Chapter 2Cancellation of the 2026 Commonwealth Games in Victoria
2.1Chapter 2 of this interim report (this chapter) explores the evidence regarding:
the decision to bid for and host the 2026 Commonwealth Games;
the subsequent decision to cancel the Games;
consultation processes and notifications;
compensation; and
impacts on Australia’s international reputation.
The bidding process for the 2026 Commonwealth Games
2017–2020: initial explorations of Australian bids
2.2As noted in Chapter 1, public debate around the prospects for another Commonwealth Games hosted in Victoria began in 2017. In March 2017, the Premier of Victoria said that he would have a ‘close look’ at the 2022 Commonwealth Games after Durban, South Africa lost the hosting rights over issues with progress and deadlines. The Victorian Minister for Sport indicated that, should it be necessary, Victoria had ‘got the infrastructure in place’ to host. The Commonwealth Games Federation (CGF) awarded the event to Birmingham, United Kingdom, on 21 December 2017.
2.3In April 2017, a group of regional cities released their plan for a regional Victoria bid to host the 2030 Commonwealth Games. Mayor of Greater Shepparton, Councillor Dinny Adem reflected on the bid saying that ‘staging a ground-breaking concept such as this across regional cities and towns will leave a legacy for millions of people’ and that ‘the economic and social impact will be so significant’. Mayor Adem further stated the focus would be on upgrading infrastructure over building new facilities, with ‘some temporary infrastructure’ for housing needed.
2.4As of September 2023, hosting rights for the 2030 Commonwealth Games have not been awarded, with the city of Hamilton and the province of Alberta, both in Canada, suspending and withdrawing from the bidding process respectively.
2.5On 31 March 2018, CGF began seeking expressions of interest for the 2026 Games hosting rights. A report from the 2018 CGF General Assembly stated that the 2026 Games were ‘set to be awarded in September 2019.’ On 3 August 2018, it was reported that funding had been secured for a pre-feasibility study for the 2030 Games bid. After the cancellation, it was reported on 20 July 2023 that the pre-feasibility study identified ‘venues, housing, staffing, transport and ticketing issues’, and suggested a shift to 2034.
2.6Other locations in Australia also considered submitting bids for the 2026 Games, or later Games. In April 2018, the West Australian Government commissioned an infrastructure audit to determine what upgrades would be required to host the Games, but does not appear to have progressed to a formal bid. In July 2018, the New South Wales Government advised it would not undertake a 2026 bid.
2.7The South Australian Government suggested it would investigate a bid in June 2018, and the CGF toured venues in Adelaide in September 2018. In September 2019, the South Australian Government announced it had ceased planning a bid, citing estimated costs of $3.5 billion against an economic return of $1.2 billion. Commonwealth Games Australia (CGA) suggested Adelaide reconsider its bid in October 2020, referring to alternative modelling it had commissioned.
2021: Visit Victoria and the Commonwealth Games Federation discuss a bid
2.8Visit Victoria is the Victorian Government agency with responsibility for promoting tourism and events in Victoria, including internationally. After the Games were cancelled, media reports emerged detailing discussions between Visit Victoria and the CGF in late 2021 over an initial bid.
2.9One report characterised a pitch as the Victorian Government’s ‘starting vision’ for the Games. It said that Visit Victoria pitched the event to the CGF in ‘October and November 2021’ with a ‘preliminary cost estimate of $1.3 billion’, which the report noted then doubled to $2.6 billion in 2022. In turn, this figure had more than doubled again to over $6 billion by the date of the cancellation.
2.10Another report reversed the originator of the pitch. It said that ‘Commonwealth Games authorities’ pitched Visit Victoria, rather than the opposite, and provided initial costs of $1.4 billion instead of $1.3 billion.
2.11Ernst and Young (EY) partners advised that the meeting between Visit Victoria and the CGF took place in November 2021. Mr Dean Yates, partner at EY, confirmed that EY’s work on the business case was for a hosting bid in 2026, not 2030 or 2034, and that it was commissioned by the Victorian Government in ‘late 2021’. When presented with the Premier of Victoria’s claim that CGF had asked Victoria to host the Games, and his evidence that Visit Victoria went to the CGF and then engaged EY, Mr Yates confirmed that was ‘stated in the business case’. However, he could not comment whether the Premier of Victoria’s characterisation was incorrect.
2.12Mr Craig Phillips AM, Chief Executive Officer of CGA, provided evidence at the first hearing that his organisation commenced engagement with the Victorian Government in December 2021, through to the formal candidature in March 2022. He did not state whether the ‘Victorian Government’ meant Visit Victoria.
2022: Victoria’s successful bid for the 2026 Commonwealth Games
2.13In January 2022, it was reported that there was an ‘approach’ from the CGF to the Victorian Government over hosting the 2026 Games. The Victorian Government said in response that it wanted to ‘get all the big major events’ to come to Victoria, but did not confirm a bid at that time.
2.14On 16 February 2022, the Victorian Government announced it had entered into negotiations with the CGF and CGA to host the 2026 Games via signing a heads of agreement. In the same announcement it confirmed that any successful bid would be regional in nature.
2.15Victoria was awarded the 2026 Commonwealth Games by unanimous decision on 12 April 2022 by the Commonwealth Games Federation. The decision to host was welcomed in statements from the Victorian Chamber of Commerce and Industry, National Sporting Organisations and National Sporting Organisations for People with Disability including Squash Australia and Paralympics Australia, and local councils such as Latrobe City Council.
April 2022–May 2023: Games progress and updates
2.16From 12 April 2022, the day it formally announced its bid for the Games, to 9 May 2023, two weeks before the 2023-24 Victorian State Budget, the Victorian Government issued at least 30 media releases providing updates, including on infrastructure projects, procurement opportunities and Games management arrangements. This was, on average, a media release approximately every fortnight. The Games also featured in the 2022-23 Victorian State Budget, but not the 2023-24 Victorian State Budget.
2.17A number of these media releases were issued on the same day, or concerned the same project. For example, media releases on the upgrade of the Eureka Stadium in Ballarat were issued on 12 October 2022, 2 April 2023, and 24April 2023, covering preparations for the upgrade, the appointment of the design consultant team, and the release of the Advance Tender Notice for the main works contractor, respectively. Another media release was also issued on 24 April 2023 concerning the opening of a registration of interest process for employment suppliers and group training organisations.
The decision to cancel the 2026 Commonwealth Games
2.18On 18 July 2023, the Victorian Government announced it would withdraw from hosting the 2026 Commonwealth Games due to cost overrun concerns. The Premier of Victoria stated the decision to cancel the Games was based on a cost-benefit analysis, with the Games likely to cost more than double what the Victorian Government had expected:
With significant planning work and extensive market soundings completed, it is now certain that the cost of hosting the Regional Victorian Commonwealth Games will exceed $6 billion—more than twice the estimated economic benefit the Games would bring our state.
In the face of these numbers, the Victorian Government has made the decision not to proceed with hosting the Commonwealth Games in 2026.
When the Commonwealth Games needed a host city to step in at the last minute, we were willing to help—but not at any price, and not without a big lasting benefit for regional Victoria.
Now the choice couldn’t be clearer—$6 billion is just too much.
Consultation, engagement and notification
Commonwealth Games Australia
2.19CGA representatives provided evidence at the second public hearing as to when they were advised of the cancellation. Mr Phillips said that he was advised in a call from Mr Tim Ada, Secretary of the Victorian Department of Jobs, Skills, Industry and Regions. Mr Phillips also said that:
CGA and CGF were ‘actively involved as delivery partners’ in shaping the Games, including roles on the organising committee and providing advice;
it was his ‘understanding’ that the CGF was unaware of the cancellation until lawyers from the Victorian Government landed in London;
he and CGA had not been made aware of the revised $6 billion to $7 billion figure, formally or informally, until advised by Secretary Ada in that call; and
while he and CGA had welcomed the opportunity to examine these figures, doing so had ‘become irrelevant’ with the passage of time.
2.20After that call, Mr Phillips and Mr Ben Houston, President of CGA, confirmed that they did not have any discussions with the Premier or Deputy Premier, nor did they attempt to speak with either of their offices, on the basis that it was ‘clear, from the Premier’s announcement on the day’ that a revised approach ‘didn’t seem to be an option on the table’.
2.21Furthermore, under questioning, Mr Houston confirmed that CGA had not received advice from any of the following parties on how to engage with this inquiry:
the Office of the Premier of Victoria or his officials;
the 2026 Commonwealth Games organising committee;
Sport and Recreation Victoria;
the former Minister for Commonwealth Games Delivery;
Australian Government Minister for Sport, the Hon Anika Wells MP, or her officials; and
the Australian Government Department of Health and Aged Care.
Local Governments
2.22In his opening statement at the second public hearing, the Mayor of the City of Greater Geelong, Councillor Trent Sullivan, provided an overview of his consultation with the Victorian Government, which he described as ‘not proper’, saying the councils were ‘not treated as partners’. Further, Mayor Sullivan said several of his ‘well-founded’ concerns about the process and Games preparation were realised in the eventual cancellation:
…a bit of a briefing which will set the scene of the relationship between the City of Greater Geelong and the state government. On Tuesday 14 February I had to call a special meeting of council for Wednesday 15 February, at 6pm, to consider confidential items around the Commonwealth Games. City officers were given information that required a decision of council. At 12 pm Tuesday I had to call what were essentially emergency meetings for the following day, to meet the state's deadlines. It was not proper, and we were not treated as partners in this process. Due to the pressure from the state government we were not able to act in our proper capacity as a decision-making body. We were given limited information without time for due consideration in making higher level decisions regarding the games.
That was the standard set going forward for communication from the state government to the City of Greater Geelong. In our February council meeting we initially raised concerns about the physical capacity to deliver the games and the timelines. We were the first ones to use our proper process in our council meetings to make those concerns known. On 30 June I signed off a letter to Premier Andrews further expressing my concerns regarding our role, responsibilities, funding, fiscal contributions, legacy aspects, investment in temporary infrastructure, delivery timeframes and capacity to deliver in the constrained labour market and materially constrained environment as well as further considerations. These concerns all went unanswered. The concerns were well-founded, as weeks later the games were cancelled. That sets the scene of what it has been like to work with the state government through this process.
2.23Mayor Sullivan said he was informed of the cancellation ‘roughly 10 minutes’ before it was live on the news, via a call from the Victorian Minister for Commonwealth Games Legacy, Water, Regional Development and Equality.
2.24Councillor Michael Whelan, Mayor of Bass Coast Shire Council, said that his council came to a briefing at the Melbourne Cricket Ground ’15 or 16 months ago’, or ‘very early on’ after the announcement of the bid. Attendance at the briefing was at the request of the Victorian Government. When asked about his experience with consultation, Mayor Whelan said he had a ‘very good rapport’ with the Victorian Government, which was ongoing.
2.25Mayor Whelan added that he found out about the cancellation while in meetings with the Wales and Scottish national teams, which the Bass Coast had planned to host during the Games, and confirmed the council ‘didn’t have any indication’ of the decision, nor did he have any knowledge of any approach in the months prior to the cancellation. However, contrary to evidence from other witnesses, he advised that his council had ‘worked closely’ with the Victorian Government and the ‘work’s not totally wasted’.
Event Pty Ltd
2.26Consultation and engagement were also characterised in similarly poor terms by a representative of the events industry. Mr Simon Thewlis, Managing Director of Event Pty Ltd, who has over 40 years’ experience in Victoria’s event industry, emphasised the severe toll of the COVID-19 pandemic on the events industry. He said the industry had been ‘left for dead’ in March 2020 when national lockdowns commenced. He added that, in November 2020, a Deputy Secretary from the Department of Jobs, Precincts and Regions said that the lack of financial support for the events industry was because ‘it is not a real industry’.
2.27Mr Thewlis called it ‘astonishing’ that officials ‘responsible for critical areas such as strategy, planning, delivery coordination, games services, culture, ceremonies, and government governance, as well as the CEO… had little to no real operational experience on major events’. He stated this had led him ‘well over a year ago’ to be ‘firmly of the view that the 2026 Commonwealth Games would end in tears’. Further, he said that ‘none’ of the event industry suppliers ‘had been asked even for budget costs’, and ‘organisers hadn’t engaged with the event industry to find more economical ways to do things, even though that is what our industry excels at’.
VicSport
2.28The Chief Executive Officer of VicSport, Ms Lisa Hasker, suggested that issues with consultation extended also to sporting organisations—not just National Sport Organisations, but also the state sporting associations. She said feedback from the sports was that there was insufficient consultation ‘about what towns were picked for what sports and that type of thing.’ She confirmed that VicSport had not been consulted about the preparation of the business case, but that she ‘wouldn’t expect that’, because VicSport’s ‘job is community sports’. Ms Hasker also added that she had begun talking with Sport and Recreation Victoria and the ‘Sports Commission’ around a year since the announcement, or approximately April 2023.
The Hon. Martin Pakula
2.29The Hon. Martin Pakula, the Victorian Minister for Tourism, Sport and Major Events at the time Victoria succeeded in its bid, appearing as a private citizen at the second public hearing. Mr Pakula advised the committee that he had not been made aware of the cancellation prior to the announcement. He informed the committee that the cancellation was not something he was expecting.
Compensation
2.30The Victorian Government noted in its cancellation announcement that it was its ‘aim to reach a rapid and amicable resolution of all contractual matters, including a reasonable settlement of costs incurred, to allow the CGF the opportunity to seek an alternative host city for 2026’.
2.31The 19 August 2023 joint statement between the Commonwealth Games parties said the $380 million settlement ‘finalises all matters between the parties’, which are ‘legally bound not to speak further regarding the details of the settlement.’ The joint statement, which also said the parties agreed ‘the multi-hub regional model was more expensive to host than the traditional models’, did not outline the division of funds between the CGF, CGA and Commonwealth Games Federation Partnerships, nor when the settlement was paid or would be paid.
2.32Following the cancellation, media reporting highlighted that legal advice was sought in advance of the 2018 Gold Coast Commonwealth Games about the implication of a cancellation. The legal advice reportedly asserted ‘the quantum of damages would still be massive’ had the 2018 Games been cancelled, including payments to the CGF. The former Premier of Queensland, Campbell Newman, said that his government was ‘determined to protect taxpayers’ in proceeding with the event.
2.33At public hearings, CGA representatives confirmed aspects of the joint statement:
Mr Phillips said his organisation did not ask for the settlement to be confidential.
Mr Houston said he could not detail the terms of the settlement, as CGA was subject to ‘a binding deed of settlement and release’.
Mr Houston reported that the ‘division between the parties is yet to be agreed’.
Mr Houston would not confirm or deny whether deed of settlement included a non-disparagement clause preventing CGA from criticising the Victorian Government, or whether the deed indemnified the Victorian Government against any future actions from any of the other parties.
Reputational impacts
2.34In the aftermath of the cancellation, much commentary focused on the impact to Victoria and Australia’s international reputation. Mr Thewlis said it was Victoria’s events industry ‘which built Victoria’s reputation as a place that consistently delivers world-class events.’ In Event Pty Ltd’s submission to the inquiry, sent in August 2023 after the cancellation, Mr Thewlis summarised the reputational implications:
It is scandalous that it could be that Victoria has gone from being known around the world as a place with an excellent reputation for consistently delivering very successful major events —including one of the most successful Commonwealth Games ever —to being one of the only places in the world to have ever walked away from a Games. And walked away not because of an external circumstance beyond its control, but simply due to very poor management.
2.35Mr Thewlis portrayed the situation as one in which decades of work had been damaged by a single decision:
The sudden cancellation of the Games does significantly impact Victoria's hard earned reputation as a place that consistently delivers excellent event and major events. This reputation was gained on the hard work and investment of a vast number of Victorian event people and businesses over many decades. Hence the anger and frustration that Victoria's reputation as a place that can deliver events has been tarnished.
2.36At the second public hearing, Mr Thewlis advised the committee that the impact is extending to international events:
Some of my colleagues are already getting feedback that it is affecting how Victoria is viewed as a destination for the really large international conferences. The trust factor is gone. That trust factor on events is really important. An event might cost $1 million or $2 million to do. The organisations putting on those events, particularly international ones, are putting their reputation on it. Anything that may risk that is of real concern.
2.37Mayor Tom Tate, of the City of Gold Coast, contrasted the cancellation with the 2032 Olympic and Paralympic Games and the Premier of Queensland’s ‘absolute focus’ on delivering that event, which he said would be ‘huge for our reputation.’ Conversely, he described the impact of the cancellation as follows:
The reputation is the thing. When Alberta pulled out of the bid, the news was that Canada had pulled out. Now that Victoria has cancelled the games, in years to come it will be: 'Australia cancelled the Commonwealth Games.' That's the one.
2.38Mayor Whelan of the Bass Coast Shire Council underscored the importance of reputational maintenance and preservation, even while stating that he did not have information on any specific impacts from the cancellation:
I don’t have any information specifically on what impact this decision may have in terms of reputation, but it would suffice to say that we constantly need to be working to build that reputation and to maintain that reputation. As you know, we run the MotoGP, and we do a really good job of it. So we think our reputation stands up pretty well in that regard.
2.39In contrast, Mr Pakula characterised Victoria’s global reputation as a destination for major events as strong and resilient:
I would say that Victoria’s global reputation is certainly in the sporting and major events space. It has always been, and, in my view, it remains very strong. We have great assets in regard to sporting infrastructure and a particularly unique offering in terms of proximity to the CBD. That’s not something you find in many places. We are, as I have always been very keen to point out, the only city on earth that has a grand prix and a grand slam. And whilst events of this nature, as in the cancellation, are things you'd rather avoid, in the medium term, I think Victoria’s natural advantages as an event state, and with the incredible support those events get from the Victorian community—I mean, we attend things in numbers that you just don't see in other parts of the country; no disrespect to senators from other parts of the nation; Victorians go to things—our reputation as a sporting and major events destination will be unharmed in the medium term.
Committee view
2.40With some difficulty, the committee has been able to loosely determine the timeframe of the bidding process for, and cancellation of, the 2026 Commonwealth Games from various sources, including media releases, Victorian Government documents, witness evidence and media reporting. In doing so, the committee has established a reasonably clear picture of events leading up to the cancellation to date.
2.41However, to date the committee has not been able to produce a definitive timeline. Key questions remain unanswered, including the repeated revision of cost estimates, and contradictory evidence and statements about whether the Victorian Government first approached Commonwealth Games organising bodies or vice versa. While such questions are not as important as the impact of the cancellation, they nevertheless are an important factor in the committee forming its recommendations, and as a guide for how future Australian governments should approach the bid processes for major events .
2.42Only the Victorian Government, as the key party to every stage of the process, can provide an authoritative set of dates and causes for each event and issue, if such records exist. Its refusal to cooperate with the committee means that this inquiry has so far been unable to do so. The committee notes the equivalent inquiry into this matter, being undertaken by the Victorian Legislative Council’s Select Committee on the 2026 Commonwealth Games Bid, and urges the Victorian Government to cooperate with that inquiry so that the facts might be established beyond dispute for the public record.
2.43Similarly, the committee notes and welcomes the audit by the Victorian Auditor-General into the cancellation. In particular, the committee welcomes the Auditor-General’s stated objective to determine the full costs of the Games, from bid to cancellation, and the quality of advice to government. Major sporting events—and the costs for hosting them—are universally relevant to all levels of Australian government. Therefore, the committee considers it imperative that a final and definitive account of the facts and figures of this cancellation be reached, by this or other inquiries and reviews.
2.44Victoria’s international reputation has been called into question by this decision. The committee agrees with evidence that, to date, Victoria has enjoyed a strong and enviable reputation as a world-class destination for major sporting events; shown, as Mr Pakula put it, by Melbourne being the only city to host both a tennis Grand Slam and a Formula One Grand Prix. This is a position any Australian city would want to be in, and a position the Victorian Government should work to retain, given the sporting, cultural, social and economic benefits to Victoria and Australia.
2.45Such a reputation cannot be taken for granted, nor can the continued hosting of events, as shown when Melbourne itself obtained the Australian Grand Prix from Adelaide in 1996. An impact to Victoria’s reputation as a host for other events—whether current or prospective or both—would compound the impacts of the Commonwealth Games cancellation. This emerging situation should be rectified, and it is the responsibility of the Victorian Government to rectify it by providing confidence and assurances to major sports and event companies.
2.46In Chapter 3, the committee has further comments and recommendations on some issues canvassed in this chapter.