Melbourne's lord mayor Robert Doyle believes the city should not seek to renew its deal to host the Australian Grand Prix after it expires in 2015.
The future of the race has been in question for several years, amid concerns over the level of state funding it requires and the losses the event has recently made. In a column in today's Herald Sun newspaper, Doyle argued that while the benefits of holding the grand prix since 1996 had been huge, the financial situation was now becoming untenable.
He listed four possibilities for the future: that "F1 supremo Bernie Ecclestone will pick up his bat and ball and go home" and give the date to another nation; that Ecclestone will insist on a night race and the event moves "to a purpose-built track either at Avalon or Noble Park, or possibly elsewhere Sydney or Perth"; that Albert Park is upgraded and continues to host the race; or that Melbourne decides to walk away from F1 - which Doyle reckons could be the best option for the city.
"The big stumbling block ... is the cost to the Victorian taxpayer," Doyle wrote. "In 1996 when the race was a combination of a four-day event and corporate sponsorship was far more generous than it is today, the race still needed to be underwritten by about $1.7 million. Last year it was $50 million.
"Fast forward to 2015, the year the franchise ends. Though the documented benefits for the city may include hundreds of millions of dollars of advertising value, tens of millions of dollars of local revenue, an event that will draw between 250,000 and 300,000 people over three days will come at a cost that will approach 70 million taxpayer dollars.
"It is the old argument: pay up front but get many times the value of the upfront payment in downstream economic benefits. For most events that formula is persuasive. But $70 million?"
He concluded: "The fourth and final possibility must be faced. I know of no city that has voluntarily walked away from a grand prix, but could Melbourne be the first? The final possibility is that we decide that it has been 20 fantastic years, the benefits to the city and the state have been enormous, but the cycle has run its course.
"It would mean we would need to replace the grand prix, and major events don't come cheap. Nor, indeed, are there many out there that can be repeated year after year and drive the economic returns we get from the grand prix. We should start looking now.
"In the end, it will be a government decision and one of the tough ones that [state premier] Ted Baillieu faces in his first term. Does he undo the legacy of Jeff Kennett, his mentor, in his very first term and, ironically, through the same minister to first get the event, Louise Asher? My judgment would be: 'Get ready. Time's up.'"
Doyle also stressed that the decision to bring F1 to Melbourne in 1996 had been hugely beneficial for the city overall.
"That should be remembered as a stroke of genius," he wrote. "Victoria had been the rustbucket state for years. The city was in the doldrums."
In response to Doyle's article, Australian GP chief Ron Walker said the organisation was doing its utmost to minimise the burden on the state.
"Its future is a matter for the government but the Grand Prix Corporation board does its best to keep costs down every year," Walker told the Herald Sun.