Andrews and Albanese set for showdown on Melbourne’s rail loop funding

The Andrews and Albanese governments are on a collision course over Victoria’s Suburban Rail Loop project, according to infrastructure experts, who expect federal cash to hinge on an independent assessment of the plan.

Prime Minister Anthony Albanese pledged $2.2 billion before this month’s federal election as an initial investment in the first stage of the 90-kilometre orbital railway through Melbourne’s middle suburbs.

Anthony Albanese established advisory body Infrastructure Australia as infrastructure minister in the Rudd government in 2008.Credit: Alex Ellinghausen

But the commitment – Labor’s largest pre-election infrastructure pledge – is well short of the $11.5 billion Victoria wants from its federal colleagues to build the loop’s first eastern leg. The first stage connecting Cheltenham to Box Hill is set to open by 2035 and cost between $30 billion and $34.5 billion.

Infrastructure experts said further federal funding would be complicated by federal Labor’s pre-election pledge of restoring the role of independent advisory Infrastructure Australia, which Albanese established as infrastructure minister in the Rudd government in 2008 to guide spending decisions.

“The thing about the Suburban Rail Loop is that project hasn’t been through Infrastructure Australia,” said Marion Terrill, director of the Grattan Institute’s Transport and Cities program.

“The pressure will be on not to put any more money into the Suburban Rail Loop unless and until it has had a positive assessment from Infrastructure Australia. I would assume that is some way off still.”

The Andrews government’s planned Suburban Rail Loop.Credit:

An Infrastructure Australia spokesman said it was currently evaluating an early-stage submission on the project, which is the first step in a three-stage assessment process.

The Andrews government had asked the former Morrison government for $11.5 billion over 10 years while former Labor leader Bill Shorten promised $15 billion over 15 years ahead of his failed 2019 bid for prime minister.

Jago Dodson, professor of urban policy and director of the Centre for Urban Research at RMIT University, said that Labor swept to power after attacking the Coalition over the so-called “sports rorts” and commuter car park funding scandals.

“What’s expected at a federal level is to avoid many of the issues we’ve seen – pork barrelling and [what] some would allege is corrupt practice – over the past decade,” he said. “If federal Labor is true to the framework it established ... it will subject the Suburban Rail Loop to full evaluation and public reporting by Infrastructure Australia before committing funds.”

An Age investigation revealed last August how the loop was conceived in a secretive and questionable process led by consultants at PwC, which shut out most of the state’s cabinet and the then-head of the Transport Department.

The Victorian government’s business case says that the loop’s eastern and northern sections would deliver benefits of $1.10 to $1.70 for every dollar invested. The northern section will run from Box Hill to Melbourne Airport and open around 2050, followed by a final link through the western suburbs to Werribee.

An Albanese government spokesman would not say whether it would commit to the full $11.5 billion Victoria is seeking for the project, or what role Infrastructure Australia would play in unlocking more cash.

“Our $2.2 billion investment in Suburban Rail Loop is the beginning of a long-term partnership to deliver this city-shaping project,” he said. “We know that this project stacks up and will deliver benefits to all Victorians.”

An Andrews government spokeswoman said that Victoria finally had “a true partner in Canberra when it comes to infrastructure funding”.

“This project more than stacks up – that’s why the Albanese Government is partnering with us to deliver this vital project,” she said.

Albanese said during the election campaign that Infrastructure Australia had been undermined during nine years of Coalition government. On the hustings in May, he ridiculed the choice of Col Murray as chairman in 2021, saying he “might be a good bloke, but he was the mayor of one of Barnaby Joyce’s local councils”, Tamworth, who planned to travel Australia in a caravan and “ring in to the Infrastructure Australia board”.

Ballarat MP Catherine King, who was federal Labor’s infrastructure spokeswoman in opposition and is expected to be confirmed as minister next week, has previously said Infrastructure Australia was the only body that could “identify the genuinely transformational projects the nation needs” and that the last Labor government “listened ... and invested in every one of their priority projects”.

State opposition transport infrastructure spokesman Matthew Bach said Victoria couldn’t bank on Albanese fully backing the loop, and the Andrews government “have to tell people where the rest of the money is coming from”.

However, Bach welcomed King’s commitment to work with whoever wins Victoria’s November election, including on his party’s preferred East West Link road, which Labor refuses to build despite $4 billion being set aside for it in the federal budget.

Victoria has long argued it does not receive its fair share of federal funding, with the final Morrison government budget this year allocating just 5.9 per cent of new infrastructure spending to the state over four years, despite being home to a quarter of Australia’s population.

Premier Daniel Andrews said at a press conference this week that he was not an “apologist” for Labor and would fight Albanese for funding if necessary.

“If we need more, and we need to do better, then we’ll be campaigning and fighting for that,” Andrews said. “And Anthony knows that. He’ll always be clear that I put Victoria first.”

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