Premier defends decision to cancel 2026 Games amid cost blowout and criticism
Victorian Premier Daniel Andrews has faced a barrage of questions and criticism over his decision to cancel the 2026 Commonwealth Games in regional Victoria, citing a massive cost blowout and a poor business case. Andrews has refused to name the individuals or organisations responsible for preparing the flawed documents, saying he is accepting responsibility as the leader of the government.
The business case, released on Saturday after the government reached a $380 million settlement with Commonwealth Games organisers, showed the cost of hosting the Games in regional centres such as Ballarat, Bendigo and Shepparton had soared from an estimated $2.5 billion in April 2022 to almost $7 billion in July 2023. The original business case also revealed an estimated benefit-cost ratio (BCR) of between 0.7 and 1.6, meaning for every dollar invested by the government it would receive a return of between 70 cents and $1.60.
Andrews described the documents on Tuesday as “hardly the greatest piece of work ever done”. “That’s very, very clear because the estimates are a long way from what the costs were going to be,” he told reporters, adding they were being investigated by the state’s auditor general.
Andrews said he had “no idea” if those tasked with putting together the Commonwealth Games business case were working on other government projects. “I’m not giving you the names of people who did the work. That’s not fair at all and there’s no need for me to do that because I’m accepting responsibility as the leader of the government,” he said.
Opposition slams Andrews for wasting taxpayers’ money and reputation
The opposition leader, Matthew Guy, has slammed Andrews for wasting taxpayers’ money and damaging Victoria’s reputation by pulling out of the Commonwealth Games. Guy said Andrews had shown “arrogance” and “incompetence” by signing up to host the event without proper due diligence and then cancelling it at the last minute.
Guy said Andrews should reveal who was behind the flawed business case and whether they were still working for the government. He also questioned why Andrews had not consulted with regional communities or other stakeholders before making his decision.
“This is a premier who thinks he knows best, who thinks he can do whatever he likes, who thinks he can sign contracts and rip them up without any consequences,” Guy said. “He has wasted $380 million of taxpayers’ money, he has damaged our reputation internationally, and he has let down regional Victoria.”
Guy said the opposition would support hosting the Commonwealth Games in Victoria in the future, but only if there was a proper business case and consultation process.
Experts say business case was a red flag that Games bid should never have gone ahead
Marion Terrill, the transport and cities program director at the Grattan Institute, has described the cost-benefit analysis in the business case as an early red flag that the event should not have gone ahead. Terrill told Guardian Australia that any prudent government would focus on the worst-case scenario rather than the best-case scenario when assessing a major project.
“Any prudent government would focus on the worst-case number rather than the best-case number and the worst-case number tells you that this was not worth going ahead with,” Terrill said. “To proceed with a BCR of 0.7 would destroy value.”
Terrill said the business case also failed to account for the opportunity cost of hosting the Commonwealth Games, such as diverting resources from other priorities or crowding out other economic activity. She said there was little evidence that hosting major sporting events delivered long-term benefits for host cities or regions.
“The evidence is pretty clear that these events don’t really generate much in terms of lasting benefits,” she said. “They tend to be very expensive, they tend to have very optimistic forecasts of benefits, and they tend to have very optimistic forecasts of costs.”
The business case was prepared with input from the Department of Jobs, Precincts and Regions, Visit Victoria, the Department of Treasury and Finance and consultants EY, MI Associates and DHW Ludus.
Regional mayors express disappointment and frustration over cancelled Games
The mayors of some of the regional cities that were set to host events for the 2026 Commonwealth Games have expressed their disappointment and frustration over the cancellation of the event. They said they were not consulted or informed by the government before it made its decision, and they questioned whether enough was done to explore alternative options or scenarios.
The mayor of Ballarat, Daniel Moloney, said he was “gutted” by the news and felt like his city had been “robbed” of a once-in-a-lifetime opportunity. He said hosting the Commonwealth Games would have boosted Ballarat’s economy, tourism, infrastructure and community spirit.
“We were really looking forward to showcasing our city to the world,” Moloney said. “We had a lot of plans and ideas for how we could make this a really special event for our community and for the athletes and visitors.”
The mayor of Bendigo, Jennifer Alden, said she was “shocked” and “disappointed” by the decision and felt like it was a “missed opportunity” for regional Victoria. She said hosting the Commonwealth Games would have been a catalyst for investment, development and social inclusion in Bendigo.
“We were really excited about the potential of hosting the Commonwealth Games and what it could mean for our city and our region,” Alden said. “We had a lot of community support and enthusiasm for the event and we were ready to welcome the world to Bendigo.”
The mayor of Shepparton, Kim O’Keeffe, said she was “devastated” and “angry” by the decision and felt like it was a “slap in the face” for regional Victoria. She said hosting the Commonwealth Games would have been a game-changer for Shepparton, creating jobs, growth and pride.
“We were really proud to be part of the Commonwealth Games bid and what it could do for our city and our region,” O’Keeffe said. “We had a lot of confidence and optimism for the event and we were prepared to work hard to make it a success.”
The mayors said they hoped the government would still honour its commitment to invest in regional Victoria and support its recovery from the pandemic.
