Grand Prix bill hits $50m for Australia taxpayers

The Victorian government has defended the $50 million cost to taxpayers of staging the Australian Formula One Grand Prix.

An independent economic impact report has found that overall, the 2011 Grand Prix increased Victoria's gross state product by between $32 million and $39 million.

However, the government subsidized the event by more than $50 million.

Tourism and Major Events Minister Louise Asher said despite what is an overall loss to the state, there are other benefits from the event which need to be taken into account.

"You have to look at the whole year, at ongoing branding of Melbourne," Ms Asher told reporters today.

The Grand Prix has been held at Melbourne's Albert Park since 1996 and the current contract runs until 2015.

Ms Asher said new negotiations on the Grand Prix contract will begin in 2014 and she anticipates getting a better deal from Formula One supremo Bernie Ecclestone, to whom the license fee is paid.

"The contracts under which the Grand Prix is run were signed by the previous Labor government," Ms Asher said.