These decisions to delay or mothball major projects come against a backdrop of mounting public debt and capacity constraints in the construction industry. Victoria’s debt is expected to exceed $160 billion by the time the Games would have been held – far more than any other state or territory’s. The engineering construction industry has been facing soaring demand for skilled workers and key materials for several years now,to the point where it’s nominating hyper-escalation of construction costs as the biggest challenge the industry faces. With so much competition for scarce resources,now is a particularly expensive time to build.

Critics of the premier’s decision,and there are plenty,are calling it a humiliation,a betrayal,a fiasco. But this is wrong-headed. It is surely better,if you find yourself in a hole,to stop digging. Just look at how quickly other Australian states have beenruling out a rescue job – “ruinously expensive”,according to the Western Australia premier;“not a priority” for the NSW premier;“costs would outweigh economic benefit” for South Australia.

So let’s go the next step,premier.

You cancelled the East West Link back in 2014 because the benefits weren’t enough to justify the costs,and you’ve cancelled the Commonwealth Games for the same reason. You’ve mothballed Airport Rail and Geelong Fast Rail because this is such an expensive time to build,and Victoria doesn’t have the money.

There’s really just one more biggie,where the benefits are expected to be only 60-70 cents for every dollar spent,according to the Parliamentary Budget Office,or 51 cents,according to the auditor general. Isn’t it time to cancel Suburban Rail Loop?

It is surely better,if you find yourself in a hole,to stop digging.

Marion Terrill is director of the Transport and Cities program at Grattan Institute.

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