Fun4Kids faces axe after cost blow-out

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Opinion – Carol Altmann

The 2014 Fun4Kids festival is expected to show a record loss of up to $600,000, prompting a recommendation from Warrnambool City Council staff that it be axed in 2015.

Bluestone believes that the figures – due to be released by the council early next month – will confirm that the cost to ratepayers to subsidise the annual, eight-day festival has quadrupled in less than 10 years.

As a result, it is understood that council staff have taken a 360-degree turn from last December, when it was recommended the 14-year-old festival be funded for another three years at a cost of up to $450,000 a year, to recommending it be closed.

The total subsidy for the festival since it started in 1999 is now in excess of $6 million with, as some councillors have argued, not a lot to show for it.

As it happens, in anticipation of the 2014 figures being released, I had already spent some time crunching the numbers from Fun4Kids in 2005 – which was a good year – compared to 2013, and this is how they stacked up:

[box]Total cost of the event:

 2005: $672,223

 2013: $1,082,070 (up 60%)

Total revenue from the event:

 2005: $523,115

 2013: $614, 242 (up 17%)

Council subsidy for the event:

 2005: $156,354

 2013: $467,827 (almost tripled)[/box]

As you can see, even before the release of the 2014 figures, the public subsidy for the event has almost tripled and is about to get a whole lot worse.



Before I am accused of attacking an event that is designed for kids, it is worth remembering the Warrnambool City Council’s own aims when Fun4Kids first started in 1999.

At that time, the idea was for the festival to break-even or be “cost neutral” within a few years.

By 2003 – four years on – the council was told by external consultants that this was still unrealistic and that, “for the next few years at least”, it would need to spend around $100,000 a year on helping Fun4Kids to meet its expenses.

Any thoughts of even trying to break even have since been forgotten and, each year, the event has become much more expensive to run.

This might not be such an issue if Fun4Kids was drawing record crowds, but less people are showing up.

In 2005, attendances were at 32,112. By 2009, this had fallen to 24,349 and by 2013, it was down to 22,217 people, or a third less than the 2005 numbers.

It appears the numbers for 2014 will be even worse, despite ticket giveaways and drastically reduced ticket prices for locals in the final days of the event.


One of the biggest costs has been in paying performers, as the festival has sought to attract more high-profile artists: the performance costs were $69,970 in 2005 and $220,000 in 2013. Talent does not come cheap.

When I asked the council last week about the rising cost of running the event, its spokesman replied:

“The increase in the cost of Fun4Kids from 2005 is largely explained through a changed accounting methodology which included the cost of staff salaries (the time commitment of events staff into the project) and inflation.”

But internal council staffing costs of around $82,000 were included in the 2005 total and inflation has been low for the past decade: around 3 per cent.

On any measure, Fun4Kids cannot be deemed a financial success for the council, but it has previously justified its subsidy on the wider spin-offs for the city, and there is no doubt tourism operators and a few local businesses see Fun4Kids as a boost in what can be quiet months of the year.

Again, however, the wider spin-offs for Warrnambool have not grown in step with the rising cost.

justice crew

According to the 2005 figures, the wider economic benefit from Fun4Kids was estimated at around $4.5 million. By 2013, this had not grown, but fallen to $3.69 million.

The more direct economic impact (using a different formula, based on actual spending), was set at $1.51 million in 2005 and had climbed to $1.94 million in 2013, which is a slight, but not significant, improvement after eight years.

Of course there are lots of immeasurables around an event such as Fun4Kids, including providing a fun event for young families, and encouraging those tourists who do attend to visit Warrnambool again.

The event has also been recognised in the past with tourism awards and, no doubt, adds to the number of “things to do” in Warrnambool during the off-season.

But it was never set up to be a loss-making exercise and I wondered when it was decided to reposition Fun4Kids from becoming “cost neutral” to heavily subsidised.

I emailed this question to the council’s media and communications manager to see if he could flush out the history.

“Council makes a decision annually on the festival, including decisions relating to its budget,” was the reply.

While the subsidies are not quite on the scale of a Melbourne Formula One Grand Prix, the question needs to be asked as to what a regional council is doing in the business of commercial event management, especially when the event is losing its lustre?

And would any other publicly funded event in Warrnambool, such as Wunta, be given as much financial leeway as Fun4Kids before it was reigned in?

Irrespective of your attitude about Fun4Kids, I believe these are legitimate questions to ask of those in charge of spending your money and more people, no doubt, will be asking the same questions when the 2014 losses officially come to light.

[box] Sources used for this piece include: WCC agenda 10.5.05; Auditor-General Victoria report, Results of Special Reviews and other Investigations, May 2005; WCC Budget 2004-05; Fun4Kids Service Review, WCC minutes 9 Dec, 2013.[/box]


10 thoughts on “Fun4Kids faces axe after cost blow-out”

  1. At the risk of sounding like the opening line of a joke, there are three people looking at the same situation, an accountant, an economist and a pragmatist. Let’s say they’re looking at Fun 4 Kids. The accountant says, it’s running at a loss and losing money year on year. The economist says it’s an investment in local support services and puts the town on the map, the overall benefit is significant and positive. The pragmatist acknowledges that his companions are both correct but suggests that there is no need to re-form the Beatles or put the event on the world stage but that with some judicious management, a snip here and a snip there it could be profitable, workable and most of all enjoyable.

    I’d be happy to see the event get back to ‘grass roots’ without the need to have every thing that opens and shuts. The kids it’s aimed at would be more than happy with Bruce Anson in a Peppa Pig costume and some playdough.

    Re-examine the concept and don’t throw the baby out with the bathwater. Fun 4 Kids is a good event with a lot to offer but for heaven’s sake keep it simple! (and cheaper).

    1. Mick, the point appears to be that those running the show have had ample time to fix it. The ratepayers of this town appear to have had enough of subsiding failed council initiatives.

      1. Local government is about getting rubbish collected, keeping streets clean and the grass mowed in the parks. It isn’t about entrepreneurial flim flam. I am in heated agreement with you that enough is enough but they didn’t cancel the AFL Grand Final when Angry Anderson drove around Waverly Park in the Batmobile (who in heaven’s name thought that was a good idea!) they got someone with expertise, gave them a brief and a budget and moved on. Fun 4 Kids (and some other “initiatives”) might have lost their way but the concept deserves to be given an opportunity to survive before the accountant gets his way.

        It’s not about the money – as Martin DeStasio said “It’s about the vibe.”

    2. Mick
      Congratulations you have said basically word for word of what I was thinking…
      I would say!! why Justice Crew? When you could have a local theatre group dressed up as B1 & B2, or you could have a local dance company or the local kids band that would probably do with the advertising or even a few parents running around as clowns… you know where I am going with this.
      Most kids are very happy with just simplicity. Hey let the kids dunk themselves in a tub of water… who knows they might like it. (under the water safety banner of corse 🙂 They also may learn while having some fun.

      It won’t matter what it is the kids will still have fun at little to no cost…

  2. I find this bittersweet. I understand the facts and logic, and agree that it can’t keep being a burden to our city financially. But as a business owner we definitely see a significant increase in business, particularly at a time that would not be a peak tourism time. Also, as a parent, my kids enjoy it and it is nice to have something special to occupy them for the first week of the holidays.
    It really is a shame, but it is a huge chunk of ratepayers money and it is not good business to let it keep haemorrhaging.

  3. This year was our first Fun4kids (we live in Melbourne, but mum is a local). Dunk (who’s 4) loved it! But it was too big, we couldn’t do everything in one day, and the things we did want to do seemed to be all booked out (like the cooking) or for 6 and up (the sword fighting). We went for Justine Clarke, but in the end he didn’t want to watch (could just as well have been me up on the stage!).
    I think that the idea is good, but you don’t need all of it. Keep the lego (we made space ships), the wooden construction (we made the coolest helicopter), the science stuff (the marble run was excellent and it was all cardboard tubes and sticky tape), some local school bands or dance groups, a face painter or two, a magician, the bowling alley and you have a great day out. We were thinking of going next year…. I hope it is still around, even if in a scaled down version.

  4. So we have an attendance of over 20,000 , mostly from outside the region visiting this festival every year – eating , sleeping , spending a little cash here and there and getting to know all the assets of our wonderful town ? As well as this we are promoting our town with a nationally unique festival focussing on children and identifying Warrnambool as a family friendly holiday location.

    Could it be that these visiting families may also be driving the changing demographics of the town with an influx of younger families taking up residence , buoying up the school attendances and bringing a much needed fresh vitality to the area?

    The alleged 5 year turnover of patrons sounds like another positive aspect and how many of these visitors return at other times of the year to explore our region?

    All sounds like compelling reasons to retain this event to me…………

    Looks like a bit of tinkering with overheads may set the balance right whilst keeping it simple and true to its origins. Improving marketting could also dramatically improve yearly attendance rates!

  5. Big is not always better, go back to what it was like when Fun for Kids first started. Why does it need to have expensive performers? this is not what it started with. As business owners we have found that it brings more business to us in what was a very quiet school holiday time.

  6. In my travels today around the town, I asked a variety of locals for an opinion on this festival. Most think it is good, but question the cost.

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