According to BBC News, the costs skyrocketed in part because of decisions made by the locals.
CGF said the estimate of A$6bn is double the figure they were advised of at a board meeting last month, and that the increase in costs were due to the "unique regional delivery model" that Victoria chose for the games.
The government had made decisions to include more sports and changed plans for venues, often against the advice of the CGF and its Australian arm, all of which added "considerable expense", it said.
The Australians seem to have shot themselves in the foot on this one and are trying to save face by putting blame on the Commonwealth Games Federation.
Given that this is an event that is scheduled only once every four years, I'm assuming another host will be found rather than just scrapping 2026 entirely. We may see a scaled-down, "budget friendly" Games somewhere else. Skipping 2026 would raise uncomfortable questions about the future of the Commonwealth Games as a whole.