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May 7, 2026 — 5:00am
There are two line items in this week’s state budget which, when put together, raise an appalling scenario.
Is it possible that the next Victorian government, if indeed we have a change of government in November, could scrap a project that has already cost taxpayers $6,683,115,000?
This is the estimated public money which by June 30, will have been sunk into early and tunnelling works for Suburban Rail Loop. This $6.68 billion is the monstrous sum of money that the Victorian Liberal Party, a political organisation notionally steeped in fiscal responsibility, is thinking about setting fire to, as the unpalatable cost of not building the SRL.
I’ll let you in on a little secret of my trade. Normally, whenever you see a dramatic question posed in a headline, the answer is no. I can assure you that this time, however, the question about the future of the SRL is very much alive.
More likely than not, we won’t have a clear answer until Jess Wilson and her transition team shift into No.1 Treasury Place. Before that happens, Wilson will stick to the response she gave ABC Radio host Rafael Epstein when he pressed her the morning after the budget: “… we will pause the SRL and review it.”
What this means, decoded, is that only after Wilson wins government, finds a credibly independent person to examine the contracts and costs of the project, and reveals to the surprise of no one that the oft-stated, $34.5 billion price tag on SRL East is malarkey and Victoria’s won’t get much change from $50 billion, will Wilson say whether construction will continue.
It is remarkable that we are even having this conversation.
Daniel Andrews, having blithely promised before the 2014 election that tearing up the East-West Link contract wouldn’t cost taxpayers a cent, spent $1.1 billion to not build a road the city needed and was never punished by voters. Towards the end of his decade as premier, he spent $589 million to not host this year’s Commonwealth Games after blaming cost blow-outs on an event design of his own making.
These episodes represent the gold and silver medal standard for fiscal vandalism in this state. They involved chump change compared to what Wilson is now contemplating.
Never before, anywhere in Australia, has a government pulled the pin on a major project after tunnel boring machines were already in the ground. It would be a crazy way for a new government to start its term in office.
The alternative is no more palatable. The SRL was cooked up in secret and announced with only sparse details ahead of the 2018 election. It never made sense as a transport project and has been reframed as a housing project built on optimistic assumptions about the number of people willing to pay $1 million to live in a two bedroom, high-rise apartment deep in suburbia.
SRL East is the wrong project, in the wrong part of the city, at a time when the state is already carrying record levels of debt. Its business case only stacks up if the yum cha line planned between Cheltenham and Box Hill is eventually extended to the airport at a further cost of who knows what.
Infrastructure Australia’s latest assessment has convinced Prime Minister Anthony Albanese the project is a goer but even after the federal government makes a further, multibillion-dollar contribution towards it in next week’s budget, it will remain largely unfunded.
Is the Liberal Party prepared to burn $7 billion to save $40 billion? That is the conundrum that awaits Wilson if and when she finds herself in the big office.
If the Coalition won’t scrap the SRL, what else are they planning to fix a budget groaning beneath unsustainable health costs, ongoing cash deficits and an interest bill that by 2029-30 will soak up 10 per cent of all government revenue?
So far, the only savings measure offered by Wilson since the budget was tabled is her cap on public service executive salaries and a restated pledge to tear up the state’s historic treaty and abolish Gellung Warl, a newly established, statutory body representing First Nations people.
Wilson has been no fan of Gellung Warl since the treaty legislation was debated in parliament shortly before she became opposition leader. She spoke eloquently, at the time, about the open-ended nature of its powers and potential for the new body to blur traditional lines of accountability within government.
Her promise to dump it as a cost-saving measure is mean spirited and insulting to Aboriginal people who have spent 10 years working with the Victorian government to gain a greater say over their own affairs.
According to the Parliamentary Budget Office, scrapping treaty would save the state about $100 million a year but this does not account for the cost of a Wilson government establishing its alterative bureaucracy, the prosaically titled First Nations Victoria.
On Friday, Wilson will address a post-budget lunch in Melbourne where she has promised to outline more of her plans, as opposition leader and shadow treasurer, to repair Victoria’s finances.
It is an important speech. By the end of it, we should know whether she is serious, although we won’t learn much more about her SRL intentions.
Albanese and federal Treasurer Jim Chalmers have made it clear that, when it comes to difficult decisions, it is better to ask for forgiveness than seek permission. This is evidenced by their plan to next week announce substantial changes to negative gearing arrangements which, before last year’s election, they promised not to touch.
In this spirit, Wilson is unlikely to seek a mandate to scrap the SRL. But a year from now, the largest infrastructure project in Victoria could well be kaput.
It will be proof that public administration in Victoria is barking mad and perhaps, finally regaining its senses.
Chip Le Grand is state political editor.
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