For decades, state premiers have been easy marks for international and domestic sporting bodies looking for subsidised homes for their major events. From the Olympic Games and soccer World Cups to motorsport events, horse races and footy finals, state governments have tried to outbid one another with handouts, tax concessions and special deals to attract big events under the delusion they are economically beneficial.
As is well documented (for example here, here, here, here and here), major sporting events are big loss-makers for cities foolish enough to host them. But the willingness of gullible provincial and town authorities the world over to bid for them spawned an entire branch of maths created by consultants inflating the potential economic (and often entirely fictitious “social”) benefits of major events, invariably wildly overstating them.
While the constant losses associated with major events, especially the Olympic Games, means other countries have lost interest in handing themselves over to the corrupt spivs of international sporting bodies, Australian leaders have proved naive enough to keep putting their hands up when everyone else stopped: Brisbane is now hosting the 2032 Olympics, and Victorian Premier Daniel Andrews last year stuck his hand up for possibly the world’s silliest sporting event, the Commonwealth Games, in 2026.
Andrews well understands Major Event Mathematics — last year (which, funnily enough, was an election year), he also signed Melbourne up to another decade of the financially and environmentally disastrous Formula 1 race that has cost Victorian taxpayers half a billion dollars over a decade.
But Andrews doubled down on the stupidity of taking on the Commonwealth Games by making it a giant exercise in pork-barrelling: Melbourne wouldn’t host the swimming, running, jumping and standing still events; regional Victorian towns would instead. It was an innovative, if not inspired, way to burn up taxpayer money, by combining two bad ideas together.
The cost would be just $2.6 billion, he initially claimed. And you’ll never guess — Andrews reckoned “it is estimated the 2026 Commonwealth Games will contribute more than $3 billion to Victoria’s economy, creating more than 600 full-time equivalent jobs before the Games, 3900 jobs during the games and a further 3000 jobs beyond the closing ceremony” (which still amounted to nearly $350,000 per created job). The source of these purported benefits — which were endlessly parroted by the media, especially in regional Victoria — was the Andrews government’s own modelling.
Quelle surprise, the costs of the Commonwealth Games started blowing out at Olympic rates even before a single contract had been let. It was almost as if by linking two bad ideas, the costs were squared, not doubled — by yesterday’s announcement that the Games were being dumped, the putative cost had risen to $6-7 billion, which, given the history of cost blowouts for major events, probably means $10 billion.
Not even a dodgy big four consultancy with the most extravagant estimates of “social benefits” and “global branding” was enough to paper over the deep financial hole Andrews had proposed to dig in a budget already billions in the red.
Unusually, Andrews has cut his losses, rather than persevering with an event that would have cost Victorian billions for no discernible benefit. But if the Commonwealth Games are gone, the pork-barrelling isn’t — Andrews promised that he’d still be spending $2 billion on regional sports infrastructure, meaning long-suffering Victorian taxpayers won’t come out ahead despite Andrews’ substantial budget deficit.
Still, despite being another red-letter day for Australia’s worst government, the Victorian premier deserves some credit for saving Victoria from a fiscal disaster entirely of his own making. If we’re lucky, Annastacia Palaszczuk will find some similar gumption and cancel the Brisbane Olympics, as well — for which both Queenslanders and the rest of us are on the hook.
When it comes to major events, politicians should learn to run a mile. Or, at least, 1500 metres.
Was cancelling the Commonwealth Games the right move? Let us know by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
