Community sport and recreation facilities play a vital role in the Victorian community. Developing a new
facility or redeveloping an existing facility has the potential to increase overall participation in physical activity
within a community; an especially desirable outcome considering that only half of all Victorians regularly
participate (at least 3 times a week) in any kind of physical activity.(1)
Increased physical activity has obvious benefits to sports and recreation facility users, but providing these
amenities also extends benefits to the wider society, encompassing people who do not directly use these
facilities. Such benefits include increased physical and mental activity; improved general wellbeing of
residents; creation of employment; reduction of health and absenteeism costs to government and employers
(and therefore more efficient use of these funds elsewhere); increased social cohesion and community
development; and several environmental benefits. These are further described in Figure 1.
Not surprisingly, all levels of government, Federal, State or local, place heavy emphasis on funding these
facilities. However whilst the society-wide benefits have been widely documented in a qualitative sense,
there is little information to quantify them. A recent study for Sport and Recreation Victoria (2) investigated
benefits spanning the categories of health and wellbeing, social, economic and environmental, and developed
a model which allows them to be quantified for sport and recreation facilities. The study team developed a
framework comprising two analytical tools to measure the contributions of community sport and recreation
facilities to Victoria:
• A Cost Benefit Assessment (CBA) tool; and
• Economic Impact Assessments tool (EIA).
This framework improves Councils' and the State Government's ability to plan for and support continued
investments in sport and recreation facilities across the state.
The society wide benefits that were investigated
can be categorised into user and non-user benefits as follows:
When monetising these user and non-user benefits it is imperative to bear in mind that these facilities are
of a ‘public good' nature. That is, the services are non-excludable (people cannot be excluded from using
these facilities) and ‘non-rival' (use of a facility by one individual does not diminish its value for others).
Therefore, market prices do not exist to establish the value of community sport and recreation facilities.
Consequently, the study used widely accepted measurement techniques in the Cost Benefit Assessment arena
to monetise the identified benefits; including the Travel Cost Method, and the Hedonic Pricing Method.
Does the Investment Pay off?
Figure 2 illustrates the value of grants (costs) in comparison to society wide benefits as assessed by the model,
for three separate case study facilities funded by Sport and Recreation Victoria (SRV). In each instance the
benefits well outweigh the value of the grants provided by SRV.
According to the information provided by Sport and Recreation Victoria (SRV), approximately $80 million in
funds was distributed under the Community Facilities Funding Program between 2006/07 and 2009/10.
Building on the findings from the case study facilities, a conservative estimate suggests that this expenditure
resulted in a total societal benefit of $400 million. In a sense the true worth of these project grants are well
beyond this value: while the analysis only looked at the SRV share of funding for facilities, SRV grants often
provide the seed funding necessary for projects to actually go ahead.
Economic Implications of Providing Facilities The operation and construction of community sport and recreation
facilities induces economic activity, in the form of output, value-added and employment, which is measured
using an economic impact assessment (EIA). An EIA traces how expenditure during operation and/ or
construction of these facilities translates to increased economic activity in the wider economy.
Using this form of analysis, the study estimated the Victoria-wide economic impacts of the sporting industry;
showing that the sporting sector 3 contributed $8.2 billion to the Victorian economy and supported over
48,000 jobs in 2006 (see figure 3).
1. Victoria ranks second lowest amongst Australian states in terms of participation in regular exercise.
2. A study carried out by SGS Economics and Planning Pty Ltd and HM Leisure Planning Pty Ltd for
Sport and Recreation Victoria (SRV)
3. For the purpose of this economic assessment the sporting sector is defined as those jobs falling within
ABS's ANZSIC categories of 9312 Sports Grounds and Facilities, nec and 9319 Sports and Services to
Sports, nec. This does not include retailing of sporting related goods and hence it could be argued that it
is a conservative measure of the economic contribution.