Report suggests Labor’s Big Build has hit a ‘dead end’

The $35bn Suburban Rail Loop should be ditched to avoid a disastrous situation, a think tank says.

Victoria’s Big Build is at a “dead end” and the government should ditch the $35bn Suburban Rail Loop and create a new business model for the economy, a think tank says.

The Australian Population Research Institute has released a report warning that Victoria’s current population trajectory, which includes eight million people in Melbourne, would be a “disaster” without new industry development.

It says the state now has an international goods trade deficit of almost $12,000 per person, meaning Victoria’s imports far exceed its exports.

This is largely due to a merchandise trade deficit, but while Victoria aimed to generate an alternative international trade surplus in services, “the sad truth is that this is not the case”.

The think tank says the Allan government should ditch the rail loop.

Even with overseas students propping up the services sector, there is still a small deficit in trade in the most recent available year of data, 2022-23.

“The state needs another direction that at least holds out the prospect of a more productive and economically sophisticated future,” it says.

“A new industry policy is a plausible, though expensive, alternative, but only if the state’s investment capacity is freed from the financially crippling burden of the Big Build.”

The report, called Labor’s Big Build Hits a Dead End, says the SRL, which is an orbital rail loop between Cheltenham and Werribee, did not consider alternative options for transforming middle Melbourne.

The report says the state needs to be freed from the ‘financially crippling burden of the Big Build’. Picture: Wayne Taylor

“There is something to be said for enhancing middle suburbia business hubs, as around stations like Glen Waverley and Box Hill,” it says.

“But, the business case for the SRL did not consider whether a vastly cheaper and more flexible extension of bus services could have satisfied the need for extra transport capacity to these hubs.

“Even more important, the business case did not explore alternative uses of the investment funds, as with contributing to the state’s renewable energy transition or with a revived state hi-tech industry policy.”

The report slams the commonwealth for failing to provide adequate funding to Victoria while happily turbocharging population through migration, and said its Future Made in Australia policy “does not spend a penny in Victoria”.

“We are not claiming that there can be a quick fix,” the report says. “Nevertheless, it is urgent that some alternative direction to the state’s Big Build policy agenda be nurtured, whether it be with focused industry policy or some other option.

“This cannot happen, however, if the state continues down the Big Build pathway and, in the process, squanders billions of dollars on low-productivity, capital-broadening economic activity.

“A new industry policy must be initiated. Otherwise, Victoria’s outlook is that of a mendicant state propped up by federal handouts.”