The Victorian premier, Ben Carroll, has announced the abolition of a levy secretly applied to public transport fares in the state, which was designed to help pay for the Suburban Rail Loop and other Big Build projects.
Carroll said on Thursday that he would move to abolish the levy “because there was no transparency in its creation and implementation”.
“There’ll be a proper cabinet process to come, but it’s my intention and the treasurer’s intention to abolish that charge,” he told reporters.
“Victorians do deserve better public transport. They also deserve to know what their money is buying. Under my leadership, they will.”
Levy details and auditor general report
The existence of the levy was revealed in an auditor general report tabled in parliament on Wednesday, which also cast doubt on 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 levy, in place since 1 January 2025, imposed a 1% annual increase on all public transport fares in metropolitan Melbourne and regional Victoria, on top of existing adjustments in line with inflation.
Carroll was the public transport minister when the levy was first approved in 2021, according to the auditor general report. But he said on Thursday he was not involved in the decision.
“I was not part of the creation,” he said.
Carroll later said he was not on the state’s four-person budget and finance committee in December 2023, which was when he said the levy had been approved. According to the auditor general report, further decisions about the levy were discussed by government in November 2024, when he had been added to the committee.
Funding impact and government response
According to the auditor-general report, the levy was expected to raise $8bn in today’s dollars over 37 years, with 60% – or $4.8bn – to be directed to SRL East. This would have made the levy the “largest source of value capture revenue” for the project. Under its funding plan, $11.5bn – one-third of the cost of building the tunnel – was to be funded by value capture.
On Thursday Carroll would not say how the $4.8bn shortfall as a result of abolishing the levy would be made up, but noted he had pledged to reduce the project’s cost by $2bn earlier in the week.
The government did not reveal the levy when it announced its value capture model in December, despite naming other sources. The auditor general also said Transport Victoria did not acknowledge the levy in its public communications about the 2025 and 2026 annual fare increases.
The deputy premier, Gabrielle Williams, told reporters she was aware of the levy when she announced an increase to public transport fares in December 2024.
“What I was unaware of was that there … had been any decisions taken about deliberately obfuscating the structure of our fare increases,” Williams said.
She conceded keeping it secret “did not pass the pub test”. Both Williams and Carroll eventually apologised to Victorians when repeatedly asked to by reporters.
The opposition has described the revelation of the secret levy as the “final nail in the coffin” for the government in the lead-up to the state election in November.
