Costello casts doubt on value of the Games

PETER Costello's audit team has questioned whether the 2018 Commonwealth Games are worth the budgeted $2 billion

PETER Costello's audit team has questioned whether the 2018 Commonwealth Games are worth the budgeted $2 billion to hold them on the Gold Coast and the risk of "crowding out" more worthwhile projects.

Puncturing some of the hoopla surrounding the Games, the commission cautions that the promised economic benefits of such events tend to be overstated.

The 2000 Sydney Olympics generated a net loss of $2bn, according to one study cited in the former federal treasurer's interim review of Queensland's finances.

"There is a high opportunity cost of investing in Games infrastructure, even leaving aside the broader question of affordability," the audit commission found.

"In a fiscally constrained environment, there is a risk that the Games investment is likely to crowd out other projects with potentially higher economic benefits, including road, transport and health infrastructure."

Queensland Treasurer Tim Nicholls added weight to speculation that the government would take an axe to the Games budget, saying it was looking to deliver them in the "most economic and efficient way possible".

He approvingly noted comments on Wednesday by Commonwealth Games Federation president Tunku Imran that they would be a "Toyota" rather than Rolls-Royce affair.

The Costello commission said the Queensland government could be up for the full $663 million cost of building the athletes' village, even though the Games bid provided for it to be split with the private sector. As no contracts were in place, there was "considerable uncertainty" as to who would bear the development risk, it said.

All other expenditure and risks were being carried by the Queensland taxpayer, it found.

"There may be a case to upgrade sporting infrastructure on the Gold Coast to meet long-term community need and support the Gold Coast as an events destination. However, there is a basic value-for-money question as to whether this new infrastructure project could be provided at a substantially lower cost."

Gold Coast Mayor Tom Tate said most facilities were already in place. "We are going to make the Games affordable," he said.