‘Tremendous progress’ on Games one day, lawyers called in the next

Premier Jacinta Allan told the Victorian parliament the state was making “tremendous progress” on the 2026 Commonwealth Games just one day before the government sought legal advice on how to axe the multi-city regional event.

The revelations prompted fiery questions about whether she had misled parliament in her June 13 evidence to the public accounts and estimates committee when she was the minister responsible for delivering the Games. Allan rejected the questions and said there was no evidence to prove she had misled the committee.

Premier Jacinta Allan in parliament on Wednesday.Credit: Eamon Gallagher

The timeline of who knew about Victoria’s secret plan to withdraw from the Games only 18 months after the state negotiated an exclusive right with the Commonwealth Games organisers to hold them is still unclear. Lawyers were engaged on June 14 to give advice about cancelling the Games, and the Department of Premier and Cabinet secretary was flown to London two days before cabinet decided to officially axe the deal.

Victorian taxpayers eventually paid a $380 million compensation fee in order to cancel the Games, which were meant to cost $2.6 billion but which the government later claimed would have cost up to $7 billion.

“I am delighted to have the opportunity to talk to you today about the tremendous progress that we are making to support Victoria, and indeed regional Victoria, to host the 2026 Commonwealth Games. On March 17, 2026, there will be 7000 athletes and officials from around 70 nations coming to regional Victoria to mark the 23rd Commonwealth Games,” she told the parliamentary committee on June 13.

Allan acknowledged logistical challenges with the multi-city event but said: “We can do this. We know we can do this ... There is huge energy, excitement and effort.”

A day later, on June 14, then premier Daniel Andrews informed her he was seeking legal advice from law firm Arnold Bloch Leibler to withdraw from the event, Allan confirmed to parliament on Wednesday.

During question time, Opposition Leader John Pesutto repeatedly accused Allan of misleading parliament and the public. “He has no evidence, no evidence, to substantiate his incorrect claim,” Allan said.

Asked whether she knew the initial $2.6 billion figure was unachievable when she gave evidence on June 13, Allan earlier on Wednesday told journalists: “I stand by everything I said at that time because there have been no decisions or discussions about other alternatives.”

The Age on Wednesday afternoon asked the premier’s office to explain how she could have been unaware of its dire financial circumstances during the June hearing – so extreme Andrews took steps to cancel it just a day later – given she was charged with the responsibility of delivering the event as minister. Her office did not respond before deadline.

On July 18, five weeks after Allan’s “tremendous progress” comments, Andrews and Allan announced the government would dump the event because of an almost threefold cost blowout from $2.6 billion to up to $7 billion. The decision was signed off by cabinet on the day prior.

“In the weeks leading up to that announcement, it became very clear that the costs exceeding $6 billion, rising up to $7 billion, for a 12-day sporting event was just too much,” Allan told reporters on Wednesday.

The law firm’s June engagement, at a cost of $1.27 million, was revealed in a Department of Premier and Cabinet questionnaire to an upper house inquiry probing the Games cancellation.

Allan said Andrews, the then-premier, and the Department of Premier and Cabinet were handling the matter even though she was minister for Commonwealth Games delivery at the time.

Then premier Daniel Andrews and Allan publicly announced the cancellation on July 18.Credit: Joe Armao

Treasurer Tim Pallas on Wednesday conceded the government had confirmed projected cost overruns before engaging lawyers to begin the cancellation, as would be the natural order of events.

“Prior to the retention of lawyers, it was clear that there were market pressures that the market soundings on the delivery service were demonstrating that there were cost pressures,” Pallas said. “The lawyers were retained to give us a clear appreciation of the government’s rights and obligations.”

Asked whether that called Allan’s evidence into question, Pallas said: “She was making it clear that at the time the government was proceeding with the Games, which was in fact happening. Was it the case that there were cost pressures emerging some weeks before the decision was made? Yes there were, and I think it would insult everybody’s intelligence to suggest there weren’t.”

Pesutto said the premier needed to come clean about exactly how much money was wasted on the cancelled event.

Victorian Opposition Leader John Pesutto.Credit: Penny Stephens

“Victorians want a government they can trust, they want a government of principle, one that maintains high ethical standards. And I think there’ll be an underlying concern that Victorians will have that they’ve been misled,” Pesutto said.

Victoria 2026, the government-appointed organising committee led by Jeroen Weimar and Peggy O’Neal, first requested an extra $722 million in public funding on February 15.

“On 4 April, [O’Neal] wrote to the then deputy premier, Minister Allan, highlighting the critical timelines for decision-making,” Weimar and O’Neal said in a submission to the upper house inquiry, published on Wednesday.

Later that month, the Office of the Commonwealth Games asked the organising committee to propose cost mitigations. Victoria 2026 revised its budget request for extra public funding to $731 million and found $124.8 million in savings.

The organising committee had more than 100 staff, plus hundreds of suppliers and multiple offices, it said in its submission to the inquiry.

The Department of Jobs, Skills, Industry and Regions said it spent $43.55 million supporting the Victoria 2026 organising committee, on top of marketing, program and venue planning.

The Department paid out almost $550,000 to three employees in termination payments.

The Victorian government in August reached a $380 million settlement with the Commonwealth Games Federation and Commonwealth Games Australia. Under the terms of that settlement, they have been unable to comment further.

The future of the 2026 event remains uncertain, with an alternative host yet to be identified. Commonwealth Games officials have signalled it may be delayed into 2027 as a result.

Parliament’s bipartisan public accounts and estimates committee, which Allan addressed in June and which is dominated and chaired by Labor MPs, on Tuesday called on the government to publicly release the details behind the cost blowouts used to justify cancelling the Games.

Housing Minister Harriet Shing, who was in charge of the Games legacy, also stood by her evidence to the committee given on June 8. She said she was only informed in the “days prior” to the July cancellation even though the Games had been focused on the legacy projects it could bring.

“We were continuously modelling the work around costs to deliver the Games,” Shing said.

Sale yards in Ballarat that were to be converted into accommodation for Commonwealth Games athletes.Credit: Jason South

“The information I’ve provided to the parliament in giving information and detail around the legacy work and the regional package has at all times been intended to provide people with information. That’s always been my approach and will continue to be,” Shing said.

The government is proceeding with $2 billion worth of social housing and sports infrastructure to the regions. Assistant Treasurer Danny Pearson also said he became aware the Games would be cancelled in the days leading up to the announcement.

Victorian senator Bridget McKenzie, a member of the Senate committee that separately investigated the Games cancellation, reiterated its findings that the state government had actively hindered its proceedings. Allan has previously rejected that finding.

“It is very concerning that the now premier has on one day categorically assured the Victorian parliament that the Commonwealth Games are on track, while the next day engages lawyers to begin cancellation processes,” McKenzie said. “Premier Allan is not making it easy for Victorians to put faith in her.”

Hearings for the upper house inquiry begin next week, with the Department of Jobs, Skills, Industry and Regions, the Office of the Commonwealth Games, Department of Premier and Cabinet, and the Victoria 2026 government-appointed committee.

Development Victoria, in its responses to the upper house inquiry, also revealed the agency spent $21.6 million on athletes’ villages for design consultants and advancing master plans, site assessments, engaging with stakeholders and the community.

Another $19.2 million was spent on major competition venues. The agency had 50 full-time equivalent staff working specifically on the Games at June 30. The Victorian Auditor-General’s Office is separately investigating the cancellation.

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