Victorian Treasurer Tim Pallas records $12.14bn in treasurer’s advances to prop up courts, health

Treasurer Tim Pallas has racked up more than $12bn on the government little-known ‘credit card’ — called a Treasurer’s Advance — exhausting the fund historically set aside for emergencies.

The state government has exhausted a $12bn taxpayer fund set aside for emergencies, pouring billions of dollars into its Big Build agenda.

The Herald Sun can reveal at least $12.14bn has been used through the government’s secretive government “credit card”, called a Treasurer’s Advance, in the last financial year.

The government had set aside $12.1bn for the fund, raising questions about whether it has overspent about $40m.

Use of the money is expected to be probed when the parliament’s Public Accounts and Estimates Committee sits this week, however publicly available documents show it has been used to inject money into the state’s struggling court system, prop up health services funding and ensure sufficient cash was available to spend on major events.

Victorian Treasurer Tim Pallas has made increasing use of treasurer’s advances. Picture: David Crosling

As revealed by this masthead on Sunday, billions of dollars have also been used to keep the government’s signature Suburban Rail Loop project on track.

More than $5bn was spent on infrastructure including $1.3bn for the SRL East major works, and an extra $184m for the SRL East’s early works, both of which are listed in the State Budget.

Almost $800m was allocated to the Department of Education, $738m to the Department of Jobs, Skills, Industry and Regions, and $1.8bn to the Department of Health.

Insiders say Victoria’s financial woes have contributed to a growing reliance on Treasurers’ advances, but it also reduces parliamentary scrutiny of decisions and major projects.

The government is struggling to secure funding for the SRL, its signature project, with the Federal Government yet to hand over $2.2bn it promised to contribute to the project.

On Monday, the Herald Sun revealed Peter Dutton would make the Suburban Rail Loop a central issue at the upcoming federal election, calling for it to be ditched and the $2.2bn in promised federal funds redirected to the state’s crumbling roads.

Victoria is pushing ahead with major projects such as the Suburban Rail Loop. Picture: Supplied

Independent economist Saul Eslake has called for an investigation into the over reliance on the Treasurer’s Advances.

“It is clearly an inappropriate use of the Treasurer’s Advance, and one which ought to be investigated by the Auditor-General,” Mr Eslake said of using the money to prop up the SRL.

“It was fair enough to provide a substantial ‘contingency fund’ to meet urgent and unforeseen spending needs during the pandemic, but that ended more than two years ago.”

Current and past ministers have expressed surprise at the advances being used for items already listed in the State Budget, but a spokesman for the Treasurer said they were sometimes used when project milestones were hit after budget legislation was enacted.

The Herald Sun put questions to the state government last week asking precisely how much money had been allocated for Treasurer’s Advances for 2023-24.

Questions were also submitted asking whether the reported $12.1bn allocation could be exceeded.

The government refused to answer the specific questions, instead a spokesperson said: “Treasurer’s Advances are routinely used by the Government for urgent or unforeseen events.”

“Funding in Treasurer’s Advance contingency is also for projects and programs that are funded in the Budget,” he said.

The spokespersons said funding allocations to departments were set by the annual Appropriation Bill.

If a project milestone is achieved after the Appropriation Bill is passed, the legal mechanism to transfer the funds for the current financial year to a department is via a Treasurer’s Advance, they said.