Newcastle council and the NSW government are at loggerheads over Supercars, and the city's state Labor MP is backing the council.
Jobs and Tourism Minister John Graham emphasised the Labor government's support for the Newcastle 500 race weekend in a media statement issued hours before the council was due to hold its monthly meeting on Tuesday night.
He said the government and Supercars had agreed on a one-year extension to race in Newcastle in 2024 and were working on a five-year deal.
"The future of the event now sits firmly in the hands of the Newcastle City Council," his statement said.
The council hit back on Tuesday afternoon, telling the Newcastle Herald that the government would have to pay for its own round of community consultation if it wanted elected councillors to consider approving the race's return.
The Newcastle Herald reported on Tuesday that City of Newcastle's administration did not support a one-year extension after completing "extensive" consultation based on a new five-year deal.
The council doubled down on this position on Tuesday.
"City of Newcastle has taken the time and expense of doing significant community engagement based on the contract terms and a five-year extension," a council spokesperson said.
"If the NSW government wishes to change the agreement with Supercars to a one-year arrangement, then the NSW government will need to fund and undertake community consultation on that proposal prior to it being considered by the elected council.
"Once a proposal for a one-year event has undergone community consultation, the elected council can consider a report on the matter.
"Until that time there is no proposal that is in line with the current contract and consultation.
"We note that the NSW Member for Newcastle has publicly reaffirmed his opposition to the extension of the race for both one or five years."
Newcastle MP Tim Crakanthorp wrote on Facebook on Tuesday that "I do not support the event returning to Newcastle".
"I have been guided by the community consultation, in which a majority of my constituents were opposed to the event," he said.
"I will update the community once Council have made their decision."
The elected council's previously supportive Labor majority has not publicly backed the race since the results of the community consultation were published last month.
Destination NSW's agreement with Supercars to stage the race in Newcastle next year requires councillors' approval.
The council's stipulation that the government conduct another round of consultation appears to have killed off the event for next year at least.
Mr Graham's statement said the government had provided funding to host the race in Newcastle in 2024.
"We have the support of Supercars for that one-year extension before a longer plan is finalised," the statement said.
"The Government is working towards a five-year deal with Supercars and will work with the landowner City of Newcastle Council to find a way forward."
The statement said the government had discovered this year that the former Coalition government had made "massive cuts" to a Destination NSW fund set aside for major events and tourism.
"This has had a significant impact on available funding and is why one-year extensions have been agreed for several events, providing immediate certainty to organisers, staff and fans before longer deals can be finalised."
The minister's media release said the race delivered significant benefits to the Newcastle economy by stimulating businesses, creating jobs and attracting visitors.
The council surveyed the community's appetite for a new five-year race contract after its initial five-year deal with Supercars expired this year.
Acting council chief executive David Clarke wrote to councillors late last week saying the one-year race extension was "inconsistent" with the consultation.
Council staff did not include any matters relating to Supercars on the agenda for Tuesday night's meeting.
Unless an extraordinary meeting is called, councillors' next opportunity to vote on any race extension will be in late October, three weeks after Supercars has said it will announce its 2024 schedule.
A KPMG report on the consultation found 37 per cent of online survey respondents and 55 per cent of phone survey respondents wanted the race to return.
Mr Graham said the government had prioritised retaining "iconic" major events such as the National Rugby League grand final, Mardi Gras, Newcastle 500 and Sydney Festival.
"These events and others are currently going ahead with one-year extensions while we work through the budget black hole we inherited," he said.
"The NSW government is committed to finding solutions for our major events that generate economic and social value, delivering community and legacy benefits to our state, and we look forward to a resolution for the Newcastle 500."
