On July 21 2023 Daniel Andrews said he had known “for months” that the Commonwealth Games were going to cost Victoria more than the $2.6 billion allocated in the state budget. He put the real cost at $6-7 billion, the figure reached by the Department of the Premier and Cabinet, Treasury and Finance. How they arrived at this amount the Victorian public has not yet been allowed to know. On the basis of the cost blowout, Andrews abruptly cancelled the games.
The same day that Andrews made his announcement, the ‘Age’ newspaper reported that Commonwealth Games bureaucrats and Treasury officials knew in April that the cost had blown out to double the original $2.6 billion. The Commonwealth Games Federation (CGF) was told the games were being cancelled via Zoom conference only a hour before Andrews made his announcement. The $6-7 billion quoted by Andrews completely ‘blindsided’ games officials in Australia and the UK. At no point had they been told the real cost could be much higher than $2.6 billion. According to Kereyn Smith, the CGF vice-president, “the last time there was any conversation at the board table around figures it was getting up towards $3 billion. Certainly $6-7 billion was not something we had ever heard.”
The truth was also hidden from the Victorian parliament. On June 8, 2023, not months but less than six weeks before Andrews spoke, Harriet Shing, his factional and cabinet colleague and ‘Minister for Commonwealth Games Legacy’ among other responsibilities briefed the Public Accounts and Estimates committee inquiry into the 2023-24 budget on the basis of the games costing the original estimate of $2.6 billion.
There are only two possibilities here. Either Ms Shing knew the real cost of the games or she did not know. If she did not know, she also had been blindsided by Andrews. If she did know, she was not prepared to tell the committee the true cost.
Harriet Shing is the first openly LBGTQ member of the Victorian parliament. Her personal relationship with her partner Lissie Ratcliff is her own business but still relevant to what she did or did not know. Since 2016, Ms Ratcliff has been chief of staff of the Department of Premier and the Cabinet. In an article headed ‘The chosen few: how Victoria is really governed,’ the ‘Age,’ on August 14, 2021, described Ms Ratcliff as “arguably the most influential woman in Victorian politics.” She reportedly met the ‘preferential whisperer’ Glenn Druery before the state elections. When Health Minister Helen Mikakos was forced to resign in 2020 – in the aftermath of the hotel quarantine inquiry– she accused Ratcliff of trolling her. In 2021, the premier’s department was said to employ 286 full-time equivalent staffers, about 90 of them reporting directly to the premier’s private office. Lissie Ratcliff is their immediate boss and gatekeeper for direct access to Andrews.
The first question here is whether Ratcliff, the most senior bureaucrat in the premier’s department, knew of the cost blowout, and the second, if she did know, is whether she tipped off her partner, which seems likely given the nature of the personal relationship and Ms Shing’s responsibility for organising the games.
What can be said with certainty, on the basis of Andrews’ admission that he had known the true cost of the games “for months”, is that the truth was hidden from the accounts and estimates committee on June 8, either because Ms Shing did not know it herself or because she did know and was concealing it until Andrews was ready to go public.
In her evidence to the committee Ms Shing painted a rosy picture of the ‘legacy benefits’ to flow Victoria’s way before, during and after the games. She carefully avoided specifics, though, apart from her references to the $2.6 billion. The games would be world class, inclusive and unforgettable. They were an opportunity to create and deliver housing infrastructure, community facilities, jobs and pride of place right around the state. $3 billion would be contributed to Victoria’s economy, with 7500 jobs created before, during and after the games: $800 million was in the pipeline for procurement opportunities, with more than 1200 contracts “up for grabs.”
These positive estimates were reinforced by a Pricewaterhouse Coopers (PwC) analysis of economic benefits flowing from previous games. Every dollar spent by the government generated $2 for the host city or state economies with an average of 18,000 jobs being created and long-term improvements in transport and other infrastructure.
After the games, Ms Shing told the committee, the athletes’ villages could be moved to other parts of the states to “address other needs.” Even the swimming pools could be removed. While the federal government had provided no funding, she hinted that it might still be available “through multiple budgets, which is why those conversations are continuing with the Commonwealth.” The games partly depended on financial input from regional councils but as one member of the budgets committee pointed out when questioning Ms Shing, Geelong and Ballarat had already indicated they were “financially stretched” and would be unable to make any contribution.
According to its own propaganda, since removed from the vic.gov.au web site, the games “would be bringing an action-packed sports program to our regional cities and delivering a long-term legacy for our future.” Millions of viewers would be attracted and thousands of jobs created. First Nations and other communities would be involved in the planning. The economic benefits to the state were central to planning for the games yet when when cancelling them Andrews said without explanation that they were “all cost and no benefit.” They were certainly a vote-winning benefit in regional Victoria ahead of the 2022 state elections.
The propaganda was still being pumped out when Andrews knew the cost would be far greater than $2.6 billion and may already have decided that the games would not go ahead. Even before the May budget, his government’s Office of the Commonwealth Games had submitted a business plan to Treasury asking for $5 billion in funding, so Andrews was aware even then that it was most unlikely the games could be staged for $2.6 billion.
Andrews been advised not to stage the games regionally but to hold them in Melbourne so that existing sporting infrastructure could be used, saving money, but clearly he wanted to make a splash ahead of the state elections and insisted on his regional plan. “There was a real determination that these were state games and not Melbourne games,” says Kereyn Smith. “They were for economic development, for growth and infrastructure in regional Victoria. Everyone knew this would involve extra costs.”
How much this has already cost the taxpayer in feasibility studies, travel, consultations with regional councils and sports bodies and the salaries of those hired to organise the games, from games ‘Commander in chief Jeroen Weimar’ down, and how much will have to paid in compensation to the Commonwealth Games Federation is all unknown. It would be a mistake to see this cost blowout as an aberration because it is typical of the undercosting of all major infrastructure projects set in motion by the Andrews government. Andrews has a long history of plunging into grandiose projects that grab the headlines, that add to the state’s already massive debt and later turn out to have no business rationale.
The Andrews government has increased the state debt from about $23 billion in 2019 to an estimated $170 billion by 2026. The taxes now raised across the board are chicken feed compared to the amount owed. Interest alone is costing Victorians nearly $4 billion a year, close to five per cent of total revenue. Victorians will be paying this debt off for decades after Daniel Andrews has gone, which in the wake of Commonwealth Games shambles, commentators are saying, is likely to be sooner rather than later. The problem for the ALP is that Andrews’ likely successor, deputy premier Jacinta Allan, has been involved in planning for the games from the start. Calls were soon being made for her resignation.
Clearly it is Andrews who should go before anyone but he has a long track record of allowing responsibility to be shifted to other shoulders. It is also typical of the man that he has refused to apologise to the athletes, to the sporting organisations and regional councils, and to the businesses involved in planning for the construction of villages and sporting facilities or for the delivery of basic amenities.
Kereyn Smith, the New Zealand-based CGF vice-president, said she felt treated with disrespect by Andrews and questioned his integrity. Many Victorians feel the same way. Many others have come to loathe him. Even for Andrews’ diehard supporters the mask has finally slipped. After years of fiscal irresponsibility, destruction of small businesses and police state suppression of those opposing him, the greatest ‘legacy benefit’ for Victoria from the abandonment of the Commonwealth Games may be the final exit of the Mulgrave Mussolini from political life.
