A report by the Victorian Auditor-General's Office into Melbourne's Suburban Rail Loop on Wednesday revealed a previously undisclosed levy was placed on all public transport fares in metropolitan Melbourne and regional Victoria.
SRL is a planned 90km orbital line stretching from Cheltenham in Melbourne's southeast to Werribee in the outer-west via the airport at Tullamarine.
The 26km eastern section from Cheltenham to Box Hill is slated to cost up to $34.5 billion, with a target delivery of 2035.
A third of project's total cost was expected to come from "value capture", such as elevated land tax revenue.
The state Labor government unveiled its five value-capture mechanisms in December but the announcement did not disclose a rail improvement charge, Victorian Auditor-General Andrew Greaves found.
The charge was introduced as an annual one per cent increase in fares, on top of yearly inflation rises, from the start of 2025 to raise new revenue to fund SRL East and other Big Build projects.
It was also not acknowledged by the government or Transport Victoria in their public communications about fare increases in 2025 and 2026.
"The government plans to allocate 60 per cent of the revenue it collects through the levy, estimated at $4.8 billion in net present value terms to 2062, to fund SRL East," the report read.
"This levy will be the project's largest source of value-capture revenue."
Total revenue collected from the charge between January 2025 and the end of February 2026 was $6.2 million.
Public transport fares in Victoria have since been made free for certain commuters and half-price for all others in 2026.
While having relatively small impacts on fares initially, the report noted annual rate increases were expected to ramp up over the medium to long term and grow revenue exponentially.
Treasurer Colin Brooks, who was sworn into the role in early August, denied the charge was part of SRL East's value-capture system and said he was first made aware of its existence by the auditor-general.
"We could have been more transparent about how we're investing that money," he told reporters.
"That charge is not contributing directly to the Suburban Rail Loop."
Opposition Leader Jess Wilson directly blamed Premier Ben Carroll, who was public transport minister in 2021 when the charge was approved.
"The government knows that this tax would have never been accepted by Victorians," she said.
"So instead of being up front, taking it to an election, they hid it and they lied to Victorians.
"This is just the final nail in the coffin for this government."
The report also revealed SRL East's 2035 target completion date was "at risk" due to delays and suggested the project was "more likely than not" to exceed its publicly disclosed cost.
Mr Carroll on Tuesday promised to find $2 billion in project savings.
Victorians head to the polls in November.
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