Last Tuesday, major Australian media reported a shocking news that the Victorian Premier, Daniel Andrews, suddenly announced the cancellation of the 2026 Commonwealth Games to be held in Victoria, which caused a great stir and sparked widespread questioning. Since its inception in 1930, the sporting event has never been canceled except during World War II. The Mayor of Gold Coast in Queensland recently stated that if the federal government rearranges funding, the Commonwealth Games can be held in Gold Coast. The shocking move by Victoria reflects the economic difficulties facing the state.
Dramatic Turn of Events
Last April, when the hosting rights for the Commonwealth Games were awarded to Victoria, the state’s premier, Andrews, confidently stated that by 2026, Victoria would once again host the Commonwealth Games in Melbourne and many other towns and cities in the state, just 20 years after the previous hosting. The major event centers would be the four major towns of Geelong, Bendigo, Ballarat, and Gippsland, each with an athlete village, and the opening ceremony would take place at the Melbourne Cricket Ground (MCG) in the city center. Andrews stated that the Commonwealth Games were expected to generate $3 billion in revenue for Victoria and create 7,500 jobs.
However, in just one year, a dramatic turn of events occurred. Victoria’s successful bid for the 2026 Commonwealth Games hosting rights was the result of circumstances aligning in its favor. The original host, Durban in South Africa, was scheduled to hold the Games in 2022 but had to withdraw due to financial problems in 2017. In a short period of time, Birmingham, the original host for 2026, was able to organize the Games in 2022, leaving the 2026 hosting opportunity vacant. Malaysia’s Kuala Lumpur, Cardiff in the UK, Calgary and Edmonton in Canada, and Adelaide in South Australia all dropped out of the bidding process due to concerns over costs, making Victoria the only viable candidate city. On April 12, 2022, Premier Andrews announced that Victoria had won the hosting rights for the 2026 Commonwealth Games, with an estimated investment of $2.6 billion in the project, which would focus on rural and suburban areas for the main competition venues, driving development in these areas. However, on Tuesday, July 18, Andrews stated that “the cost of hosting these games is not $2.6 billion, but at least $6 or $7 billion,” and therefore decided to abandon the hosting rights. Andrews stated that he would not take money from hospitals and schools to hold a sporting event that would cost three times the estimated and budgeted amount from last year. At the same time, Andrews announced that he would provide a basket of spending totaling AUD 2 billion for rural areas, in place of funding for hosting the Commonwealth Games. This includes a AUD 1 billion rural housing fund to build 1,300 new homes across Victoria’s rural areas. This move appears to be a way to shift public disappointment and even anger over the announcement of abandoning hosting the games. It is worth noting that the cost of the 2022 Birmingham Commonwealth Games was AUD 1.5 billion, the 2018 Gold Coast Games cost AUD 2 billion, while the 2014 Glasgow Commonwealth Games cost only AUD 1 billion. The Victoria government’s current budget of AUD 60-70 billion has sparked controversy. This project was not allocated additional funding in the state budget announced in May of this year.
Currently, the negotiating team of the Victoria government is in talks with the Commonwealth Games Federation. The leader of the Victorian opposition, John Pesutto, has explicitly demanded that the Andrews government clarify the cost of canceling the contract, and the amount of compensation has not been announced. This situation inevitably breeds suspicion among the public, and perhaps the problem is more serious than what is currently publicly known. It is expected that Victoria’s debt will reach AUD 135.4 billion in 2024 and grow to AUD 171.4 billion in 2026-27.
Gold Coast Maybe Taking Over Hosting Rights
Sydney, Perth, Brisbane, Melbourne, and Gold Coast have all hosted the Commonwealth Games. The Commonwealth Games Federation has pointed the finger directly at the Victoria government, saying that the decision to host the games was related to promoting the economic development model of rural areas, and the cost of the 2022 Birmingham and 2018 Gold Coast Games was less than AUD 2 billion, while it suddenly shot up to AUD 6 billion now. Melbourne hosted the Commonwealth Games 17 years ago and proposed that several central cities in rural Victoria jointly host the event. Ignoring the suggestion to move the event to Melbourne and insisting on using expensive temporary venues in rural Victoria is considered the main reason for the soaring cost.
The local councils that are about to become the host of Victoria will hope to rely on the government’s commitment to implement key symbolic regional infrastructure upgrades and launch a AUD 1 billion housing plan across the state to build more than 1,300 new social and economic affordable housing units, and AUD 150 million will be invested in tourism and activities, all permanent and upgraded sports facilities in the plan will continue. It is crucial for the Victoria government to continue to engage with local councils at this time.
Although Queensland Premier Annastacia Palaszczuk ruled out the possibility of taking over the hosting rights earlier, considering that the 2032 Olympic Games is the priority, Gold Coast Mayor Tom Tate subsequently stated that if the federal government rearranges funding, Gold Coast is confident in hosting the 2026 Commonwealth Games and believes that hosting the 2026 Commonwealth Games can provide impetus for Queensland’s bid to host the 2032 Olympic Games. Tom Tate has contacted Commonwealth Games officials, saying that this requires the support of both parties of the Australian federal government, and Victoria’s funding can be transferred to Gold Coast, while also needing the support of the Queensland government.
Currently, many athletes expressed their “heartbreak” over Victoria’s cancellation of hosting the 2026 Commonwealth Games. Bruce Quick, an Australian shooting veteran who has participated in seven Commonwealth Games and won 14 medals, said that it is “awkward” for Victoria to suddenly back out three years before hosting the event. 19-year-old Australian shot put rookie Sheravan Bhagat has been actively training to represent the Australian team at the 2026 Commonwealth Games, and she also feels “devastated” about the Andrews government’s decision. If Gold Coast can take over, it may not be a bad thing after all, as it can not only restore Australia’s international reputation but also prevent many athletes from feeling disappointed.
Victoria’s Difficult-To-Reverse Financial Situation
A new poll shows that the Victorian government and Premier Andrews’ approval ratings have significantly declined after the cancellation of the Commonwealth Games, with the opposition calling for Deputy Premier Allen, who was responsible for the Games, to resign. The Victorian Labor Party’s approval rating has dropped to 53% (an 8.5% decline since late May), while the Liberal National Party’s approval rating is at 47% (an 8.5% increase). Although 58% of Victorian voters believe that canceling the 2026 Commonwealth Games was a “good idea,” 42% hold the opposite view, and the support for the Victorian government and Premier is still declining. This indicates that Victorian voters have accepted Andrews’ claim that the cost increase was significant and that Victoria should not lose money to host the Commonwealth Games. However, it remains unclear whether the $7 billion expenditure is real or just an excuse, or even a deception of Victorian voters, and it remains to be seen whether the opposition can uncover the truth in the future. This survey of over 1,000 Victorian citizens shows that for the first time since Andrews was elected as Premier in 2014, the number of dissatisfied voters has exceeded the number of satisfied voters. The decision to cancel the Games has hit Andrews’ popularity and put him in a weak position politically, allowing the Liberal Party to re-enter the next election. Now, what makes the Andrews government even more unpopular is the exposure of the Victorian debt crisis caused by the decision to cancel the Commonwealth Games.
According to data from the world’s top rating agency S&P, Victoria’s current debt level has exceeded AUD 1 trillion, which is even more exaggerated than the total debt of NSW, Queensland, and Tasmania combined. Specifically, Victoria’s net debt this year seems to be more restricted, at AUD 115 billion, but the trend is more worrying. The Independent Parliamentary Budget Office expects it to rise to AUD 165 billion by 2025-2026, which will cause debt rating agencies to consider downgrading, leading to higher interest rates and a series of severe budget cuts. No wonder Federal Sports Minister Anika Wells said she understood why the Victorian government gave up hosting the 2026 Commonwealth Games because the public is facing a cost-of-living crisis and needs to prove where every penny goes.
From 2018 to 2022, the Victorian government’s debt doubled. Part of this is due to the Victorian government’s desire to increase infrastructure construction. During the COVID-19 pandemic, Victoria accumulated AUD 31.5 billion in COVID-19 debt, which was described as a sleep period for the Melbourne economy in September 2021 when Melbourne was the city with the longest lockdown in Australia, with a total of 267 days. According to current predictions, Victoria will have to use 8% of its fiscal revenue to pay interest on its debt in the near future – only to pay interest, not to repay the principal. The debt wall built by the Victorian government can no longer be easily increased.
Who is responsible for this?
The Victorian government has repeatedly emphasized the lockdowns and the large investments needed to combat the pandemic, but other states have also faced the COVID-19 epidemic without the same massive debt burden. Some experts analyzing Victorian debt have also stated that long-term lockdowns have had an impact, but this is also due to the Andrews government’s mishandling of the pandemic. Moreover, most of Victoria’s debt is related to excessive borrowing by the government for infrastructure construction during low-interest-rate periods. In the past year, interest rates have risen 12 times, from 0.1% to 4.1%, causing the Victorian government, which has excessively borrowed for various construction projects, to be in dire financial straits. Blaming the cancellation of the Commonwealth Games on a significant increase in spending is likely an excuse to cover up the Andrews government’s poor financial management.
When Premier Andrews announced the cancellation of the 2026 Commonwealth Games, the Commonwealth Games Federation stated that it had never heard of the estimated AUD 70 billion expenditure and questioned its authenticity, and believed that there would be no overspending if the venue was changed to Melbourne. Any Victorian resident should demand that the government provide more detailed data, and if any officials have been derelict in their duties, concealed information, or falsified information, they should not be lightly let off the hook. However, over the past few years, Premier Andrews has never admitted to his mistakes in policy or explained the situation in detail to the public, but the public still gives him overwhelming support. Victorian residents also bear responsibility for this situation.
A Responsible Government
This week, the Victorian government reached a settlement with residents of several public housing towers in the city that were suddenly locked down for 14 days during the pandemic. The government allocated $5 million in compensation, paying $2,200 to each resident to end their collective lawsuit against the government. Premier Andrews’ government stated that the compensation did not mean the government was at fault, and he has consistently maintained that the lockdown decision was reasonable and necessary, refusing to apologize to the residents. However, the Ombudsman also stated that this lockdown was inhumane, and the residents have been fighting for better treatment from the government.
The decision by the Victorian government to implement a lockdown may have been reasonable, but it may not have been executed properly. Similarly, the cancellation of the 2026 Commonwealth Games may have had the support of Victorian residents, but it does not necessarily mean that the government did not make mistakes in the process. In a democratic society, the public has the right to demand that the government disclose details and be accountable to the people, without compromising national security.