The scrapped 2026 Commonwealth Games have cost Victoria more than $589m, the state’s auditor general says, in a report that calls the project a “waste of taxpayer money” with “no discernible benefit”.
The scathing report investigated the Victorian government’s shock cancellation of Games last year and found the cited $6.9bn cost blowout was “overstated”.
The report said the waste of taxpayer money could have been avoided if government agencies had worked together to give “frank and full advice” to the government before it decided to host the games.
The report, tabled in parliament on Wednesday, was also critical of the business case for the event, prepared by the Department of Jobs, Skills, Industry and Regions (DJSIR), saying it was inadequate to support an informed decision on the costs and benefits of hosting.
Pressed about the finding that the cost blowout was overstated, premier Jacinta Allan pointed to the response of the Department of Premier and Cabinet (DPC) and the Department of Treasury and Finance (DTF) who disagreed with the auditor general’s finding and said no party could provide an “accurate total cost” due to ongoing risks.
“The $6.9bn figure was the upper estimate of the costs that they anticipated would be needed to deliver the game,” Allan said.
“Today confirms that the government made the right decision to not proceed with a 12-day sporting event because the costs were far exceeding any benefit.”
Allan said she would speak to the secretary of the DPC about issues and recommendations outlined in the report.
The auditor general said the cost of the cancellation, due to be held across five regional locations, was considerable given Victoria’s rising debt levels.
“This waste of taxpayer money on an event that will not happen is significant,” the report said.
Opposition spokesperson for tourism, sports and events, Sam Groth, said the report showed the Commonwealth Games were a “cruel hoax to win votes in regional Victoria.”
In July 2023, the then Andrews government announced the shock cancellation of the games, citing cost overruns from the initial estimate of $2.6bn to between $6bn and $7bn.
But the auditor general’s report found that “the cost estimate for the Games that the government publicly released in August 2023 of $6.9bn was overstated and not transparent”.
“It added significant amounts for industrial relations and cost escalation risks. But it did not disclose that the budget already included $1bn in contingency allowances to cover these and other cost risks,” the report said.
“After the government decided to withdraw from hosting, DPC quickly settled the state’s liabilities.”
Previously the government revealed it agreed to pay Commonwealth Games bodies $380m in compensation, with the former premier Daniel Andrews describing it as the “best outcome” the state could get.
The report added that amount to other expenditure by Victoria, including $112m for employee and operating costs, $38m for the organising committee and $42m for detailed planning of the venues and villages.
The auditor general found the government relied on the DJSIR business case when it decided to host the games and determine its budget. The business case raised the risks associated with hosting the games but it underestimated the costs and overstated the benefits.
The report concluded the DJSIR, the DPC and DTF “knew this but did not advise government to delay a decision on hosting until a fit-for-purpose business case could be provided”.
It concluded DPC and DTF had raised costs and other risks during 2022 and early 2023 but did not advise the government that hosting the major sporting event might be unfeasible until June 2023.
“It added significant amounts for industrial relations and cost escalation risks,” the report said. “But it did not disclose that the budget already included $1 billion in contingency allowances to cover these and other cost risks.”
The DJSIR secretary, Tim Ada, said his department worked diligently to compile the business case but acknowledged that with more time and the ability to consult more widely it could have included more detailed cost estimates.
The auditor general recommended the DPC and DTF review issues with advice to government identified in the report and further support the public service to provide “frank, full and timely advice” to the government.
