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Comm Games cost blowout flagged months before canning

Victoria's government was told months ahead of cancelling the Commonwealth Games that the event would cost almost $2 billion more than expected.

Premier Jacinta Allan was told the 2026 Commonwealth Games in regional Victoria would cost almost $2 billion more than first thought months before cancelling the event.

Speaking at a parliamentary inquiry into Victoria's Games bid on Monday, Department of Jobs, Skills, Industry and Regions secretary Tim Ada said Ms Allan, who was then the minister for the Games delivery, was warned in early March of the cost blowout.

Its updated budget estimate of $4.5 billion was knocked back in April, Mr Ada told the inquiry.

It was announced in April 2022 that multiple regional centres would host the Games, with a cost of $2.6 billion confirmed in the state budget the following month.

But the Games were canned on July 18 this year, with then-premier Daniel Andrews citing the event would cost up to $7 billion.

Mr Ada told the inquiry on Monday his department again provided a cost submission to Ms Allan in June seeking $4.2 billion, but the submission was not formally considered by the government for weeks and was rejected on July 14.

"I understood that for some weeks before the decision was made to not proceed with the Games, the government was considering all available options in the context of increased budget requirements," Mr Ada said.

"I understood that this included (the Department of Premier of Cabinet) seeking legal advice on options."

The Victorian government first sought advice on withdrawing from hosting the 2026 Commonwealth Games on June 14, the day before Jacinta Allan told a budget estimates hearing that Victoria had made "tremendous progress" on the event.

Mr Ada found out about the legal advice being sought around June 19.

He also told the inquiry that the full cost of the Games to the department would be about $200 million, including spending on regional housing commitments.

Ms Allan has repeatedly said the revised cost estimate of between $6 billion and $7 billion materialised in the weeks leading up to the cancellation.

But she last week confirmed she received a letter from organising committee chair Peggy O'Neal after it asked for a $722 million boost to its original $1 billion budget.

The inquiry will formally request Ms Allan give evidence but she has ruled out appearing.

The Victorian government agreed to $380 million in compensation to organisers as part of a settlement.

Documents provided to the inquiry by departments show additional costs of more than $150 million, taking the total beyond $500 million.

Deputy Premier Ben Carroll described the total cost as "speculation" and defended Ms Allan's decision not to front the inquiry.

"This is an inquiry established by our political opponents," he told reporters.

Ms O'Neal, organising committee ex-chief executive Jeroen Weimar and Department of Premier and Cabinet secretary Jeremi Moule are scheduled to front the inquiry later on Monday.

An interim report is due by the end of April 2024 and a final report 12 months later.


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