As the Olympics begin to wind up, and countries reflect on their performance, the inevitable calls for reviewing funding arrangements are beginning to pour in.

So far, these calls in New Zealand have been muted, mainly because we have done well – with the added bonus of winning more gold medals than Australia for much of the games. In Australia, such calls have not been so circumspect. Indeed, the Australian public have been baying for blood, saying Team Australia’s performance is unacceptable and that athletes do not appear appropriately chastened by their performance.

However, the issue is much more than of just disappointment. Australian taxpayers invest heavily in their athletes – about $324 million for the 2012 Olympic Games alone (not including long-term investments, capital costs, and direct fundraising). Such taxpayer investment – approximately $54 million per gold medal at the time of writing – is incomparable to that in New Zealand. The return on this investment for Australian taxpayers this year has been considerably less than what they expected.

In 1976, Australia came home from the Olympics with no gold medals, a national disgrace (New Zealand won two). As a result, the Australian Institute of Sport (AIS) was established with massive government funding and the specific purpose of winning medals. The AIS was deliberately set up as a ‘Leipzig-type Institute’ – the East German sports institute of the day that had seen glorious people’s victories at the Olympics.

Until the 2012 Olympics, the concept seemed to have worked for Australia; in fact, from time to time, there have been calls in New Zealand to set up a similar institute.

However, the moral basis for the AIS is now being questioned, particularly about why Olympians and the Olympics need or deserve so much money. In 2009, The Future of Sport in Australia report argued if government was funding sport, it should divert funds away from Olympic athletes and to sports most people actually play and watch – Australian football and cricket. The report argued that fairness justified public funding for grassroots punters rather than elite performers.

New Zealand’s sports funding approach has been more prudent than Australia’s over the past 30 years. This is perhaps a recognition that although many athletes would not make it to the Olympics without funding grants, there is something morally squeamish about lavishing cash on elite athletic pursuits when there are plenty of other worthy demands for government funding.