*Pic: Chas Rader-Shieber, Kathryn Lewek, Julia Lezhneva, stars of Hobart Baroque who have been nominated for three Helpmann Awards • And they were triumphant … Mercury: Stellar award for Baroque performance

When the Tasmanian Premier rejected a request for $800,000 to help stage next year’s Hobart Baroque music festival, the producers were instead offered $300,000 in state funding.

Tasmania, the government said, could not afford more. The head of the Tourism Council, Luke Martin, supported the rejection, saying its ‘numbers just didn’t add up’.

But an analysis of the economic impact of the festival shows not only that the next festival ‒ if it had been allowed to go ahead ‒ would have produced a stimulus of almost $9 million to the state’s economy but also that the government would have got its money back through taxes and charges.

In other words, the government could have got a major festival of ongoing national and international significance for nothing, while permitting a significant economic boost to the state.

The second Hobart Baroque, in March this year, received funding of $400,000 from the state government, took $500,000 from the box office. To this was added about $150,000 from donors, the producers themselves, the Hobart City Council and other sources. All of this money ‒ $1.05 million ‒ was spent on staging the festival.

According to a study by the EMRS company, commissioned by the state government, interstate and local patrons spent almost $2 million during the festival, not including their tickets. So there was an immediate primary injection of money into the economy of more than $3 million.

Much of that was spent on accommodation, food and shopping by interstate and international patrons, directly supporting employment and businesses. Money went into hiring venues such as the Theatre Royal and the Federation Concert Hall, again supporting jobs and businesses. Taxes were paid.

And some money left Tasmania, to pay for imported goods and services and when non-Tasmanian performers took the proportion of fees they hadn’t spent while they were here.

But most of the money remained in the state, to be circulated again, producing another round of stimulus amounting to about $2.4 million, again supporting jobs, businesses and the economy as well as producing tax income ‒ such as payroll tax ‒ for the government.

So, for its $400,000 grant, the state government produced almost $5.5 million in almost-immediate economic stimulus to the state, a return on investment of 13.6 times. This would almost certainly have produced enough income to the state in the form of taxes, charges and payments to government business enterprises to reimburse its $400,000 input.

The 2014 Hobart Baroque came at no cost to the state budget.

For the now-cancelled 2015, 2016 and 2017 festivals, following the projections in the Hobart Baroque funding submission (which I wrote) and the baseline data from the EMRS study, would have produced an economic impact of $8.8 million for a requested $800,000 in 2015, a return on investment of 11.1 times.

In 2016, putting in the requested $1 million would have produced $11.9 million, a return of 11.9 to one. And in 2017, a grant of $1.25 million would have produced $15.9 million, a return of 12.7 to one.

In all of these cases, the government would have been almost certain to get its money back through taxes, charges and government enterprises.

These figures do not attempt to estimate the continuing impact on the economy as the money spent by Hobart Baroque and its patrons continues to circulate and re-circulate.

Nor do they include intangible assets created by the festival, such as a positive contribution to the image of the state as a destination for arts tourism or as a progressive and interesting place. They also do not include the negative intangibles involved with the event’s cancellation, or the effect on Tasmania’s image of personal and aggressive attacks on the well-regarded and well-known artistic director, Leo Schofield, such as those by the Liberal Member for Braddon, Brett Whiteley.

• Download Hobart Baroque economic analysis :

Christine Milne: Economy, Tarkine, Tasmanian Brand, Jacquie Lambie, RET