Tim Pallas: Victoria ‘won’t be very happy’ if Albanese government back out of infrastructure funding

Victorian Treasurer Tim Pallas warns the Albanese government it won’t ‘play out well for them’ if they don’t fund Victoria’s infrastructure projects.

Victorian Treasurer Tim Pallas has issued a rare warning to the Albanese government, telling a conference that the state would “not be very happy” if the Commonwealth was to turn its back on funding infrastructure projects.

In his address to the Infrastructure Partnerships forum in Melbourne on Friday, Mr Pallas told the hundreds of attendees that the state had reached its forecast peak of annual expenditure.

“It’d be remiss of me not to mention our friends in Canberra,” he said in his speech.

“The Commonwealth government, of course, announced a 90-day independent review of its infrastructure investment program in May this year. The clock must have broken because it’s been a bit frustrating for us all, as it’s been I’m sure for each and every one of you while we wait to hear the report outcomes.”

The review into Australia’s $120bn Infrastructure pipeline, led by Mike Mrdak, Clare Gardiner-Barnes and Reece Waldock, left federal funding for Victoria’s infrastructure projects up in the air, apart from the Suburban Rail Loop.

The Andrews Labor government is facing major cost blowouts to its infrastructure projects, with the North East link project the biggest to come, estimated to cost $16.5bn, representing a more than $10bn jump from its original $6bn estimate.

The state Treasurer emphasised his government’s desire for a “true partnership” with Canberra as he hinted to the importance of honouring commitment.

“Our federation works best when we work together. That includes maintaining our funding share on corridors of national significance and a willingness from the Commonwealth to be active stakeholders in jointly funded projects, including those projects that have been impacted by cost pressures.”

“We need increasingly, I think, to acknowledge that the work of Commonwealth and states has to be seamless.”

Victorian Transport and Infrastructure Minister Jacinta Allan and Treasurer Tim Pallas inspect the works at one the state’s level crossing removals at the Werribee Street overpass. Picture: NCA NewsWire / Chris Hopkins

Mr Pallas highlighted work done by the South Australian government that revealed the Commonwealth were receiving a windfall of $23.5bn through corporate tax due to a peak in commodity prices.

“The cost of maintaining the no worse off guarantee to the states, is about $5bn. So unless they fix it, we’re going to see $1.5bn each and every year fall out of Victoria’s receipts,” he said.

“And I can tell you, that won’t play out very well. And the state of Victoria will not be very happy if, having taken a massive windfall, the Commonwealth basically turn their back on the state’s capacity to employ and might I say ultimately deliver vital infrastructure to the community.”

Infrastructure Minister Jacinta Allan also addressed the forum, where she said projects like the Metro tunnel and West Gate tunnel are “well and truly on that home stretch to completion”.

She spoke of the current and future challenges faced with surging population growth, predicting that Melbourne would be home to 9 million people by 2050.

The population forecast means the transport network would need to support an additional 11 million trips each day. It would also mean an 80 per cent increase in private vehicle trips.

“We also know that doing nothing means half of all Melburnians will be living further away in our suburbs over the next two years, while the majority of jobs stay centred around the inner and middle ring of Melbourne.”

The Deputy Premier said train stations, particularly on the Suburban Rail Loop, would act as “catalysts” to investments in jobs and services.

Ms Allan addressing the Partnerships Conference on Friday. Picture: Partnerships 2023 Images

“Until now, the urban fringe has been expanding to satisfy the real estate needs of that steadily increasing population. And we certainly know too that a big home in a housing block in the outer suburbs will always have appeal … but it can’t remain the focus of our city’s growth.”

She flagged that the government would have more to say about planning and housing issues in the near future as she pointed to targeted land use policies that came with the Melbourne City Rail Loop.

“But it wasn’t just about that new underground city rail loop and the stations that transformed the rail network. What was equally important was what happened above ground and ran in parallel with the delivery of the infrastructure,” Ms Allan said.

“And this was driven by targeted land use policies, like Postcode 3000, which was back in the 80s an incentivisation regime for people who come and live in the CBD.”