Shannon Deery: Iron Lady Allan could be derailed on costly Suburban Rail Loop

When it comes to the Suburban Rail Loop the Premier is proving that she is not for turning, even as internal opposition to the project erupts around her — and it’s shaping as a critical test of her leadership.

“The lady’s not for turning.”

So quipped former British prime minister Margaret Thatcher in the face of fierce internal opposition to her economic policies.

It’s almost absurd to use a Thatcherite motto in reference to Jacinta Allan, but when it comes to her signature Suburban Rail Loop the Premier is proving that she, indeed, is not for turning, even as internal opposition to the project erupts around her.

It is shaping as a critical test of Allan’s leadership.

“The Suburban Rail Loop is the underground train system a growing Melbourne and Victoria needs – connecting every Victorian to jobs, education, hospitals and shopping without needing to change trains in the CBD,” she said on the day the then Andrews government announced plans for the loop just months out from the 2018 election.

“Finally, Victorians will be able to catch public transport across and around the city, taking thousands of people off existing trains and slashing road congestion with up to 200,000 cars off our roads.”

The Suburban Rail Loop is shaping as a critical test of Jacinta Allan’s leadership. Picture: Andrew Henshaw

Allan was public transport minister then, and her view hasn’t changed in the six years since, despite the vastly different position she and the state find themselves in.

At that time Victoria’s net debt was about $21.6bn, it had a triple-A credit rating, and budget forecasts showed an operating surplus of $1.4bn in 2018-19 and an average of $2.5bn a year over the forward estimates.

After almost a term in office, and with the economy in excellent health, a confident Labor announced the SRL with all the hubris of a government marching towards a second term.

Things are very different today.

Victoria is racing toward $188bn in net debt, we’ve lost our triple-A credit, we posted a $2.2bn deficit this year – more than double the government’s predictions – and our health system is in crisis. If anyone argues with that, ask them to explain to you a 75 per cent funding cut for cancer research.

The Andrews-Allan government is now in its third term, tired, increasingly undisciplined and lacking the confidence or freedom it once had to float big, bold infrastructure ideas.

Don’t take my word for it, that is very much the strong view of some inside Allan’s party room who say the time for the SRL is not now.

Even if they have faith in the project as an ostensibly good one, they think its timing is wrong.

Today the cost of the SRL has blown out to at least $125bn. Picture: Suburban Rail Loop Authority

It’s not just Victoria’s position that has changed. So has that of the SRL. When it was announced it came with a $50bn price tag – for the entire 90km loop around Melbourne.

Today the cost has blown out to at least $125bn, with the government committed only to the first stage, the southeast section that will run underground between Cheltenham and Box Hill, with new rail tunnels linking the Frankston, Cranbourne-Pakenham, Glen Waverley and Belgrave-Lilydale lines.

That part will set us back $34bn.

Insiders are now asking why taxpayers in Mildura, Warrnambool and Shepparton should be slugged with more than $100bn of intergenerational debt for a rail project that the residents of Cheltenham are not even sure they want, and Infrastructure Australia is not sure stacks up.

Support from the federal government is less than forthcoming, and any private investment is not yet known.

A wide range of northern and western suburbs ministers and MPs, including Ben Carroll, have raised real concerns about the affordability and viability of the project. They feel it is restricting the government’s ability to spend in vulnerable electorates including seats in its traditional heartland areas.

Last week SRL Minister Danny Pearson met with MPs from the west who voiced their concerns. Picture: Nicki Connolly

Last week SRL Minister Danny Pearson met with MPs from the west who voiced their concerns.

They say the SRL has placed too much focus on the southeast, leaving them little to nothing to offer their constituents in the lead-up to the 2026 election.

And for them, it means the SRL could make or break their personal re-election chances.

For it to have that impact on the government as a whole would be less likely, given its significant majority.

And also the fact that Opposition Leader John Pesutto has effectively wedged himself on the issue by opposing it but committing to honour any contracts already in place if he becomes premier.

It could leave him in the position of having to deliver a project he does not support.

The Premier sent a strong message to colleagues at the weekend, reiterating that the SRL had been endorsed by Victorians at successive elections.

She is standing by it, and insists that it is a project Victoria cannot afford to delay.

But amid the internal turmoil, we could look back at the winter of 2024 as the moment it started to fall off the rails for the Allan government.

So while she might not be for turning on SRL, Jacinta Allan may yet be forced to do so.

She just doesn’t know it yet.

Shannon Deery is state politics editor