IT cost the state government around $590 million to pull out of the 2026 Commonwealth Games, a recent report finds.

Victorian Auditor-General (VAGO) report found that 60 per cent of the costs came from settling the cancellation of the contract with the Commonwealth Games Federation.

“This waste would have been avoided if agencies had worked together better to give frank and full advice to the government before it decided to host the Games,” the report said.

Before the VAGO report release, locals vented their anger towards the state government at the 2026 Commonwealth Games Bid Parliamentary Inquiry held in Traralgon on Thursday, March 14.

Farnham Court Motel Owner, Katie Reardon, who signed an agreement to host Team England just 24 hours prior to the cancellation announcement slammed the planning abilities of the government in her testimony.

“This cancellation was nothing more than cruel,” she said.

When the government announced that Victoria would withdraw from hosting the Games in July 2023, it stated that the cost of hosting was certain to exceed $6 billion.

Ms Reardon used her past experiences as an event planner to condemn the state government’s lack of planning, stating she would be sacked if her project budget blew out like the state government’s did.

In March 2022, the government approved a gross cost budget of $2.7 billion for the Games with an estimated net cost of $1.6 billion.

The original Games budget was set unrealistically low the report found with the $6.9 billion cost estimate the government publicly released when it withdrew from the Games was overstated.

“The cost estimate for the Games that the government publicly released in August 2023 of $6.9 billion was overstated and not transparent,” the report read.

It added significant amounts for industrial relations and cost escalation risks. But it did not disclose that the budget already included $1 billion in contingency allowances to cover these and other cost risks.

A VAGO report timelined the cancellation of the Commonwealth Games.

In August 2023, Victoria agreed to pay $380 million and signed a settlement agreement with the Games Federation, Commonwealth Games Australia (CGA) and the Commonwealth Games Federation Partnerships.

The VAGO report found that the cost to benefit ratio of the Games were misleading.

Government projects with a benefit-cost ratio of less than 1.0 usually do not proceed.

The business case provided to the government in March 2022 said the Games had benefit-cost ratio of between 0.7 in the worst case and 1.6 in the best case.

However, if all of the speculative benefits and questionable cost reductions were removed, the VAGO found the benefit-cost ratio would have been around 0.59 to 0.95.

The Nationals Member for Morwell, Martin Cameron, has slammed the state government after the report surfaced.

“The Commonwealth Games was spruiked as a huge boom for the Latrobe Valley and regional Victoria more broadly, but the VAGO report has confirmed we were being misled all along,” Mr Cameron said.

“At the inquiry last week we heard from businesses who invested hundreds of thousands of dollars in good faith to prepare for the Games, all to have the rug pulled out from underneath them.

“There is no sign of any of the legacy projects promised for the Latrobe Valley, and all we have received is platitudes and empty promises.

“The Games cancellation has cost Victorian taxpayers nearly $600 million dollars, and Jacinta Allan must be held accountable for her part in this debacle.