The fallout from the cancellation of the 2026 Commonwealth Games by Victoria

The cancellation of the 2026 Commonwealth Games by Victorian Premier Daniel Andrews took all stakeholders – Commonwealth Games officials, athletes, sports bodies and local government officials – by surprise1.

The Andrews administration will likely deal with the political fallout from not honouring its contract to host the games, but there may be legal and reputational damage ahead.

The principal reason given for pulling out of the games was financial. The Victorian government has said that based on its projections, the costs had ballooned from the initial projection of A$2.6 billion to more than A$6 billion2. Such an investment could no longer be justified.

There were hints earlier this year that a significant reassessment of Victoria’s commitment to the games was taking place.

In the state budget for 2023–24, delivered in May, the treasury admitted the risks to Victoria’s economic outlook were greater than normal. The state has a growing debt burden, with net debt forecast to grow from about $135.4 billion in 2024 to $171.4 billion by 2026–273.

These projections mean Victoria’s net debt as a proportion of the state economy would, by the time the games were to take place in 2026, be approaching 24%4. This is also going to be an election year in Victoria.

Victoria’s debt is due in part to long periods of lockdown during the COVID pandemic, which necessitated significant public spending. In some senses, the Commonwealth Games could be said to be a victim of long COVID.