Broke Victorian government sends $200 million to Scotland

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The Commonwealth Games should be the scandal that finally sinks the Victorian government.

The Games are a joke. Almost no one in Victoria cared or wanted the state to host the Games again in 2026, just 20 years after the last time it did so.

The choice to host the Games was the thought bubble of the Victorian Government and its former leader, Dan Andrews.

Last year Andrews chose to cancel the Games, citing that the event was no longer affordable given the blowout in state debt:

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State government debt

As usual, Teflon Dan was unrepentant for placing Victorians in a predicament of his choosing:

“I am sorry that we find ourselves here. I’m sorry that we are in this position. But I’m not going to apologise for not taking money out of hospitals and schools – but the easier thing to do is to push on. You’re asking me to apologise for cancelling the Games, but I’m not going to do that”.

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As a result, Victorians are on the hook for hundreds of millions of dollars of compensation payments.

The Victorian government has already handed over $380 million in compensation to the Commonwealth Games Federation (CGF).

Over the weekend, the Herald-Sun reported that Victorians will likely have to pay almost $200 million to Scotland to host the 2026 Games:

Scottish taxpayers will not pay a cent for the 2026 Commonwealth Games, with Victorians picking up the tab.

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Almost $200 million of Victorian money will fund the Games, meaning there will be no need for any money from the Scottish government.

The proposal, which has been backed by the Commonwealth Games Federation, was revealed over the weekend.

In a statement, Commonwealth Games Scotland (CGS) boasted that “£100m-plus of the Victorian government’s money” – or about $194m – would cover almost the entire cost.

It has estimated that the event will cost £114m – about $220m – in total, with Victorian taxpayers forking out millions for city-shaping infrastructure 17,000 km away.

Hilariously, the cited $220 million to host the Commonwealth Games in Scotland is a tiny fraction of the forecast cost of almost $7 billion for the cancelled Victorian Games.

Shadow Minister for Tourism, Sport and Events Sam Groth rightly lambasted the Allan government.

“Jacinta Allan spent $600m of taxpayer dollars cancelling the Commonwealth Games of which $200m will now go to funding those games in Scotland”, he said.

“If Scotland can host the games for less than half of what it cost to cancel them, you have to question this government’s ability to manage money”.

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Victoria could have hosted the Commonwealth Games at a low cost by utilising existing sporting facilities throughout Melbourne and some regional locations. But Teflon Dan wanted to court votes in regional areas.

After a succession of infrastructural failures and rorts, corruption scandals, Covid quarantine blunders, and the world’s longest lockdowns, what else will it take to hold the Victorian Labor Government accountable?

The most unfortunate thing is that Victorians will have to put up with this government until 2026.

By then, we will have become a failing and bankrupt state.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.