Victoria state Premier Dan Andrews said the cost of the Games, which were to have been held in four regional hubs, could blow out to more than A$7 billion ($4.8 billion) from a budgeted A$2.6 billion if they went ahead.
“Frankly A$6-A$7 billion for a 12-day sporting event, we’re not doing that,” Andrews said at a media conference.
“I will not take money out of hospitals and schools to fund an event that is three times the cost as estimated and budgeted for last year.”
Andrews said Victoria had already informed the global governing body Commonwealth Games Federation (CGF) in “amicable meetings” but the cost of breaking the 2026 contract was yet to be decided.
The CGF and local governing body Commonwealth Games Australia did not provide immediate comment.
The sporting event for mostly former British colonies has struggled to remain relevant, with four of the last five editions held in Australia or Britain.
English city Birmingham stepped in to host the 2022 Games after South Africa were stripped of them in 2017 over a lack of progress in preparations.
Victoria stepped in to bid for the 2026 Games when no other countries showed interest.
Officials had talked up the legacy benefits from new infrastructure in the regional hubs of Geelong, Ballarat, Bendigo and Gippsland, and an economic boost of more than A$3 billion from tourism and thousands of new jobs.
“As a state, of course we were willing to help out, but of course not at any price and only if there were lasting benefits for Victorian communities and benefit for the whole state,” Andrews said.
The government would instead spend more than A$2 billion on a “regional package” which would include building all permanent sporting facilities intended for the Games, along with A$1 billion earmarked for social and affordable housing.
Soon after the announcement, Australian sport officials were touting the country’s largest state of New South Wales as an alternative host for 2026.
NSW state capital Sydney hosted the 2000 Olympics.
“There’s no question we’ve got the venues … and March would be a good time to host it,” John Coates, an International Olympic Committee Vice-President and former Australian Olympic Committee boss, said in comments published by Sydney’s Daily Telegraph .
“I’d love to see it come here … The sports have the ability to organize it.”
