Victorian Taxpayers to Pay Malaysia $200 Million to Host Commonwealth Games

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

Victorian taxpayers are set to pay Malaysia a $200 million (US$132 million) lifeline to salvage the Commonwealth Games.

Malaysia is in the lead to host the 2026 Commonwealth Games after receiving a significant offer of $194 million from the Commonwealth Games Federation (CGF) to host the games.

The CGF offer would use Victoria’s $380 million in compensation to Commonwealth Games bodies after the state withdrew as host last year due to the event’s cost estimates tripling to $7 billion.

The Olympic Council of Malaysia (OCM) has confirmed its offer to step in as the host of the next Games, which could be postponed until 2027.

OCM president Mohamad Zakaria said Malaysia received the CGF’s “formal offer” last month following talks between the two bodies as Victoria scrambled to find an alternative host city.

“The offer includes significant financial investment of £100 million (AU$194 million) to support the local delivery and legacy planning of the 2026 edition,” he noted.

Mr. Zakaria said the funding would allow for “minimal government spending” in the nation while bringing “significant socio-economic benefits to the country.”

He urged his government to accept the offer.

“Malaysia is of the opinion that the government of Malaysia should consider this once-in-a-lifetime opportunity—and the associated support and financial investment—which will build on the success of Kuala Lumpur 1998 and put Malaysia back onto the world sporting map,” he said.

Malaysia last hosted the Commonwealth Games in Kuala Lumpur in 1998, marking a significant success for the nation, achieving its best-ever finish of fourth place with 10 gold medals.

At that time, Australia topped the medal tally with 198 medals, including 80 golds.

CGF Considers Malaysia Alongside Other Nations

The CGF confirmed that while Malaysia is considered a potential host for the next event, two other countries also showed initial interest in hosting.

The CGF stated it was in “advanced” and “confidential” talks with potential hosts, each of which could receive the promised $194 million financial and strategic support from Victoria’s withdrawal settlement.

“Malaysia has a fantastic track record of delivering sporting events and the 1998 Commonwealth Games in Kuala Lumpur were hugely successful,” a CGF spokesperson said.

“We are encouraged by their early concepts of building on this legacy through the use of many of the same world-class facilities.”

Commonwealth Games Australia CEO Craig Phillips did not comment on the Malaysia offer.

However, he previously expressed Australia’s interest in hosting the 2026 games with support for other nations to host as well.

He mentioned Australia’s potential to co-host last month, citing the upcoming Paris Olympics includes events in Tahiti and the FIFA Women’s World Cup co-hosted by Australia and New Zealand last year.

Taxpayer dollars were also involved in the World Cup, with the Australian government granting $5 million to the Football Federation Australia (FFA) from 2016-17 for the joint bid development with New Zealand Football, known as “As One.”

Premier Dodges Questions

Meanwhile, Victorian Premier Jacinta Allan avoided questions about Malaysia stepping in as host as uncertainty looms following Victoria’s withdrawal in July 2023.

“That’s for the Malaysian government,” she said. “It’s a matter for the Commonwealth Games Federation.”

The premier has previously faced criticism for dodging questions about the bungled budget for the games after the Victorian Liberals accused her of avoiding inquiries on the debacle in parliament last year.

“Too many questions remain unanswered and Victorian taxpayers, who are footing the bill for this humiliating debacle, deserve to know how it all went so wrong,” the opposition said in 2023.

This follows the state’s recent financial update, which revealed that Victoria accumulated an additional $12 billion in debt over the past six months, bringing the total debt to $126.8 billion.

There are concerns that it could nearly double by 2027. However, the state is expected to receive an extra $3.7 billion in GST revenue in 2024-25, providing some relief.

Disappointment as Alternative Proposals Fail to Gain Traction

The CGF expressed “huge disappointment” over the state’s withdrawal last year.

“The reasons given are financial. The numbers quoted to us today of $6 billion are 50 percent more than those advised to the Organising Committee board at its meeting in June,” a CGF spokesperson said last year.

“These figures are attributed to price escalation primarily due to the unique regional delivery model that Victoria chose for these Games, and in particular relate to village and venue builds and transport infrastructure.”

Gold Coast Mayor Tom Tate offered to step in and explore sharing the Games with Perth but couldn’t get enough government support.

Australian business moguls Gerry Harvey, Gina Rinehart, and Katie Page supported the Gold Coast’s proposal for a $700 million “scaled-down” event. Still, the lack of government support led to its downfall.

“We did our best and that’s all people can expect,” Mr. Tate said in a statement.