That's an interesting supposition, Greeneyed, and one which would be valid if it weren't for the fact that money does tend to stay in various locations be they town/city, region, State/Territory or nation unless you have people or goods moving around between them. Basically, these are pretty near to being closed economies. For a location to prosper, it depends on the importation of "foreign" money, whether that's through exports or tourism.greeneyed wrote: ↑April 18, 2019, 3:34 pm To be honest, the incentives for events provided by State and Territory governments are probably a complete waste of taxpayers' money. They shift economic activity from one location to another but they create a deadweight loss on the economy (because it has an efficiency cost - that is, it subsidises location of an economic activity and consumption of the output in a place where it wouldn't have otherwise taken place, and would most efficiently happen elsewhere)...
...The cost benefit studies that government events bodies do aren't really worth the paper they're written on... because they treat the ACT economy as "closed" along the borders of the ACT.
Hence, we do not have a global economy where pockets of poverty are eradicated. Nor do we really have a united national economy. Otherwise, there would be no need for State leaders and others to come to Canberra with their hands out for some GST dough. At the State level, we risk country towns shutting up shop or simply stagnating because the economic opportunities aren't there.
For example, back in 1985, I lived in Goulburn which had a population of about 20,000. In 1986, I moved to Canberra and worked for the Wagga Daily Advertiser. Wagga's population was about 25,000. Wagga has since grown to become NSW's largest inland town with a population of 64,000. Goulburn is at 22,000. Wagga goes out of its way to attract events. Goulburn doesn't. There's other factors at work as well, such as the opening of the Goulburn by-pass in 1986 (IIRC) almost eliminating it as a stop-over point. However, let's face it, they're both towns that people don't go out of their way to visit unless they have sufficient reason and are practically closed regional economies.
Although the ACT has a lot of tourist attractions (and at some point everyone does a school excursion to here) that's only enough to keep the local economy level-pegging from one year to the next. These big, regular events are what bring in extra foreign money and help the economy generate and sustain jobs to keep people here, etc, etc. If the population diminishes, then the tax burden on those left increases or we accept that various local government services are going to have to be curtailed or disapppear. That, incidentally, is why I become white hot under the collar every time the LNP talks about shifting a government agency away from Canberra to some country town where the National's primary vote is on life support.