Comm Games leaders didn’t request settlement gag clause

Callum Godde and Tara Cosoleto | August 28, 2023

Commonwealth Games officials did not ask for a gag clause in a $380 million settlement with the Victorian government over the cancelled 2026 event, a federal inquiry has been told.

The Senate inquiry heard from Commonwealth Games Australia leaders in Melbourne on Monday about the circumstances surrounding Victoria’s decision to scrap the Games in July over forecast cost blowouts.

The Victorian government earlier this month agreed to pay Commonwealth Games bodies $380 million in compensation after protracted negotiations.

All parties were legally bound not to speak further on the details under the settlement terms.

Under questioning from Nationals senator Bridget McKenzie, CGA president Ben Houston said the national sports body didn’t ask for the confidentiality clause.

“We didn’t suggest it,” Mr Houston told the committee looking into Australia’s preparedness to host the 2026 Commonwealth and 2032 Olympic and Paralympic Games.

Senior minister Ben Carroll attempted to deflect when asked about the claim.

“We’re going to get on with the job of focusing on everyday Victorians,” he told reporters.

“I’ll let ‘Sports Rorts’ McKenzie get on with her inquiry.”

The confidentiality clause included how much was spent by parties to negotiate the settlement, Mr Houston said.

The state government flew lawyers to London to break the news of the cancellation to the Commonwealth Games Federation.

They remained abroad for settlement negotiations for several days, before returning to Australia to continue talks remotely.

Commonwealth Games chief executive officer Craig Phillips said the federation was unaware of the decision to axe the event until the Victorian officials touched down.

Mr Houston was informed of the cancellation by the federation at about 6.30am on July 18, before Premier Daniel Andrews fronted a press conference later that morning.

Updated business case and costings used to justify the decision put the price tag of hosting the Games at $6.8 billion, up from the original estimate of between $2.5 billion to $3 billion.

Mr Phillips said Games leaders were made aware of some budget pressures for the regional Victorian event as far back as April 18, before the May state budget was released.

“We were involved in some discussions around some measures to actually reduce those costs,” he said. 

Representatives from Ernst & Young refused to disclose how much the big four consulting firm was paid to help prepare the original 2022 business case, citing client confidentiality obligations.

“I don’t accept that,” committee chair and Nationals senator Matt Canavan said.

Mr Andrews last week conceded the original business case was “hardly the greatest piece of work ever done” but the firm was content with its involvement.

“We stand by the quality of our work,” EY partner Leigh Walker said.

The Senate inquiry, which was reopened following Victoria’s decision, called Mr Andrews and former Commonwealth Games delivery minister Jacinta Allan to appear but neither is listed to do so.

Former Victorian sports minister Martin Pakula, Gold Coast Mayor Tom Tate and tourism and event body representatives are also scheduled to front the inquiry on Monday.