Chiefs cry foul as Victoria cancels Commonwealth Games

Premier Daniel Andrews pulled the pin on hosting the Games in Victoria after updated estimates put the cost at up to $4.4b more than expected.

"Frankly, $6b to $7b for a 12-day sporting event, we are not doing that," he said on Tuesday.

"That does not represent value for money, that is all costs and no benefit."

Other states have ruled out staging the 2026 Games, leaving its future in limbo.

Commonwealth Games Australia said Victoria's decision was "beyond disappointing" but remains committed to finding a solution.

"We'll re-set after this and move on, and look to see whether we can continue to be the host nation for 2026," CEO Craig Phillips said.

Regional Victoria was the only bidder for the Games after the South African city of Durban lost the 2022 event and the original 2026 host Birmingham stepped in to fill the void.

The state budget last year outlined $2.6b would be spent preparing for the event across regional Victoria.

Geelong, Bendigo, Ballarat, Shepparton and Gippsland were named as regional hosts and the Melbourne Cricket Ground slated as the venue for the opening ceremony.

Mr Andrews said the government considered moving the Games to Melbourne and reducing the number of sports and hubs, but none of the options stacked up.

Treasurer Tim Pallas had been seeking a dollar-for-dollar contribution of $1.3b from the Commonwealth but no money was set aside in the May federal budget.

Mr Andrews said even if the federal government did come to the party, the Games were not worth the money.

Commonwealth Games leadership was told of the call in a meeting on Monday night Australian time.

The Commonwealth Games Federation said the government did not discuss solutions with it and accused the state of adding considerable expense to the price tag by including more sports and a fifth hub in Shepparton.

Mr Phillips said the forecast cost overruns were a gross exaggeration and the government didn't seriously consider other options.

"The Victorian government ignored recommendations to move events to purpose-built stadiums in Melbourne and remained wedded to temporary expensive venues in regional Victoria," he said.

The decision has also jeopardised Melbourne's standing as the sporting capital of the world.

"I would be very careful if I was an international sporting body coming in and doing business in this state in the future," Mr Phillips said.

Prime Minister Anthony Albanese said the decision to terminate the 2026 contract was one for Victoria.

But federal Minister for Sport Anika Wells said the government understood Victoria's decision, noting it did not engage with the commonwealth during the bid process.

"Ultimately our sporting events have to be good investments that provide value for money and lasting benefits to the community," she said.

The cost of breaking the Games contract is yet to be settled but will be revealed at a later date.

Mr Andrews suggested contracts for major upgrades to sports venues and housing had not been signed, with minimal costs incurred.

The Victorian government initially estimated the Games would contribute more than $3b to the state's economy and create in excess of 7500 jobs.

Some infrastructure projects and planned upgrades to regional sporting facilities will go ahead.

There will be $1b spent to build more than 1300 new social and affordable housing homes across regional Victoria and $150m on tourism and events.

About 100 Geelong-based workers were employed to co-ordinate the Games, with some expected to lose their jobs and others redistributed to other government roles.

The ministries for Commonwealth Games Delivery and Commonwealth Games Legacy, held by Jacinta Allan and Harriet Shing, will be wound up.

Opposition leader John Pesutto suggested Mr Andrews and Ms Allan had strung Victorians along.

"They perpetrated a fraud on the Victorian people - it was a con," he said.

Australian Associated Press