The fine print on the agreement to stage the 2032 Olympics in Brisbane does not contemplate the host city wanting to pull out.
The shock cancellation of the Commonwealth Games by Victoria this week – citing massive cost overruns and the need to prioritise social services – has prompted renewed scrutiny of Brisbane’s commitment to host the Olympic Games in nine years.
Amy MacMahon, the state Greens MP for the electorate that will host the opening and closing ceremonies, said this week the government should reconsider the event.
But there is simply no get-out clause for an Olympic host, even in the case of major cost blowouts or a deadly pandemic. Under the terms of the host city contract principles, the International Olympic Committee can withdraw the games in certain extreme circumstances. For the organisers, it’s Brisbane or bust.
The ever-parochial Queensland premier, Annastacia Palaszczuk, this week repeated assurances the state had “done our sums” and could keep total Olympics spending – forecast at about $11.5bn – on budget.
History would suggest otherwise. A landmark 2020 Oxford University study says that every Olympics host since 1960 has blown its initial estimates. The average spend is about 2.5 times the budget (coincidentally, or not, this is roughly the same scale of overrun that caused Victoria to cancel the Commonwealth Games).
“When scope and costs begin to escalate – as they have for every [Olympic] Games on record – hosts generally do not have the option of walking away, as they do with most other investments, even should they think this would be the best course of action,” the study says.
“Lock-in is near-absolute and hosts are forced to throw good money after bad.”
‘No one else was bidding’
Brisbane won the right to host the 2032 Olympics under the IOC’s “new norm” – a series of reforms designed to make hosting the games more financially sustainable.
The bid process, which had previously encouraged lavish competing promises, was overhauled and the IOC even suggested potential hosts hold referendums to avoid cities seeking to drop out.
Brisbane – championed by the IOC vice-president John Coates – was shepherded through a less-competitive process before being formally selected in 2021.
Andrew Zimbalist, a sports economist who wrote Circus Maximus, a groundbreaking study of the economics of hosting the Olympics and the football World Cup, said he thought Brisbane was “a sucker” that was awarded the games “when no one else was bidding”.
“The IOC didn’t want to go into a bidding process because they didn’t think anyone would bid,” he said.
The Queensland and federal governments are spending $7bn on new venues and upgrades; in addition the bid documents estimate an administration budget of about $4.5bn, which organisers claim would be “cost neutral” due to projected revenues.
“It’s very common for the prospective hosts of an Olympic games to say that … revenues will cover the costs, so the taxpayer doesn’t have to worry,” Zimbalist says.
“All organising committees say that; they all say they’re going to be using existing venues.
“We should be thinking much more radically in terms of resources that are unnecessary. Queensland has to ask those questions very seriously.”
The ‘Airbnb effect’
Tom Heenan, a sports studies lecturer from Monash University and an expert on the Olympic Games, says legacies from events are often oversold to justify the extraordinary cost.
He says Sydney “plateaued” after the 2000 Games and that there was no prolonged tourism impact, which had been sold as a major economic benefit.
“What you really get out of mega-events is gentrification,” Heenan says. “It’s a way capital can flow into the city, where you get the ‘Airbnb effect’ [which increases property prices].”
The short-term accommodation giant Airbnb has signed on as a major sponsor of the IOC. At the same time its users are being targeted – via increased land taxes – by Brisbane city authorities, attempting to address record low vacancy rates for long-term rentals.
The Greens hold council, state and federal seats covering the Gabba stadium, which will be redeveloped to host the opening and closing ceremonies, and athletics events, in 2032.
MacMahon was quick to jump on Andrews’ statements when Victoria pulled out of the Commonwealth Games.
“What we’re seeing is an acknowledgment … that these mega-events cost taxpayers far, far more than the government budgets for, without the promised benefits,” MacMahon said.
“This is an acknowledgment that events like the Commonwealth and Olympic Games come at a huge cost to housing, public services, schools and hospitals – a cost that burdens cities and states for decades after.”
Concern about potential cost blowouts has created an unlikely alliance between the leftwing Greens and smaller rightwing parties in Queensland’s parliament, including One Nation and Katter’s Australia party.
In ruling out Queensland stepping in to host the 2026 Commonwealth Games, which it did in 2018, on the Gold Coast, Palaszczuk said: “Any extra money, we have to put into issues like social housing.”
The Brisbane Olympics, she said, remains “full steam ahead”.
“Being an Olympic city and an Olympic state will be the biggest single catalyst for change this century.”
‘A big, fat black swan’
Experts say planning the Olympic Games is like playing host to an earthquake.
The 2020 Oxford University study sought to explain why every Games since 1960 had blown its budget. They compared costs of hosting to “deep disasters” like earthquakes, tsunamis, pandemics and wars – events where variables were potentially extreme and unable to be controlled. The study said the Olympics had the highest cost overrun of any type of major project and recommended cities not bid in the first place.
Unveiling the Olympic rings in Brisbane this week, the 2032 Games chief executive, Cindy Hook, said: “I’m confident that we are going to work hard to maximise our commercial success and then live within our means to deliver a balanced budget.
“We have a long runway and more time than [Victoria] did to plan. That time, if used well, will be very much to our advantage.”
The Oxford study said the opposite: that long lead-times only increase the likelihood of unforeseen variables.
Costs for redeveloping the Gabba have already blown out by 170% compared to early estimates, partly due to increased construction costs.
“Time is like a window,” the study says.
“The longer the duration, the larger the window, and the greater the risk of a big, fat black swan flying through it, which tends to happen for the Olympics.”
