The 2026 games are currently without a host after Victoria decided to withdraw on July 18, 2023, with the decision highlighting the challenges and complexities involved in hosting large-scale sporting events in the current economic climate.
Then-premier Daniel Andrews cited a cost blowout, saying the state government just could not justify the expense. “Frankly, $6 to $7 billion for a 12-day sporting event, we’re not doing that,” he said in July 2023.
The initial plan for a multi-hub regional model for hosting the event was scrapped after it proved more expensive than traditional models. A 2022 agreement provided for $2.6 billion (US$1.7 billion) to be allocated to host the games’ sporting events in regional Victorian centres, but the plug was pulled when the figure reportedly rose to $6.9 billion.
Pulling out of the games also landed Victoria with a hefty $380 million penalty to be paid to the Commonwealth Games Federation.
In total, abandoning the games cost more than $589 million, according to the Auditor-General’s Office. It revealed agencies entrusted with delivering the games hampered the government’s decision-making by not having “worked together better to give frank and full advice to the government before it decided to host the Games.”
Projections of Cost Blowout Were ‘Overstated’
Aside from the unnecessary expenditure, the report detailed how the initial $2.6 billion figure was “unrealistically low,” but added that the $6.9 billion figure, oftquoted as a defence for pulling out-was overblown.“The cost estimate for the Games that the government publicly released in August 2023 of $6.9 billion was overstated and not transparent,” the report said.
The apparent oversight of a $1 billion allocation earmarked to cover any industrial action or to temper the threat of cost escalation was also noted as a contributing factor in an incorrect figure being used as justification for tanking the games.
The report blamed the Department of Jobs, Skills, Industry and Regions for supplying the state government with an inadequate business case on which to make an informed cost decision.
Reacting to the report’s findings, the CEO of Commonwealth Games Australia, Craig Phillips, said it “confirms the gross exaggeration of costs detailed by the then premier when he made the decision to cancel the 2026 Commonwealth Games.”
“The $6.9 billion figure was the upper estimate of the costs that they anticipated would be needed to deliver the game,” Ms. 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.”
The 2026 event faces the very real possibility of being cancelled for only the second time. The Gold Coast was mooted to take over but formally withdrew.
London Mayor Sadiq Khan floated the idea of London picking up the reigns from Victoria, while Scotland also initially showed interest.
However, on Dec. 4, 2023, the UK government ruled itself out of hosting saying there would be “no UK rescue,” citing reservations around financial returns.
