The 2026 Commonwealth Games may not go ahead after Victoria withdrew as host, saying it was not prepared to spend as much as $7bn on “a 12-day sporting event”.
In an announcement labelled by the Commonwealth Games Federation as “hugely disappointing”, the Victorian premier, Daniel Andrews, said the cost of hosting the event had blown out from an earlier estimate of $2.6bn.
Andrews said his government would redirect the money to regional housing and sporting infrastructure.
“The Games will not proceed in Victoria in 2026,” Andrews said.
“We have informed Commonwealth Games authorities of our decision to seek to terminate the contract, and to … not host the games.”
The CGF took aim at the Victorian premier’s justification and said it was only given eight hours’ notice of the announcement.
“Since awarding Victoria the Games, the government has made decisions to include more sports and an additional regional hub, and changed plans for venues, all of which have added considerable expense, often against the advice of the CGF and Commonwealth Games Australia (CGA),” the CGF said in a statement.
“We are disappointed that we were only given eight hours’ notice and that no consideration was given to discussing the situation to jointly find solutions prior to this decision being reached by the government.
“Up until this point, the government had advised that sufficient funding was available to deliver the Victoria 2026 Commonwealth Games.”
Andrews on Tuesday said the decision was made after cost estimates reached $7bn.
“What’s become clear is that the cost of hosting these games in 2026 is not the $2.6bn which was budgeted and allocated,” he said.
“It is in fact at least $6bn and could be as high as $7bn – and I cannot stand here and say to you that I have any confidence that even [the] $7bn number would appropriately and adequately fund these Games.”
The Australian prime minister, Anthony Albanese, told reporters that the decision was “made by the Victorian government” and he would leave details to them.
Asked if the decision was an embarrassment, Albanese noted Australia’s “fine record of hosting events”, citing the upcoming women’s football World Cup and the 2032 Olympics in Brisbane.
Other Australian states have ruled out hosting the Games.
The Commonwealth Games Australia’s chief executive, Craig Phillips, said the first he had heard of the new cost estimates were early on Tuesday morning.
“The stated costs overrun, in our opinion, are a gross exaggeration and not reflective of the operational costs presented to the Victoria 2026 Organising Committee board as recently as June,” he said.
In 2022 the state government announced that the Games would be hosted across regional Victorian centres, including Ballarat, Bendigo and Shepparton, after reports the CGF had been struggling to find a location.
On Tuesday, Andrews said the government looked at the cost of moving the Games to state capital, Melbourne, but added that it would have cost more than $4bn to do so.
He said the funds allocated for the Games would instead be used to build permanent sporting facilities that it had promised communities, including a proposed upgrade to Ballarat’s stadium, along with “social and affordable” housing across regional Victoria.
“That is a much better way to go forward and we are simply not going to invest that sort of money and have to take it from key service delivery, from other parts of government, in order to deliver a 12-day sporting event,” he said.
Andrews said the government has had an “amicable” and “productive” conversation with the Games authorities in London, and they have been informed of the cost issues.
He said any costs associated with cancelling the Games was the subject of negotiations with the governing body.
Durban, in South Africa, was stripped of the right to stage the 2022 Games due to financial issues and was replaced by Birmingham, which was originally scheduled to host them in 2026, leaving a vacancy.
The Victorian opposition leader, John Pesutto, called the cancellation a “massive humiliation”.
“This decision is a betrayal of regional Victoria and confirms that Victoria is broke and Labor simply cannot manage major projects without huge cost blowouts,” Pesutto said.
“The cancellation of the Commonwealth Games is hugely damaging to Victoria’s reputation as a global events leader.”
The Victorian Greens accused the Labor government wasting “too much time and money” on the Games that could have been invested in public and affordable housing.
In May the Albanese government’s budget included more than $1bn – from its $3.4bn commitment – for the 2032 Brisbane Olympic Games. But nothing was allocated for the 2026 Commonwealth Games.
On Tuesday Andrews said federal funding had “absolutely nothing” to do with the cancellation.
