Australian Government's 2021 MYEFO banks on loss of tax revenues due to 2023 World Cup

One of the many demands FIFA place on host nations for international tournaments are 'government guarantees'. 

They were first brought to the attention of many in the 2018/2022 (men's) World Cup bidding contest when the Parliament of the Netherlands was so incensed with the demands placed on nations that they published the guarantees on the Parliamentary website and refused to support their government agreeing to them in their joint bid with Belgium.

I also wrote about them in relation to the Australian bid in my book, Whatever It Takes - The Inside Story of the FIFA Way. 

However, FIFA (and the IOC and other major sports) hold all cards in their favour when it comes to naming hosts for their major tournaments, and no nation will win hosting rights without agreeing to the government guarantees. 

The guarantees cover a number of areas, but the most problematic for most western governments relate to tax, immigration and travel guarantees, the granting of work permits, unlimited indemnification, and the extent to which protection of commercial rights is required. 

FIFA bidding documents in relation to tax require that host nation governments:

”.... must grant a general tax exemption for FIFA, the organising entity and any subsidiaries, and any other FIFA subsidiary limited to the period of preparation, delivery and wrap-up of the Competition, commencing on the date of appointment of the Host Country/Host Countries and ending on 31 December 2028.”

This year's Mid-Year Economic and Fiscal Outlook (MYEFO) statement, issued on 17 December 2021, makes provision for the tax exemptions granted by the Australian Government for FIFA for the 2023 Women's World Cup to be staged here. The MYEFO statement notes:

“The Government will provide income tax exemptions to Fédération Internationale de Football Association (FIFA) and an Australian subsidiary for the FIFA 2023 Women’s World Cup to be held in Australia and New Zealand in 2023. This exemption will apply from 1 July 2020 to 31 December 2028.

The entities will also be provided an exemption from interest, dividend and royalty withholding tax liabilities. The exemptions are part of the Government’s commitment to support FIFA to stage the Women’s World Cup in Australia.  

This measure is estimated to result in an unquantifiable decrease in receipts over the forward estimates period.”

In addition to the “unquantifiable decrease in receipts” noted in MYEFO, the Australian Government is also underwriting staging of the World Cup with a cash injection of around $100 million, and state governments are also providing support. 

From the Government's perspective - and especially when combined with the $50 million they also provided for the 2022 bid - they give plenty of money to football; it's just not in the form of funding for infrastructure and other priorities that many in football would like to see.

In short, you can't have your cake and eat it too when it comes to government funding. 

So far, the 'legacy' plans emanating from Football Australia headquarters are all about the access of women and girls to the game. There is an element of necessary 'catch-up' implicit in such initiatives and it is welcome.

However, having made the decision to focus government largesse and goodwill via a World Cup investment - which will, no doubt, be well-managed and lots of fun for five weeks - it is also important that the Football Australia Board ensures the legacy genuinely delivers for all parts of the game. The World Cup in Australia must be a game-changer for all of football for generations to come; one that will continue to have an impact well into the second half of this century.