FORGET Abenomics and all the global blather about national debt, stimulus packages, currency strength, GDP and balance of trade. Instead, check out this interesting economic equation.
Even though the good citizens of the Australian state of Victoria will pretty much pull down the shutters for four days over the next week, the state’s economy will grow by roughly A$400 million (S$470 million) while everyone’s kicking back and chilling out.
About time, too. Unemployment is high, petrol prices are rising, manufacturing is in strife, major factories have laid off workers and residents are being slugged for a A$5 billion desalination plant that isn't even fully operational.
Even the landmark Alcoa aluminium smelter on the state’s coast had to be given a A$44 million taxpayer-funded government lifeline last year in order to stay operational.
So where will this huge A$400 million windfall come from? A massive cash injection from new Prime Minister Tony Abbott’s coalition government? Nope.
It’ll come from the four-day Melbourne Cup horse racing carnival. I kid you not.
National newspaper The Australian reported this week: “Last year, the carnival injected about A$370 million into the Victorian economy, with 54,000 visitors spending A$27 million on accommodation alone”.
Since 2000, the carnival has consistently drawn more than 350,000 fans in total to the historic Flemington racecourse.
The four races that comprise the showcase week are the Victoria Derby, the Melbourne Cup, Oaks Day and Stakes Day.
According to gaming website Tatts.com, Australians wagered a massive A$150 million in Melbourne Cup bets in 2011, peaking at about 70,000 bets a minute. Those figures speak volumes about the 153-year-old, 3.2km race that famously stops a nation in its tracks.
Australians refer to it simply as “the Cup” and this year the race carries A$6.2 million in prize money. But getting a shot at the rich purse does not come cheap. Each owner must pay a total entrance fee of more than A$50,000 to enter a horse in the 24-strong field.
Workplaces commonly hold “sweeps” in which each employee pays a nominal entry fee to pick the name of a horse out of a hat, with the winner taking most of the money collected. Those who pick the horses that finish second and third also win a small amount, and it is traditional for the person who picks the horse that comes last to get a token reward as well.
While it is not as long as the 1000km Mongol Derby, the Cup is one of the longest and richest thoroughbred races in the world.
It has spawned wonderful stories, such as the three horses that defied their 100/1 odds to pull off stunning wins. The unexpected often happens in the Cup. In 1972, jockey John Letts, who had never ridden at Flemington, rode Piping Lane, a horse he had never seen before, to victory.
For all its history and status, the race has a strong egalitarian touch too. While most of racing’s royalty arrive in limousines or helicopters, there was a wonderful departure from tradition in 2006. The Japanese owners of winning horse Delta Blues sent their gold trophy back to their hotel in a limousine, but decided instead to catch a packed train from Flemington racecourse to a celebration dinner in the city, much to the delight of those aboard the crowded carriage.
But as a journalist, my favourite Cup story is naturally media-related. Some decades ago, the now-defunct Herald newspaper, an afternoon broadsheet, hatched a magnificent plan to speed the picture of the moment of victory from the racecourse to the newspaper office on Flinders Street, in the heart of the city.
A mini-caravan was turned into a makeshift photo lab and hitched to the back of a powerful car. The photographer was to sprint from the finishing line to where the car was parked with its engine running, jump into the mini-caravan and thump a few times on its metal frame to alert the driver, who would then speed off while the film was being developed en route.
A minute or two after the race finished, a disappointed race patron who had lost his money on the Cup walked past and took out his frustration by pounding on the mini-caravan.
The brilliant logistical plan unravelled swiftly. The driver mistook this for the pre-arranged signal and floored the accelerator - while the photographer was nowhere in sight.