Victoria cancelled the 2026 Commonwealth Games, but questions about cost comparisons remain

The business case still matters after cancellation

After a cancellation announcement, it is easy to say either that the event should never have been planned or that it should have gone ahead to the end. Neither conclusion, however, helps practitioners. What planners need to establish is which options were available when the decision was made and what evidence was used to compare them.

This article is the editorial team's commentary, based on reading the government announcement, the parties' agreement, the audit and the parliamentary review as distinct sources. Rather than judging whether cancellation was right, it examines when the evidence for proceeding or stopping could be compared on the same terms.

The initial costs were underestimated, and the later costs were overstated

The Victorian Auditor-General's Office (VAGO) report in 2024 identified two issues. Initial cost estimates had been set too low. And the cost estimates released after cancellation had been presented too high.

The editorial team does not consider picking one set of figures as correct to be the central issue. The same criteria should be used to check whether items were omitted from the initial proposal and whether the later proposal counted any costs twice. Using optimistic assumptions only when recommending that an event proceed, then adding every adverse assumption only when recommending cancellation, changes the conclusion without improving the quality of the comparison.

The same principle applies when approval documents are replaced by a new version. Changes in the total and changes in the assumptions need to be examined separately. Paying more for the same work, the organiser taking on new work, and including another organisation's costs are different issues.

For the athletes' villages, the change was who paid upfront, not the price of the buildings

According to VAGO, the athletes' village plans initially assumed private financing. This later changed to an arrangement in which the state government would pay upfront and recover the money through subsequent sales. This was a change in the plan; it does not mean the buildings were completed or sold.

Even when the same facilities are provided, who pays upfront changes the cash required and the exposure if the money cannot be recovered. Saying that assets will remain after the Games does not establish the ability to pay before the Games.

Similar situations arise in other events. If equipment that a sponsor had agreed to provide is instead purchased upfront by the organiser and reimbursed later, the service may stay the same while advance payments, ownership and recovery risk change. This is an application example provided by the editorial team, not a description of Victoria's actual contracts.

Alternatives need workable conditions, not just names

The majority view in the Victorian Parliament select committee's final report in 2025 criticised the insufficient information used in the initial business case. The table below does not reproduce the report's conclusions; it sets out comparison criteria the editorial team has drawn from this case.

Simply listing a "scaled-down option" between holding the original event unchanged and cancelling it does not create a viable choice. It must also state how much reducing locations or programmes would change the event's purpose, whether other parties' consent is required, and whether there is time to verify the proposal.

Publicly available information alone does not establish that a particular scaled-down option was feasible and cheaper. An unverified alternative should not be presented as a solution. Recommending an alternative requires showing both the conditions that would make it workable and the questions that remain unanswered.

Obligations remain even after cancellation

A joint statement by the parties on 19 August 2023 said that Victoria had agreed to pay AUD 380 million to settle the dispute. The other terms of the agreement were not disclosed. This settlement amount should not be read as the total cost of cancellation.

The approximately AUD 589.6 million reported by VAGO was the amount calculated at the time of the audit, combining costs already incurred with costs expected to be incurred. It includes the settlement. It should not be read as the final amount paid as of 2026, or as a separate amount to add to the settlement.

Cancellation reduces newly arising costs. But obligations under existing contracts and settlement payments do not disappear. When comparing the costs of proceeding and cancelling, it is therefore necessary to distinguish existing commitments, new commitments that would arise from continuing, and additional commitments that would arise from stopping. Subtracting the settlement from the total planned cost and calling the result "savings" compares figures with different scopes and timeframes. This article does not calculate such savings.

Even if cancellation was right, that does not mean the earlier review was adequate

The majority view in the parliamentary final report was that cancellation was the right decision at the time. It also criticised the initial business case and approval process. Both judgements can hold at once. At a particular point, stopping before larger obligations arise may be judged the better course. But whether the assumptions and information used up to that point were appropriate must be assessed separately.

Evidence used to defend cancellation afterwards serves a different purpose from evidence used to decide whether the original commitment should be made. In practice, what matters is being able to explain what has changed when new information arrives, rather than never reversing a decision. In particular, if the funding party or delivery arrangements have changed, start by comparing who is taking on which new obligations, instead of continuing to use the previously approved amount as the benchmark.

Unverified assumptions should limit the scale of commitments

Uncertain information does not mean a review has to stop. Problems arise when unverified conditions are treated as resolved and further commitments are built on them. Deciding that an investigation can begin and deciding that a contract can be signed require different levels of evidence.

The editorial team suggests recording the stage of verification for each important assumption. For example, distinguish between hearing that a supplier is willing to provide a service, receiving a quote for the same scope of work, and reaching agreement on payment and cancellation terms. This makes clear the scope of decisions that can be made now. These distinctions are a way to explain event reviews, not formal legal stages in supplier selection.

When evidence is insufficient, document the commitments that should not yet be made as well as putting the recommended proposal on hold. This allows internal review to continue while preventing external contracts or participant communications from prematurely fixing unverified assumptions.

Conditions for applying this to other events

• Use this case as a reference for events whose business case is materially affected by building new facilities, relying on external funding or recovering value from assets afterwards.
• Do not use an Australian state government's contractual, financial or parliamentary procedures as common approval criteria in South Korea. Check the relevant organisation's authority, contracts and funding conditions separately.
• Whether a scaled-down or revised option actually exists for comparison must be verified separately. The questions in this article do not guarantee that such an option is feasible.

Information not verified

• We have not verified the undisclosed settlement terms, individual contracts or the latest final amount paid.
• We have not calculated the net profit from choosing a particular alternative, the actual outcomes had the Games been held, or the amount saved through cancellation.
• We have read the government announcement, audit findings and parliamentary majority view as distinct sources. We have not conducted on-site reporting, audited the accounts or interviewed internal decision-makers.

Sources

• Government of Victoria, announcement of the cancellation of the 2026 Commonwealth Games (18 July 2023)
• Joint statement by the Commonwealth Games parties, announcement of the dispute settlement (19 August 2023)
• Victorian Auditor-General's Office (VAGO), audit report on the cancellation of the 2026 Commonwealth Games (20 March 2024)
• Victorian Parliament select committee, final report on the bid for the 2026 Commonwealth Games (April 2025)