Daniel Andrews says he has been aware for months that the cost of Victoria hosting the 2026 Commonwealth Games had increased beyond the original $2.6bn budget, but would not confirm if state Treasury officials rejected a bid to increase it to $5bn.
The premier said there may have been a proposal by the agency responsible for delivering the Games for an increased funding allocation ahead of the state budget in May, as reported by the Age.
But he said the government was not aware at the time that the Games would cost an estimated $6-7bn, which has been blamed for their cancellation.
Andrews said the government received “lots of different inputs” about the cost of the Games before announcing the shock cancellation of the event, which was to be held across regional Victoria, on Tuesday.
Speaking to reporters on Friday, Andrews said the government had been working for months to get a “consolidated, agreed, final position on costs”.
“There is work that happens. That’s the job of the government to do that work,” he said. “You don’t make a decision like this in a day or a week.”
Andrews said it was not one factor that contributed to the large increase, after telling reporters on Tuesday that security, service, transport and temporary infrastructure expenses contributed to the unforeseen cost blowout.
The Age reported the original bid documents did not contain estimates for the cost of transport and policing for the event.
Prof Robert Brooks, from Monash University’s business school, said he was surprised the costs might not have been included.
“They’re costs that should have been identified and apparent in the initial bid,” he said.
“If it’s standard practice, it’s an interesting one. If our practice is that we don’t want to take them into account, why do we now want to take them into account?”
Andrews confirmed that the estimated event cost of $6-$7bn was calculated internally by the Department of Premier and Cabinet and the Department of Treasury and Finance.
Government sources have confirmed consulting firms, including EY, contributed to the initial $2.6bn estimate. The government has committed to releasing the original business case, but not the latest costings.
The Commonwealth Games Australia organisation has said the stated blowout was exaggerated and claimed the government had ignored recommendations it made to reduce costs.
Guardian Australia understands that organisers were last month told by the government that the original cost of the 2026 Games, which were to be held across five regional Victorian sites, had grown from an initial $2.6bn to about $4bn.
On Friday Andrews also batted away questions about the opposition calling for the deputy premier, Jacinta Allan, to be sacked from cabinet over the cancellation. Allan held the portfolio of Commonwealth Games delivery, which has now ceased to exist.
He said he would not take advice from the opposition, whom he labelled “irrelevant”.
“If anyone’s going to get sacked, it will be the leader of the opposition,” he said.
There are already three separate inquiries that the Coalition have called for to examine the Andrews government’s cancellation of the Games: an existing Senate inquiry into the event itself, an investigation by the state’s auditor general and a Victorian parliamentary inquiry.
The opposition leader, John Pesutto, accused the government of knowing the real costs of the event but covering up the figures.
“As well as a full report by the auditor general into this scandal, we need a parliamentary inquiry to get to the bottom of this sorry saga,” he said.
Asked about the prospect of a state parliamentary inquiry to look into the cancellation, Andrews said he is not interested in “political stunts”.
Victorian government officials are in London negotiating with Commonwealth Games organisers over the cost of breaking the contract to host the event.
