The Victorian government secretly increased public transport fares to raise money to help pay for the Suburban Rail Loop and other Big Build projects, the state’s auditor-general has revealed.
The auditor-general’s report, tabled in parliament on Wednesday, also questioned whether the first stage of the multibillion-dollar project – a ۲۶km stretch of twin tunnels from Cheltenham to Box Hill dubbed SRL East – can be delivered on time or within budget.
The auditor-general found the plan to fund SRL East – via $۱۱.۵bn from both the Commonwealth and state governments and $۱۱.۵bn through so-called value capture methods – “is not transparent and some funding sources are uncertain.”
It said in December, the government announced five value capture measures: using existing land tax and windfall gains tax revenue in SRL East precincts, infrastructure contributions from property developers, revenue from state-initiated property development and a car parking levy.
But the auditor-general said the government did not reveal it had already introduced a levy on all public transport fares in metropolitan Melbourne and regional Victoria on ۱ January ۲۰۲۵.
The levy involves a ۱% annual increase on all public transport fares on top of existing adjustments in line with inflation.
Quick Guide
Victoria’s Suburban Rail Loop – in numbers
Show
$۵۰bn
Estimated cost of the entire the Suburban Rail Loop when announced by Daniel Andrews in ۲۰۱۸
۹۰km
Length of the loop, which would run from Cheltenham in Melbourne’s south-east to Werribee in the west, via Melbourne airport
$۳۳.۳bn
Cost of stage one of the loop, dubbed SRL East, as promised by new premier Ben Carroll on ۲۵ August ۲۰۲۶. It was estimated to cost $۳۰-۳۴.۵bn in ۲۰۲۱
$۱۴.۵bn
Worth of contracts signed, according to Labor’s May budget
۲۶km
Length of SRL East, which runs from Cheltenham to Box Hill
۲۰۳۵
The year SRL East is due to open
$۹۶.۴bn
stimated cost of building SRL East and SRL North, the second stage of the project, based on a ۲۰۲۴ Parliamentary Budget Office analysis
$۱۲۰.۲bn
Estimated cost of operating SRL East and North for ۵۰ years, according to PBO
۲۰۵۳
SRL North, which runs from Box Hill to Melbourne airport, due to open
Date and cost unknown
Completion of SRL West, the final stage of project, running from Sunshine to Werribee
“The government plans to allocate ۶۰% of the revenue it collects through the levy, estimated at $۴.۸bn in net present value (NPV) terms to ۲۰۶۲, to fund SRL East,” the report reads.
“This levy will be the project’s largest source of value capture revenue.”
“The government and Transport Victoria did not acknowledge the levy in their public communications about the ۲۰۲۵ and ۲۰۲۶ annual fare increases. As at June ۲۰۲۶, they still have not announced it.”
The report also revealed the project has already “experienced significant delays” of up to six months on early works and station contracts are yet to be awarded, putting at risk its promised ۲۰۳۵ completion date.
It said the “on the evidence available to date” the project is “more likely than not to exceed its publicly disclosed cost of up to $۳۴.۵bn”.
More details soon …
