourne's brand.
"The Grand Prix itself is integral to Melbourne's reputation in terms of its broader confidence levels."
Insiders have told the ABC's PM program that the Brumby Government is losing interest in the Grand Prix.
But Mr Kennett says the costs of keeping the Grand Prix are still worth it.
"These figures of course only reflect the outgoings by Government," he said.
"They do not reflect the financial incomings to all the hotels, to the hospitality, to the manufacturers of memorabilia, to the taxis etc, etc." © 2007 Australian Broadcasting Corporation
Posted November 3rd, 2007 by Dinka
