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Victoria pulls out of hosting 2026 Commonwealth Games

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The Victorian Premier made the announcement this morning citing a huge increase to the expected cost of the event.

Premier Daniel Andrews revealed that the actual cost of hosting the 2026 Commonwealth Games across four hubs in regional Victoria was now projected to be at least $6 billion and possibly up to $7 billion. This is well above the $2.6 billion that the state government had allocated in its budget to fund the hosting costs of the event, including permanent and temporary infrastructure costs and other costs related to organisation and delivery of Commonwealth Games.

“I cannot stand here and say to you that I have any confidence that that even $7 billion number would appropriately and adequately fund these Games,” Andrews told a press conference this morning.

“I think it could be more than that.

“$6 to $7 billion is well and truly too much for a 12-day sporting event. 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.

“In terms of where we go to from here, the Games will not proceed in Victoria in 2026. We have informed Commonwealth Games authorities of our decision to seek to terminate the contract and to not host the Games.”

Andrews said meetings had been taking place in London between the state’s representatives and Commonwealth Games authorities and described the discussions as “productive and cordial”. Meetings are expected to continue later today, Australian time.

The Premier announced that instead of hosting the Games, the state will use most of the funding earmarked the event – over $2 billion – to deliver the expected legacy of the Commonwealth Games, including all of the promised new builds of sporting infrastructure and at least 1,300 new social and affordable homes across regional Victoria.

There will also be various investments made in industries and areas that stand to lose the most from the cancellation of the event in Victoria. There will be a $150 million Regional Tourism and Events Fund as well as support for community sport in regional Victoria as well as funding to boost opportunities for the participation of people with disabilities in sport.

Andrews said it was not a hard choice to make.

“I’ve made a lot of difficult calls, a lot of very difficult decisions in this job – this is not one of them. Frankly $6 to $7 billion for a 12 day sporting event – we are not doing that. That does not represent value for money, that is all cost and no benefit. We will instead deliver all and more of the legacy benefits in housing, in sporting infrastructure, in tourism… that is a much better way to go forward.”

Comments from the Premier suggested progress on delivery of the Games was at a critical juncture where work had been completed to determine actual costs of delivery for the event – as opposed to the estimates on which the original decision to take on hosting rights was based – but major contracts had not been signed.

Andrews said initial estimates had been informed by expertise from external consultants, as well as those who deliver Commonwealth Games. He also highlighted the volatility of the economic climate the estimates were made in.

The event being held in a new decentralised format has played a part in the elevated price tag of the event, but Andrews said even if the Games were move to Melbourne, the total actual cost would still have “a four in front of it.”

“Even if you ran it in a pretty common garden way in Melbourne it still costs well in excess of the 2.6 [billion dollars].

“Under all the different contingencies, it costs more, or the benefit is so dramatically reduced that you just would not push on and deliver something that was nowhere near what we had intended to deliver.”

The organising committee for the Games currently employs around 100 people and Andrews confirmed some of those would lose their jobs, although as many as possible would be shifted to the work involved in realising the legacy benefits promised despite not hosting the event.

“It’ll be a relatively contained number, but [that’s of] no comfort to them and I’m very sorry for that. Beyond that though, wherever we can redeploy people, we will do that.”

CEO of the Victoria 2026 Commonwealth Games Organising Committee, Jeroen Weimar, said it was as his team started getting into the venues and village sites that would have hosted the event over the last few months that the true cost of the Commonwealth Games began to emerge.

“We’re really disappointed that we’ve got to the position where we have a plan which is absolutely deliverable – we can deliver these Games on time and within the scope that was originally agreed but not at the cost that was envisaged at that time.

“We’ve looked at alternative options around what we could do to really significantly reduce those costs. Ultimately, we could not find a way to bring this within a shouting distance of the original budget that was signed off by government,” he said.

“It’s a shock to us all because, ultimately, we are a single purpose organisation, committed to delivering these games. And until the last 24 hours, that’s what our single focus job has been, so it’s a disappointment to us that we can’t find a way through to delivering the hopes and visions that we had for the Games at a cost that is affordable to Victorians.”

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