Australian GP may face funding issue

Tobacco advertising is being banned for both the Australian F1 and MotoGP events after October 1 this year, which means the Melbourne organisers will have to pay compensation to Formula One supremo Bernie Ecclestone and the teams as part of their contract.

The money is designed to make up for the loss of income teams may face in not being able to run lucrative tobacco sponsors.

It was a similar scenario for the Canadian Grand Prix recently, the Montreal event having to pay out after the government banned tobacco advertising there.

There was some hope that the Australian federal government would step in to help the situation, because of the international coverage that the races generated for the country, but this has now been ruled out.

Australian Democrats leader Lyn Allison told the Australian Herald Sun newspaper that federal Sports Minister Rod Kemp was insistent on support for the event coming from state and local governments.

"There are no programs in the sports portfolio to support these events," Senator Kemp wrote in response to a question about support for the Grand Prix.