The Victorian auditor-general’s report tabled in parliament on Wednesday says funding for the Suburban Rail Loop ‘is not transparent’. Photograph: Joel Carrett/AAPView image in fullscreenThe Victorian auditor-general’s report tabled in parliament on Wednesday says funding for the Suburban Rail Loop ‘is not transparent’. Photograph: Joel Carrett/AAPVictorian government secretly increased public transport fares to help pay for controversial Suburban Rail LoopLabor put ‘levy on all public transport fares in metropolitan Melbourne and regional Victoria’ since January 2025, auditor-general says
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 26km 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 $11.5bn from both the Commonwealth and state governments and $11.5bn 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 1 January 2025.
The levy involves a 1% annual increase on all public transport fares on top of existing adjustments in line with inflation.
Estimated cost of the entire the Suburban Rail Loop when announced by Daniel Andrews in 2018
Length of the loop, which would run from Cheltenham in Melbourne’s south-east to Werribee in the west, via Melbourne airport
Cost of stage one of the loop, dubbed SRL East, as promised by new premier Ben Carroll on 25 August 2026. It was estimated to cost $30-34.5bn in 2021
Worth of contracts signed, according to Labor’s May budget
Length of SRL East, which runs from Cheltenham to Box Hill
stimated cost of building SRL East and SRL North, the second stage of the project, based on a 2024 Parliamentary Budget Office analysis
Estimated cost of operating SRL East and North for 50 years, according to PBO
SRL North, which runs from Box Hill to Melbourne airport, due to open
Completion of SRL West, the final stage of project, running from Sunshine to Werribee
“The government plans to allocate 60% of the revenue it collects through the levy, estimated at $4.8bn in net present value (NPV) terms to 2062, 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 2025 and 2026 annual fare increases. As at June 2026, 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 2035 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 $34.5bn”.
