Deputy Premier Jacinta Allan,the former minister for Commonwealth Games delivery,answers questions on Monday.Credit:Eddie Jim
Deducted from the cost was $173 million of state sport infrastructure funding and $161 million from the state’s housing program. Another $173 million from theCommonwealth and $16 million from local governments were also deducted from the cost to the state.
Hayward said that approach was questionable. He said the actual forecast cost would have been about $500 million higher than stated in the business case,which meant breaking even was the best-case scenario.
“Would you really go ahead with that?” Hayward said. “Even the best-case benefit-cost ratio looks pretty crummy ... This doesn’t stack up.”
He suggested the government might have calculated a political benefit to campaign on the Games in regional centres,including in marginal electorates,during last year’s state election.
Credit:Matt Golding
The 2022 business case was prepared with input from the Department of Jobs,Precincts and Regions,Visit Victoria,the Department of Treasury and Finance and consultants EY,MI Associates and DHW Ludas.
The analysis also relied on $228 million to $352 million worth of benefits for “avoided health costs and reduced productivity costs from increased physical activity”,and between $46 million and $97 million for “consumer surplus”:when the cost of a product is lower than the consumer is willing to pay. The business case also assumed the Games would bring an extra 1 million tourists to regional Victoria between 2022 and 2030.
“While the proposed model will deliver a range of benefits,it should be noted that the distributed model comes at additional cost that would not necessarily be incurred in a more centralised delivery model,” the document said.
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Asked on Monday if the Games ever stacked up,Deputy Premier Jacinta Allan – who was also the minister for Commonwealth Games delivery – did not answer. Instead,she referred to extra costs that emerged after the business case was completed – from interest rate rises,COVID-19 and the invasion of Ukraine – that worsened the initial estimates.
“The $3 billion in estimated economic benefit that was in that initial business case just simply didn’t stack up against the costs that came in[afterwards],” Allan said.
Andrews on Saturday said the original analysis represented “strong value for money,more benefits than costs”.
Grattan Institute transport and cities program director Marion Terrill.
The planning document also floated the possibility of turning existing traffic lanes on roads into Games-specific priority lanes for some corridors between Melbourne and Bendigo,Ballarat,Geelong and Gippsland.
But within the hubs,public transport was proposed to be the only means of accessing the events for spectators,volunteers and staff.
The Games was expected to create thousands of jobs. The government says it is continuing with$2 billion worth of legacy projects in the regions,including $1 billion worth of social and affordable homes.
“The key reason we wanted to host the Games in the first place was to have those ongoing benefits,” Allan said.
A government spokeswoman did not respond to direct questions on Monday,but said:“When the Commonwealth Games needed a host city to step in at the last minute,we were willing to help – but not at any price,and not without a big lasting benefit for regional Victoria.”
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Opposition major projects spokesman David Southwick said he would write to Allan to recheck the cost of all major projects given the Games exceeded its forecast budget so badly.
Opposition Leader John Pesutto renewed his calls forAllan to resign from cabinet as the minister responsible.
“Jacinta Allan and Daniel Andrews need to explain when they knew the Commonwealth Games had blown out,” Pesutto said.