Wednesday, 20 March 2024

Commonwealth Games

Sam GROTH (Nepean) (17:02): I grieve for the people of Victoria – that they have a government who think that cancelling a major event at a cost of $600 million is the best decision for the state.

Colin Brooks interjected.

Sam GROTH: It wasn’t $600 million? It was well and truly over $600 million, minister at the table. We know today that the Victorian Auditor-General released his report into the withdrawal from the 2026 Commonwealth Games, and we know that the Premier of this state, Premier Allan, was the chief architect of the botched 2026 Commonwealth Games, which has completely trashed this state’s reputation and has torched that $600 million of Victorian taxpayer money. Those on the other side might not think this, but if bungling major projects and squandering taxpayer funds was a Commonwealth Games sport, well then, the Premier would be a gold medallist. That is exactly what she would be.

This damning report from the Victorian Auditor-General confirmed all the things that we know – that the decisions to bid for, plan and then withdraw from the games have cost Victorians over $589 million with no discernible benefit, and this waste of taxpayer money on an event that will not happen is significant. I do refer to the report and the four key findings that have come from the Auditor-General. The first is the cost of those games. The second is that the Department of Jobs, Skills, Industry and Regions (DJSIR) business case for the games was inadequate. And I do grieve for this state. If the business case for holding a Commonwealth Games is inadequate, what about every other project and the business cases that may have been put together – or may not have been put together at all? How does the state and how do the people of Victoria have any confidence in a government that cannot get a business case right for, as they like to say, a 12-day sporting event? It seems like it is insignificant. You look at the major projects and the blowouts that continue to happen in this state. I grieve for this state. If they cannot get the Commonwealth Games right, how are they going to get anything else in the state right that they currently managing?

We also know, because of the key findings, that the agencies did not work together effectively, so those public sector agencies alongside the Premier’s office – the Department of Treasury and Finance and the Department of Premier and Cabinet – and the minister herself did not work together effectively to give frank and full and timely advice. We also know that that original budget put forward for the games was unrealistically low. At the start it was unrealistically low. At the end the actual costings that the government used to justify a cancellation of the games – and this is from the Auditor-General himself – were ‘overstated’. The $6.9 billion that the government used to justify withdrawing from the Commonwealth Games was overstated. As per the report, that $6.9 billion figure was:

… overstated because it double counts costs relating to industrial relations risks and cost escalation risks.

When the government put forward their $2 billion in contingencies, when they released these fanciful figures, they also included an extra billion dollars. There was $3 billion in contingency costs that were added on top of each other. The government cannot even count its own numbers when it comes to putting forward an amount that the Commonwealth Games was going to cost.

We know that as far back as April the now Premier and this government knew that the cost of running the games was well over $4 billion, significantly more than the $2.6 billion that the Premier herself kept trotting out as a number, including in this place. We know that on 20 April the Minister for Commonwealth Games Delivery, the now Premier, Premier Allan, then the minister, put forward a submission to cabinet to try to get her budget, the budget for the games, lifted to $4.2 billion. Now, $4 billion is a long way from $2.6 billion. That was rejected by cabinet, but they came back with a figure of $3.6 billion. In 2022–23 they had no problem putting a line in the budget for $2.6 billion – absolutely no problem putting that amount in there.

One year later, on 23 May, the budget is delivered – gone. Commonwealth Games – gone. Line item ‍– gone. It is completely missing from the budget, and the $3.6 billion that was put into contingency funds was hidden – hidden in general contingency, hidden away from the Victorian people, hidden away from the people when the Premier was asked in Parliament about the cost of the event. A billion dollars extra does not matter. It would seem that now in this state – I worry about this, and I am sure other members on this side of the house certainly do – when a billion dollars no longer matters, then the people of this state should really have something to worry about.

We know that the Premier misled the Victorian people in this house when she claimed that that cost was still only $2.6 billion, when only a month earlier the cabinet – there is a minister at the table here, the Minister for Planning, who I am sure was sitting in that room – actually approved a larger budget. We also know as per the Auditor-General’s report that the additional funding, as we said, was not shown separately. These are quotes directly from the report:

… not shown separately in the budget papers … not referred to in evidence given to the Public Accounts and Estimates Committee in its May and June 2023 hearings into the Budget.

Not only did they leave it out of the budget papers; they did not refer to it at all during questioning during those PAEC hearings.

This Labor government knew what the real cost of the Commonwealth Games was going to be, and they covered up the figures for their own political purposes. Right from day one the announcement of the Commonwealth Games, a games that was supposed to help regional Victoria, was nothing but a cruel hoax to deliver votes in regional Victoria ahead of the 2022 election. That is why in October, one month prior to the election, the government added new venues across different cities and different towns. They added new sports. They knew they could not deliver the games for the budget, but even so, one month before the election, they continued to ramp up the scale of the Commonwealth Games. They knew exactly what they were doing. The entire process of planning for these games was flawed right from the very start. The business case presented by DJSIR failed to provide adequate information for an informed decision. The government had their own thoughts on this, and they continued to ignore all of the advice, including from the Commonwealth Games Federation themselves.

The Victorian Auditor-General’s Office (VAGO) report also slams the costings in the department’s business case as, at worst, simply unrealistic and misleading. We also know that on 13 June the Premier fronted PAEC and said that the government was making tremendous progress in developing the games. That was 13 June; 14 June she was told that lawyers had been engaged to go about cancelling the games. One day after the games were making tremendous progress, lawyers were being engaged. Either the minister in charge of delivering the Commonwealth Games was not actually across what she should be doing, or as the Deputy Premier at the time and the minister in charge she was being completely kept out of the loop of what was going on within her government by the then Premier.

Let us go forward a month. That is 14 June. Let us go forward a month to 14 July – and this is stated in the VAGO report. The now Premier, as the Minister for Commonwealth Games Delivery, took a submission to cabinet to put the total cost of the games at $4.2 billion. It says:

… the Games could not be delivered for $3.6 billion without abandoning the principle of a wholly regional Games or significantly reducing the number of sports, venues and villages.

On 14 July the now Premier said this can be done for $4.2 billion. The then Secretary of the Department of Premier and Cabinet flew out on 15 July. Cabinet made a decision to cancel the games on 17 July. The announcement of the decision to cancel the Commonwealth Games was made on 18 ‍July, and at that announcement we were told – the Victorian people were told – the cost of delivering those games now would be $6.9 billion or higher, possibly over $7 billion, and there was no benefit to the state to deliver a $7 billion, 12-day sporting event.

I find it hard to believe how when the minister in charge can put in a submission saying the games can be run for a cost of $4.2 billion – and I know the member for Malvern here is a former Treasurer – in three days or four days you can go from $4.2 billion to $7 billion. It seems very, very convenient that an extra $3 billion just might make the announcement a little more palatable to those people in Victoria.

We also know that the government secretly contracted legal services to aid the cancellation as early as 1 June, weeks and weeks before that public cancellation and weeks before the minister in charge, the now Premier, knew. We also know that this government overrode its own initial three-city Commonwealth Games plan for an expanded six-city plan. Doesn’t that sound fantastic – from three cities to six cities ahead of that election. Let us call it what it is: if that is not pork-barrelling, I actually do not know what it is. It is a view shared by the Commonwealth Games CEO Craig Phillips, who said this government’s original plan to host the games in regional Victoria blew out in costs and ‘ran into trouble by playing to local politics in the run-up to an election’.

We know that the Premier favoured friendly unions in the Commonwealth Games village build. We know that there is a briefing document from Development Victoria released to the state opposition under FOI laws that includes a clause which specifies which unions were going to be preferred in the engagement of those contracts. I mean, it is actually endless where this Commonwealth Games debacle goes.

We know the Premier from her own side faced internal attacks and her factional opponents called her the minister for the Fyre Festival. We know that. We know that the Labor government and the Premier leaned on witnesses when they were appearing before the 2026 Commonwealth Games Senate inquiry. The Premier refuses and has refused right from the start. The now Premier, the minister in charge, refused to front the select inquiry over and over and over.

Premier Allan has had so many opportunities to come forward to tell the Victorian people what she knew, when she knew it and what her role was. I would like to see ministers in this state actually start to take responsibility for their portfolios and for their actions. Imagine having ministerial responsibility over the decisions that you make. There is a novel idea. This Premier is allergic to transparency; she is allergic to accountability. She has previously claimed herself that she is not one to cut and run when challenges get hard. Well, I would completely challenge that statement, because the Premier has not fronted up, has not answered questions –

Sarah Connolly interjected.

Sam GROTH: No, she did not answer the questions today. Absolutely she did not answer the questions today, just like every single question we put to her is not answered. The Premier now has bungled the Commonwealth Games, the Melbourne Airport rail link, the Geelong fast rail and the West Gate Tunnel. The Suburban Rail Loop is blowing out. How far do we need to keep going into a list of projects that continue to be absolutely stuffed by this Premier and this government?

There is gross financial mismanagement right across the board. It has ramifications for Victorians. We are suffering from record debt and record taxes at a time when families are doing it harder than ever. Families are doing it hard. Yes, there are things that this government cannot control, things like mortgage stress, but this government should be taking every opportunity to pull the levers that it has available to it to actually make life easier for Victorians, not to continue to put a further burden on them. $600 million – let us call it $589 million. It says over 589 – let us call it $589 million. That is $227 for every single household in this state that this government has literally just torched. They have taken it and torched it. Along with the $600 million, they have torched our reputation. Who would trust this government to do a deal to bring an event to this state? They have absolutely trashed our reputation. And the fact that the Visit Victoria CEO during the Commonwealth Games hearings said that he believed that cancelling the Commonwealth Games actually enhanced our reputation is to me just one of the most absurd statements I have ever, ever heard in my life. You can cancel an event that cost $600 million, a global event, and somehow that will enhance the reputation of the state as an events capital? I mean, I cannot believe that you would actually think that we as a state cancelling an event would enhance our reputation.

Mathew Hilakari interjected.

Sam GROTH: I have never said that; do not put words in my mouth. Life is getting harder for Victorians. They are being punished, and I grieve for this state with the incompetence of this government.