Dumped Games talks hit snag

Victoria is expecting its Commonwealth Games compensation talks to drag on for weeks.

Premier Daniel Andrews announces Victoria had pulled out of hosting the 2026 Commonwealth Games, citing major cost blowouts. Picture: Asanka Brendon Ratnayake/AFP

Victoria’s Commonwealth Games compensation talks have stalled and could last for weeks amid speculation the bill for the cancelled event could cost hundreds of millions of dollars.

The government conceded on Sunday that the negotiations for how much to pay for cancelling the 2026 event would continue in Australia over “coming weeks’’.

Both sides are trying to ­maximise their positions after the Victorian government opted to kill the event rather than spend what it alleges is $6bn-$7bn to host the Games.

The original cost of running the Games was mooted to be $2.6bn but the government ­failed to take into account the high cost of running it in a ­series of different regional ­locations.

Premier Daniel Andrews and Tourism Minister Martin Pakula at Ballarat announcing Victoria's successful bid for the 2026 Commonwealth Games.

This meant higher security, transport and other expenses which weren’t properly costed when the government bid for the rights.

A government spokeswoman said: “Negotiations are continuing in Australia over coming weeks.’’

A negotiating team sent by Victoria to London has failed to engineer a result for the state.

Games officials in London were initially predicting a compensation bill of tens of millions of dollars. Leon Zwier, who is close to Mr Andrews, is reportedly working for Victoria during the negotiations.

He did not respond.

Hopes of a cheap exit from the Games deal have now deteriorated, although organisers are still hopeful of securing another host.

The Victorian government at the weekend floated a tourism tax on short-term stay accommodation, of up to $5 a booking.

The government did not confirm the tax but it has been signalled as part of its looming housing policy.

The opposition claimed the tax was one of dozens implemented under the Labor government since 2014.

Opposition Leader John ­Pesutto said: “Daniel Andrews and Jacinta Allan (Deputy Premier) are desperately trying to distract Victorians from the growing Commonwealth Games scandal.

“They will do anything to avoid scrutiny of their gross ­incompetence and deceit and are happy to impose more taxes on hardworking Victorian workers, families and businesses ­already experiencing unprecedented cost-of-living pressures, to cover the cost of their ­mistakes.’’

Liberal leader John Pesutto. Picture: Alison Wynd

The global condemnation of the Victorian decision to dump the games has shocked members of the Andrews government.

But sources said Mr Andrews had calculated that the state’s budget position could not afford to deteriorate further, with state debt predicted to hit more than $170bn.

The government’s track record of financial incompetence and willingness to spend big to win votes is rapidly becoming a major issue for Labor.

But the Liberal Party, which has had a succession of leaders, is riddled with divisions and Mr Pesutto is being sued for defamation by former Liberal MP Moira Deeming.

The Deeming affair has distracted the opposition and some believe it will lead to Mr Pesutto losing his job.