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Premier Jacinta Allan was warned four months before abandoning the 2026 Commonwealth Games that almost $2 billion extra would be needed to host the event in five regional cities in Victoria.

The details have emerged in a leaked statement from the Department of Jobs, Skills, Industry and Regions, obtained by The Age.

Premier Jacinta Allan in parliament last week.Credit: Eamon Gallagher

The statement is due to be presented to an upper house inquiry on Monday. Department secretary Tim Ada is expected to step through the timeline.

In his evidence, Ada is expected to slam the original business case, prepared by Ernst & Young before Victoria committed to host the Games, which “did not reflect the true cost of delivering a sporting program spread across five hub cities” and failed to factor in the rising cost of construction.

Allan, then the minister for Commonwealth Games delivery, and then premier Daniel Andrews cancelled the 2026 regional Games on July 18, blaming an almost three-fold blowout from $2.6 billion to almost $7 billion.

“In early March 2023, the department briefed [Allan] the Minister for Commonwealth Games Delivery on revised budget requirements to deliver the Games,” the department statement said.

“An updated gross budget estimate of $4.5 billion was not approved, with the department asked to further explore opportunities to reduce costs while still meeting the government’s commitment to host the Games in regional Victoria.”

That was three months before Allan told the parliament’s public accounts and estimates committee on June 13 that the government was making “tremendous progress” on the Games. Allan last week said she was told a day later that Andrews was calling in lawyers for advice on axing the Games. She has rejected accusations from the opposition she misled parliament.

The department then began preparing a submission, which in June asked for an extra $4.2 billion to deliver the 12-day event and provided “significant cost reduction options”. Other departments had identified additional costs and risks, the submission warned.

Games-related expenditure by the Department of Jobs, Skills, Industry and Regions alone is expected to reach $200 million, on top of the $380 million compensation package and sunk costs from other departments.

The government is proceeding with $2 billion worth of legacy sporting infrastructure and social and affordable housing.

The Department of Premier and Cabinet and Victoria 2026 are among others giving evidence on Monday.

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