Victorian Premier Jacinta Allan battling crises on two fronts

Victoria’s new Premier Jacinta Allan has been engulfed by scandals over new Commonwealth Games blowout details and her bungling Treasurer.

Victorian Premier Jacinta Allan. Picture: NCA NewsWire / Luis Enrique Ascui

Jacinta Allan is fighting political controversies on two fronts, with details of a $722m Commonwealth Games blowout emerging and an admission from her Treasurer that he blundered.

The crisis engulfing Victoria’s new Premier deepened on Wednesday with the release of new fin­ancial details around the 2026 Commonwealth Games revealing the government was aware as early as February this year that the event was in financial trouble.

In a five-page submission to a parliamentary inquiry into the cancellation of the event, games chiefs Jeroen Weimer and Peggy O’Neal revealed that on February 15, organisers asked the government for an emergency $722m boost to funding.

The submission reveals that almost two weeks later, on February 27, the games chiefs presented a budget request “noting the risks associated if the request was not successful”.

On April 4, according to the submission, the chair of the organising committee wrote to Ms Allan, then the minister responsible for delivering the games, “highlighting the critical timelines for decision-making”.

The $722m funding request challenges the government’s suggestion that the full extent of the financial crisis was not apparent until much closer to the eventual decision, announced by former premier Daniel Andrews on July 18, to tear up the contract, leaving taxpayers facing a bill of at least $380m.

Opposition Leader John Pesutto called on the Premier to come clean, claiming the overall cost to taxpayers from the bungled event was still not known.

“This is proof that Jacinta Allan knew months ago that the Commonwealth Games had major cost issues,” he said. “It makes a mockery of her claims that she only knew in the weeks leading up to the announcement the Games would be cancelled.”

As Ms Allan was defending the government’s handling of the games on Wednesday, Treasurer Tim Pallas admitted he had bungled in announcing a new land tax this week that took his new leader by surprise.

Mr Pallas “put his hand up” in taking the blame for confusion caused by his premature announcement of proposed amendments to the Victorian Residential Land Tax.

“We all less than perfectly express ourselves on occasion and I’ll put my hand up as clubhouse leader in that respect,” he said outside parliament. “Take us at face value, if we mislead with anything that is wrong, don’t assume that there’s anything other than the inelegance of language, rather than a failure of government to understand the way forward.”

Mr Pallas said the expanded land tax had been signed off by cabinet but he admitted his colleagues were surprised by his decision to unveil the measure.

He confirmed the government had understood there were “cost pressures” affecting the decision to host the Commonwealth Games “some weeks” prior to cancelling the event.

“We were doing market soundings when we were going through the process of testing what the market’s appetite [was] for the delivery of the Commonwealth Games,” he said.

Ms Allan revealed on Wednesday that Mr Andrews engaged lawyers to help the government cancel the 2026 Commonwealth Games on June 14 – more than a month before the public was told about the event’s shock axing.

In a belated admission, Ms Allan’s office confirmed on Wednesday afternoon that law firm Arnold Bloch Leibler was hired by the government in mid-June.

Ms Allan’s office said while the lawyers would have been providing advice on cancelling the games, the decision to tear up the final contract was not made until just 24 hours before the July 18 announcement by Mr Andrews.

Mr Andrews told Victorians cost blowouts had taken the cost of staging the event from $2.6bn to $7bn.