“This could be the greatest thing that ever happened in Queensland.” If there was a gold medal for pre-Olympic bid hyperbole, then the state’s premier, Annastacia Palaszczuk, is already on the podium.

Amid the excitement about a possible tilt by south-east Queensland at staging the Olympics in 2032, the infamous pictures of abandoned sporting venues in Athens and Rio that have come to symbolise the movement’s reputation for vainglorious waste don’t seem to be putting anyone off in a state already saddled with big debts.

But in many ways there are few countries better placed than Australia to judge the merits or otherwise of hosting the “greatest show on Earth”.

The Sydney Olympics are still relatively fresh in the memories of many people and the physical legacy of the Games is obvious in what was once a derelict, polluted and unloved part of the city. In addition, Melbourne and Brisbane have both hosted the Commonwealth Games in the 21st century, giving Australia unprecedented experience to draw upon.

South-east Queensland – comprising Brisbane, the Gold Coast and the Sunshine Coast – estimates that hosting the Olympics would cost $5.3bn (US$3.6bn), according to a feasibility study by the region’s mayors.

It hopes the International Olympic Committee, which under its reforming management is hoping to eradicate waste, will contribute nearly A$1.7bn amid alarm that the cost of hosting is putting cities off. After the fierce competition faced by London in bidding for 2012, the IOC reforms have streamlined the process and Paris (2024) and Los Angeles (2028) went through unopposed.

The $5.3bn number appears very low compared with the current $12.5bn estimated cost for next year’s Tokyo Games or the similar figure for the 2012 London Games. Holding the 2016 summer Games – with the Paralympics – is widely blamed for shattering Rio’s economy.

Financial questions will always surround the bid, although organisers will point to a Griffith University study showing that the private sector returned 70c for every dollar of the government’s $1.78bn funding for the Commonwealth Games. The state’s GDP grew $2bn thanks to the Games, it said.

The Queensland government believes that it can construct a bid that ticks many of the IOC’s boxes.

“The Olympics is not what it used to be,” a government spokesman said. “The IOC don’t want white elephants, they don’t want another Bird’s Nest [the hugely expensive stadium built for the Beijing Games in 2008 which is now mothballed]. They don’t want cities saddled with debt.”

The argument goes that Queensland is building roads, rail links and housing anyway, not to mention sporting facilities such as a possible aquatics centre needed by a growing population. The Olympics can therefore be built around the city, not the other way around.

The state government claims that 80% of venues for the Games are already built, not least because of the 2018 Commonwealth Games. These include the Coomera sports complex on the Gold Coast, which has a seating capacity of 7,500 and could be used for indoor events such as basketball and handball. Planning suggests that Sydney’s rowing centre at Penrith could be used if a suitable venue could not be found in Queensland. There is also the possibility of renovating the Gabba for the opening and closing ceremonies, although the main athletics stadium is likely to be built from scratch or possibly housed in an upgraded QEII stadium.

The experience of the Gold Coast Games was also crucial. “The Games showed the IOC that Queensland could do big events and do them well, do them under budget and do them safely,” the spokesman said. “They were also impressed by the friendliness of people.”

The 2018 Games are also a cautionary tale, however, with the decision to urge residents to avoid the city during the event backfiring. Joan Carlini, a Griffith business school lecturer, said a study showed 74% of businesses were negatively impacted by the Games and organisers failed to engage properly with communities.

The Olympic bid must “learn the lesson”, she said, adding: “If you are coming into a different town, you can’t think you know more than the local community.”

She also said local businesses had not seen the claimed $2bn revenue from the Commonwealth Games, and warned: “For the Gold Coast Games, people were compliant. But they will be much more sceptical next time.”

A cursory look at previous Olympic bids indicates that the final price tag could end up being at least double the initial estimate. Queensland taxpayers will be hoping the overshoot is not on the epic scale of the infamous 1976 games in Montreal where the cost came in at 13 times higher than forecast, bankrupting the city for years.

Pasquale Sgro, a professor of economics at Deakin University, said that despite public debate often focusing on the financial angle, cost was usually a low priority for bidders.

“These sort of bids are done for lots of reasons such as status and reputation,” Sgro said. “How much money they cost is a long way down the list.

“These sort of large events don’t really make any money. But the public like them apparently. Governments have money to spend so do you spend them on a warship or the Olympics?”

John Fahey, who was chairman of Sydney’s bid in 2000, echoed Carlini’s concerns, warning that organisers have to encourage as much citizen participation as possible. “Do not repeat the extraordinary mistake of the last Commonwealth Games of encouraging the locals to leave the areas of activities,” he said.

Queensland also has to “plan early for facilities for conventions and visitors post the Games. Sydney was 10 years too late with its new convention facilities.”

But he emphasised that it was clear that the state could leverage the prestige conferred by the Olympics “for future tourism and business opportunities”, as Sydney had done.

The question of status runs deep in the Olympic spirit. Queensland believes it has a good story to tell and 2032 is a chance to put the state on the world map.

“Sydney was known around the world, Queensland isn’t. It’s undiscovered,” the government spokesman said. “Australians know it but the rest of the world, not so much. That’s a story we want to tell because we’re pretty proud of where we live.”

But, with a joint North and South Korea bid rumoured to be in the offing for 2032, Queensland will have to tell a great story to win the bid.