Anthony Albanese’s $2.2bn SRL promise to be probed by Commonwealth auditor general

Jacinta Allan has responded angrily to a looming investigation into the “secrecy” of the federal government’s Suburban Rail Loop funding pledge.

The Australian auditor general says there’s merit in opposition concerns over Anthony Albanese’s SRL election promise.

Not a cent of federal taxpayer money earmarked for the contentious Suburban Rail Loop project will be spent in the next year, amid a probe into Anthony Albanese’s $2.2bn election commitment.

The nation’s Auditor-General, Grant Hehir found “merit” in federal opposition concerns about the promise.

However, Victorian Premier Jacinta Allan has taken aim at Coalition transport spokeswoman Bridget McKenzie, who made the referral, saying Senator McKenzie “gave us nothing but rorts instead of sports” when she was a minister.

Jacinta Allan took aim at federal opposition transport spokeswoman Bridget McKenzie. Picture: Diego Fedele

Infrastructure Department officials said the audit, which will investigate the advice given and the process for allocating funding to the state, was in the “very early stages”. The audit will be due in September.

“It would be unlikely that any money would be expended before the review is completed,” deputy secretary of infrastructure Jessica Hall said. “The profile for Suburban Rail Loop doesn’t have any money going out in the next 12 months.”

A Senate committee heard that no payments would be made until the Victorian government submitted a project proposal report to the federal government. This would identify milestones the Commonwealth funding contributions could be tied to.

Department secretary Jim Betts said talks were not at a stage where the audit would affect the submission.

Assistant Infrastructure Minister Carol Brown said the government was supportive of the project.

Ms Allan rejected suggestions the referral could undermine her government’s ability to ask for more federal funding in the future.

“We will continue to push on and deliver the SRL,” Ms Allan said. In a swipe at Senator McKenzie, Ms Allan said: “When her and her government were in power for nearly 10 years, they didn’t just consistently short-change Victoria when it came to infrastructure investment, they completely dudded us time and time again.”

But Senator McKenzie said Ms Allan could not manage projects or money and it was “beholden” on the Auditor-General to “ensure that Commonwealth taxpayers aren’t being taken for a ride”.

Senator Bridget McKenzie says Jacinta Allan can’t manage projects. Picture: Martin Ollman

“If Premier Allan thought this was such a fantastic project, she needs to submit her paperwork so we can actually get some Commonwealth funds flowing for it, because right now, there is no business case before the Commonwealth government and there will be no Commonwealth money flowing to this project until there is,” she said.

State opposition transport infrastructure spokesman David Southwick said there were “serious doubts” about whether the government could fund the project.

The Australia National Audit Office has proposed investigating whether the federal infrastructure department provided appropriate advice to the government on the allocation of funding to Suburban Rail Loop East.

It will also consider whether established processes for allocating infrastructure funding to the state were followed in order to protect the Commonwealth’s interests and achieve value for money.

The report is due to be tabled in September.

Concerns over $2.2bn SRL election pledge

Anthony Albanese’s $2.2bn commitment to Victoria’s contentious Suburban Rail Loop is set to come under the microscope of the Commonwealth spending watchdog.

Auditor-General Grant Hehir is expected to launch a probe in the first half of this year after finding “merit” in opposition concerns about the election pledge.

In a letter seen by the Herald Sun, Mr Hehir says the audit would assess whether the funding approval was informed by “appropriate departmental advice” and whether appropriate steps were taken to “protect the Commonwealth’s interests and obtain value for money”.

“The Auditor-General is set to blow open the secrecy and lack of due process of Labor’s eye watering $2.2bn spend on the Suburban Rail Loop,” opposition transport spokeswoman Senator Bridget McKenzie said.

“Given the scathing assessment of the project itself by Victorian Auditor-General’s Office and the Victorian Ombudsman, I hope the Australian National Audit Office investigation will uncover if there was a failure of due process in federal government decision making.

“Minister (Catherine) King should be very concerned about the outcome of this audit given the financial exposure she has subjected Australian taxpayers to.”

An artist's concept of a Suburban Rail Loop at Cheltenham. Source: Suburban Rail Loop Authority

In late December, Senator McKenzie wrote to Mr Hehir about the massive shortfall in funding for the $35bn first stage of the project.

The Victorian government, which has committed $11.8bn, is seeking an extra $9bn from the Commonwealth.

It is also chasing major funding through levies and taxes on land in the area that increases in value — known as “value capture”.

“By commencing construction with the support of the Australian government, there is a very high financial risk exposure to future Commonwealth governments of being required to make additional contributions to finalise delivery of the project in order not to void initial investments,” Senator McKenzie wrote.

The Victorian Auditor-General’s Office last year raised serious concerns about how the first stage of the loop will be funded, after previously finding that the government’s business case did not stack up.

Infrastructure Minister Catherine King in November said she wanted to “get a much better handle on the costs” before any further money was committed.

However, she has long-maintained that the first phase “well and truly stacks up”.