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Andrews coy on Commonwealth Games cancellation cost

Victoria may be hit with a huge compensation bill for cancelling the Commonwealth Games, but under-fire Premier Daniel Andrews has refused to be drawn on the likely amount.

Former Queensland Premier Peter Beattie, who chaired the Gold Coast Commonwealth Games, warned it wouldn’t be easy for Victoria to break its “tight contract”.

About a decade ago, the Queensland government investigated the cost of axing the 2018 Commonwealth Games on the Gold Coast and determined it to be more than $1 billion.

But it could be higher for Victoria given skyrocketing inflation and the limited time for organisers to find a replacement host.

Victoria has renounced hosting the Games in 2026, citing a forecast cost blowout from $2.6 billion to up to $7 billion.

The Victorian government confirmed big-four consultancy firm Ernst & Young was involved in the initial $2.6 billion estimate outlined in the last year’s state budget and the latest business case will be released, subject to legal advice.

The updated costing has been fiercely disputed by organisers, who claim the state government ignored money-saving options such as moving the event to Melbourne.

Mr Andrews was in the regional Victorian town of Maryborough on Wednesday to spruik the $2 billion package designed to placate regional centres that will miss out on an expected Commonwealth Games bonanza.

The package includes a $1 billion regional housing fund to build 1300 new homes, a $150 million tourism and events fund and $60 million for regional tourism infrastructure.

“This is the best way forward, permanently,” Mr Andrews said.

“To get on and deliver the legacy from the original budget that is sitting there and waiting to be invested. I can’t think of a better way to invest that and in housing, housing and more housing.”

He refused to publicly argue with organisers amid ongoing discussions with leaders of the Commonwealth Games in London to terminate the Victorian contract.

“I’m not going to enter into a quarrel, an argument, with those people,” he said.

“Some of the people who have been very critical, they’re not funding it.”

Daniel Andrews faces heat over Games axing

But he said even abandoning a much-touted plan to host the 12-day event in regional towns and cities and move it to Melbourne would have cost Victoria $4 billion.

Victoria’s tourism industry has welcomed the $150 million funding boost, but said it didn’t go far enough.

“Of a total $2 billion package, $150 million is simply inadequate for an industry that was banking on lasting benefits of visitation, tourism packages, infrastructure, better transport links and the global exposure for our regions,” Victoria Tourism Industry Council chief executive Felicia Mariani said.

“What Victoria desperately needs is game-changing infrastructure projects that will move the needle on the success barometer for our sector and leave a lasting legacy in positioning Victoria to global consumers who are seeking immersive and memorable experiences on their travel bucket list.”

Victoria’s regional councils also gave the funding plan conditional approval.

“There is no doubt that the decision to cancel the Commonwealth Games was a shock, and very disappointing for regional communities. We welcome the Victorian government committing to delivering on some of the promised legacy, directing funds into boosting housing, tourism, and sporting groups in country communities,” Regional Cities Victoria chair Cr Andrea Metcalf said.

“While nothing can match being broadcast into billions of lounge rooms around the world, we look forward to working with the Victorian government to attract more visitors to regional Victoria, sell more Victorian grown and made products to Australians, and support the massive population growth across our regional cities.”

Cr Metcalf said a lack of housing meant regional businesses couldn’t attract workers they needed, and locals were increasingly priced out of markets.

“These new investments in workers accommodation and social and affordable housing are very welcome,” she said.

Victoria’s billion-dollar cancellation bill

The cost of breaking the Games contract is yet to be settled but Mr Andrews pledged to report the final cost.

He refused to speculate on the scope of compensation that could be paid for reneging on the contract or say how much taxpayer money had already been spent preparing for the now-cancelled Games.

No direct apology was offered to the 5000-odd athletes who were expected to compete across more than 20 sports.

“I’m sorry we find ourselves here … but I’m not going to apologise for taking money out of hospitals and schools,” Mr Andrews said.

It’s not the first time the Andrews government has spent taxpayers’ money to break a signed contract.

A $642 million termination settlement was paid out to scrap Melbourne’s East West Link road project despite Mr Andrews declaring the contract could be ripped up at no cost before the 2014 state election.

State Opposition Leader John Pesutto said paying out compensation to the federation was an inevitability and called for Mr Andrews to consider his position.

-with AAP

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