Victoria Scraps 2026 Commonwealth Games as Massive Debts Sting

Fireworks erupt over the Alexander Stadium during the closing ceremony for the Commonwealth Games in Birmingham, England, on Aug. 8, 2022. Glyn Kirk/AFP via Getty Images

The Australian state of Victoria has decided to withdraw as host of the 2026 Commonwealth Games as it battles financial problems caused by massive COVID-19 debts and high government expenses.

On July 18, Victorian Premier Daniel Andrews announced that the state would no longer host the 2026 event because of a funding blowout, sparking a fierce response from organisers.

The Games were supposed to be held in regional areas of Victoria from March 17-19, 2026, after the state was awarded the right to host the event in 2022.

Speaking to the press, the premier cited a blowout in cost estimates as the main reason for the surprise decision, saying it would cost over $6 billion (US$4.1 billion) instead of the original estimate of $2.6 billion.

“Last year, when the Commonwealth Games Authorities approached us, needed someone to step in to host the 2026 Commonwealth Games, as a state, we were happy to help out,” he said.

“But, of course, not at any price and only if there was a lasting benefit.

“What’s become clear is that the cost of hosting these Games in 2026 is not the $2.6 billion which was budgeted. It is, in fact, at least $6 billion and could be as high as $7 billion.”

Victorian Premier Daniel Andrews speaks to the media at the Parliament of Victoria in Melbourne, Australia, on May 18, 2023. AAP Image/Joel Carrett

Even so, Mr. Andrews said he had no confidence that the Games could be adequately funded.

The premier also noted that his government had considered moving the Games to Melbourne and reducing the hosting costs by organising fewer sports and having fewer regional hubs.

“Frankly, $6 billion to $7 billion for a 12-day sporting event, we are not doing that–that does not represent value for money. That is all costs and no benefit,” he said.

“I will not take money out of hospitals and schools in order to fund an event that is three times the cost as estimated and budgeted for last year.”

As he announced the cancellation, Mr. Andrews said the state Labor government would still set aside a $2 billion package to ensure regional Victoria would not lose the benefits it would have received by hosting the Games.

The new spending package will include a $1 billion Regional Housing Fund to erect over 1,300 new homes and a $150 million Regional Tourism and Events Fund to help regional areas hold more events to attract tourists.

The Victorian government also said it would proceed with all the permanent new and upgraded sporting infrastructure projects intended for the Games.

The last time Victoria held the Commonwealth Games was in 2006, with the state capital city of Melbourne as the venue.

The Debt-Plagued State

The Victorian government’s decision has sent shockwaves across Australia and the sporting community. However, it is no secret that the state is in bad financial shape.

During the COVID-19 outbreak, the state borrowed $31.5 billion to carry out its pandemic measures, which plunged Melbourne into the world’s longest lockdown.

The massive debt has also forced the state government to introduce a repayment plan in its most recent budget in May to settle the amount owed over the next decade.

The plan specifically targets large businesses and property owners whom the state government argued had made significant profits during the pandemic, sparking fierce criticisms from the public.

Nevertheless, the state has no intention of curbing its expensive infrastructure development.

It was reported in the Sydney Morning Herald that the Victorian government has set aside a “mysterious” $75 billion in funds in the state budget to splurge on infrastructure and government agencies without disclosing to the taxpayers how it would use the money.

Premier of Victoria Daniel Andrews (centre) looks at the construction of the Metro Tunnel in Melbourne, Australia, on June 28, 2021. Asanka Ratnayake/Getty Images

In addition, several major infrastructure projects in Victoria are suffering from significant cost blowouts and delays, adding pressures to the state’s budget, which is predicted to see a net debt of $116.9 billion in 2023 before soaring to $171.4 billion in 2027.

Jeopardising Victoria’s Standing in Business, Sporting Circles: Organisers

Following the announcement, the Commonwealth Games Australia and the Commonwealth Games Federation were scathing of the premier’s reasons.

“The stated costs overrun, in our opinion, are a gross exaggeration and not reflective of the operational costs presented … as recently as June,” said CEO Craig Phillips of Commonwealth Games Australia.

“The Victorian government wilfully ignored recommendations to move events to purpose-built stadia in Melbourne and, in fact, remained wedded to proceeding with expensive temporary venues in regional Victoria,” he said in a statement.

Opposition Leader John Pesutto and Nationals Leader Peter Walsh decried the government’s move, saying it was “a massive humiliation for Victoria.”

“The cancellation of the Commonwealth Games is hugely damaging to Victoria’s reputation as a global events leader,” they said in a joint statement.

Ralph Babet, federal senator for Victoria, said the cancellation highlighted the toxic mismanagement of the Andrews government, noting that the state debt exceeded that of Queensland, New South Wales and Tasmania combined.

“Premier Andrews has broken another election promise. The Victorian people are rightly appalled by the inability of the government to manage the people’s money. Clearly, the government has failed to complete adequate due diligence and costing,” he told The Epoch Times.

“How is it possible that the estimated cost is only roughly a third of the actual cost of the event?

“This is not only embarrassing for the people of Victoria, but for our nation and the Commonwealth as a whole.”

Meanwhile, Prime Minister Anthony Albanese remained diplomatic on the issue, saying the decision to cancel the Games lay with the state government.