Victorian Commonwealth Games withdrawal costs almost $600 Million

THE decision to not proceed with the 2026 Commonwealth Games has incurred costs of almost $600 million for Victorians, a new report by the Victorian Auditor-General’s Office has revealed.

Released in March, this analysis delved into the planning and eventual cancellation of the event, highlighting the involvement of key state departments and agencies, such as the Department of Jobs, Skills, Industry and Regions (DJSIR), the Department of Premier and Cabinet (DPC), and the Department of Treasury and Finance (DTF).

The state government announcement in April 2022 the games would be hosted across the regional hubs of Geelong, Bendigo, Ballarat, and Gippsland promising to showcase these areas on the global stage.

Plans included the construction of a new athletes’ village in Geelong, hosting nine sports events, and holding the Closing Ceremony at Kardinia Park. Additionally, $292 million was earmarked for purpose-built sporting infrastructure in Waurn Ponds and Armstrong Creek, which was to be converted into community infrastructure post-games.

Among these plans, Armstrong Creek was set to receive three Olympic-sized swimming pools, with two planned for relocation after the games.

Premier Jacinta Allan, who was the Minister for Commonwealth Games Delivery at the time, championed the games as a significant boon for the region.

“Tens of thousands of people will come to Geelong for Victoria 2026, and we’re investing in the world-class housing and sporting infrastructure that will benefit not only Games delivery but the community for years to come,” she said at the time.

“What a win for Torquay to see a new Commonwealth sport get underway at one of the world’s finest beaches, as a centrepiece of our regional Games.”

But by July 2023, internal government forecasts suggested a surge in expenses from $2.6 billion to $7 billion, prompting the re-evaluation and ultimately the cancellation of the event.

Nationals leader Peter Walsh, said regional Victorians were let down.

“The report has found Labor knew the Games were in deep strife before the last election, but it shamelessly misled all Victorians.

“Victorians will pay almost $600 million for nothing but thin air. Labor can’t manage money and regional Victorians are paying the price.”

The report questioned the government’s estimate, suggesting a more accurate cost projection was closer to $4.9 billion.

The report also criticised the lack of effective collaboration and direct advice from the involved agencies, indicating this as a significant factor in the financial loss.

It highlighted that the DJSIR’s business case, while outlining financial and logistical risks, underestimated costs and overestimated benefits.

The report noted the absence of crucial advice to delay the hosting decision until a more precise business case could be developed.

Throughout 2022 and into early 2023, as costs escalated, DPC and DTF voiced concerns about the feasibility of hosting the Games but did not recommend cancellation until June 2023.

In response, the Auditor-General made two principal recommendations to enhance the public sector’s advisory capacity.

These recommendations emphasised the need for a comprehensive review to identify why the provided advice failed to meet the Public Administration Act 2004 standards and suggested updates to guidance documents for clearer, more effective advice in the future.

While one recommendation was partially accepted, focusing on the detailed analysis and updating of key guidance documents, the suggestion for a collaborative review with the Victorian Public Sector Commission to address advisory approaches and behavioural changes was not accepted.

No host city has been found for the 2026 games.