Mr MITCHELL - 1995-02-21
I understand from recent media reports that the Northern Territory Football League is in financial trouble. Can the minister advise what steps, if any, are being taken by the Department of Sport and Recreation to address those problems?
Page 417
ANSWER
Mr Speaker, it is indeed an unfortunate situation. In my time as Minister for Sport and Recreation, I have seen many great new initiatives and a great deal of progress occur around the Territory, particularly in the Top End at Marrara, with the multi-venue Football Park being at the forefront of those developments. I believe the fact that the facility was floodlit a few months ago really was the icing on the cake. However, the current financial situation of the Northern Territory Football League, which first came to the attention of my department late last year, has overshadowed its many successes to date.
In December last year, the league executive advised my department that it was experiencing some financial difficulties, and that it required an immediate grant of some $187 000 if it was to resolve its problems. Apparently, this funding was required to reimburse costs incurred by the NTFL in constructing 6 corporate boxes and the purchase of other assets after the initial move to Football Park. It must be remembered that, in April 1993, the Department of Sport and Recreation advised the NTFL that the construction of the corporate boxes was purely a commercial matter and that the NTFL was responsible for funding that project. During this time, the Department of Industries and Development was requested to undertake an analysis of the NTFL's financial position and a report was received in December last year. Briefly, it concluded that the league had a working capital deficiency, as at the end of September 1994, of approximately $240 000. The report went on to say that this situation was a direct result of the NTFL's decision to use working capital funds and borrowed funds to construct those corporate boxes.
Throughout January 1995, departmental officers sought and obtained further financial information from the NTFL. I must say that I was a little disappointed that, at that time, the NTFL was unable to provide my department with any indication as to its likely financial position 12, 24 or 36 months down the road. Consequently, officers from the department met again with the NTFL executive on 10 February and offered the assistance of a local accounting firm to assess the NTFL's likely financial position in 3 years time based on a number of scenarios. My department received that report on 17 February.
I can understand the dilemma that the NTFL has and I also understand that it has lobbied directly to many members with a written submission which made unsubstantiated claims about the financial situation of the NTFL prior to the compilation of that report. In that submission, the NTFL claimed that it needed some $140 000 per annum to survive. However, let me add that the accountant's report stated: 'The NTFL requires additional funds totalling some $231 000 over the next 3 months to enable creditors' accounts to be brought in line with favourable trading terms'. It went on to state that, without any government assistance, the league would be able to make a profit in 1996-97 of more than $13 000, which would nearly double in the next financial year. Thus, even the accountant's findings support those of the Department of Industries and Development as to the immediate problems of the NTFL. However, the figures indicate that there is no need for the government to subsidise the NTFL's operations in future years.
At this time, I guess it is worth making the point that there has been public comment and some media mileage has been made of the so-called government promise that the NTFL would be no worse off at Football Park than it had been at Gardens Oval. Some statements have been
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made that the league was forced to go to Marrara. Whilst I did not have the portfolio at the time, I do recall the excitement of the NTFL and the comments that were made by its then president, Tony Shaw, about the move to Marrara. The league was certainly not forced to go to Marrara, and it is not because of a government promise that the NTFL is in trouble. It is in trouble because it has made some decisions that have created a problem for it.
Some $66 000 was made available to the NTFL in its first year at Marrara to defray operating costs above those incurred at Gardens Oval. That was to reduce to $33 000 in the 1992-93 year, to $16 500 in 1993-94 and to zero in subsequent years. That was agreed to by the NTFL. I cannot say strongly enough that the league prepared its own financial plan. Certainly, the government, through the Department of Sport and Recreation, agreed with its financial planning but, unfortunate as the situation may now be, the whole of the financial difficulties encountered by the NTFL relate essentially to its decision to build the corporate boxes even though those boxes have generated considerable revenue to the league.
I have received further advice from my department this morning. A number of options are available to assist the NTFL, and I would like to assure supporters of the NTFL that there is no way that the government will allow the organisation to vanish into history. I will be discussing the options over the coming few days with my colleagues and we will see what can be done to assist the NTFL.
Page 419
Page 417
ANSWER
Mr Speaker, it is indeed an unfortunate situation. In my time as Minister for Sport and Recreation, I have seen many great new initiatives and a great deal of progress occur around the Territory, particularly in the Top End at Marrara, with the multi-venue Football Park being at the forefront of those developments. I believe the fact that the facility was floodlit a few months ago really was the icing on the cake. However, the current financial situation of the Northern Territory Football League, which first came to the attention of my department late last year, has overshadowed its many successes to date.
In December last year, the league executive advised my department that it was experiencing some financial difficulties, and that it required an immediate grant of some $187 000 if it was to resolve its problems. Apparently, this funding was required to reimburse costs incurred by the NTFL in constructing 6 corporate boxes and the purchase of other assets after the initial move to Football Park. It must be remembered that, in April 1993, the Department of Sport and Recreation advised the NTFL that the construction of the corporate boxes was purely a commercial matter and that the NTFL was responsible for funding that project. During this time, the Department of Industries and Development was requested to undertake an analysis of the NTFL's financial position and a report was received in December last year. Briefly, it concluded that the league had a working capital deficiency, as at the end of September 1994, of approximately $240 000. The report went on to say that this situation was a direct result of the NTFL's decision to use working capital funds and borrowed funds to construct those corporate boxes.
Throughout January 1995, departmental officers sought and obtained further financial information from the NTFL. I must say that I was a little disappointed that, at that time, the NTFL was unable to provide my department with any indication as to its likely financial position 12, 24 or 36 months down the road. Consequently, officers from the department met again with the NTFL executive on 10 February and offered the assistance of a local accounting firm to assess the NTFL's likely financial position in 3 years time based on a number of scenarios. My department received that report on 17 February.
I can understand the dilemma that the NTFL has and I also understand that it has lobbied directly to many members with a written submission which made unsubstantiated claims about the financial situation of the NTFL prior to the compilation of that report. In that submission, the NTFL claimed that it needed some $140 000 per annum to survive. However, let me add that the accountant's report stated: 'The NTFL requires additional funds totalling some $231 000 over the next 3 months to enable creditors' accounts to be brought in line with favourable trading terms'. It went on to state that, without any government assistance, the league would be able to make a profit in 1996-97 of more than $13 000, which would nearly double in the next financial year. Thus, even the accountant's findings support those of the Department of Industries and Development as to the immediate problems of the NTFL. However, the figures indicate that there is no need for the government to subsidise the NTFL's operations in future years.
At this time, I guess it is worth making the point that there has been public comment and some media mileage has been made of the so-called government promise that the NTFL would be no worse off at Football Park than it had been at Gardens Oval. Some statements have been
Page 418
made that the league was forced to go to Marrara. Whilst I did not have the portfolio at the time, I do recall the excitement of the NTFL and the comments that were made by its then president, Tony Shaw, about the move to Marrara. The league was certainly not forced to go to Marrara, and it is not because of a government promise that the NTFL is in trouble. It is in trouble because it has made some decisions that have created a problem for it.
Some $66 000 was made available to the NTFL in its first year at Marrara to defray operating costs above those incurred at Gardens Oval. That was to reduce to $33 000 in the 1992-93 year, to $16 500 in 1993-94 and to zero in subsequent years. That was agreed to by the NTFL. I cannot say strongly enough that the league prepared its own financial plan. Certainly, the government, through the Department of Sport and Recreation, agreed with its financial planning but, unfortunate as the situation may now be, the whole of the financial difficulties encountered by the NTFL relate essentially to its decision to build the corporate boxes even though those boxes have generated considerable revenue to the league.
I have received further advice from my department this morning. A number of options are available to assist the NTFL, and I would like to assure supporters of the NTFL that there is no way that the government will allow the organisation to vanish into history. I will be discussing the options over the coming few days with my colleagues and we will see what can be done to assist the NTFL.
Page 419
Last updated: 09 Aug 2016