Victorian Labor makes $1bn blunder in budget analysis

VICTORIAN Labor has wrongly factored in a cash advance for the East West Link project in its 2013-14 budget analysis.

Victorian Shadow Treasurer Tim Pallas has made an embarrassing mistake for Labor.

VICTORIAN Labor has made a $1 billion blunder in its analysis of the 2013-14 Victorian budget, wrongly factoring in a cash advance from the commonwealth to the Napthine government for the East West Link road and tunnel project.

Shadow Treasurer Tim Pallas last night released a statement claiming the Victorian budget surplus of $935 million would in fact have been a deficit of $65 million when factoring in the commonwealth’s $1 billion payment for the $20 billion East West Link road and tunnel project.

However, the government said today that $1 billion was never included in the 2013-14 surplus, a fact that is supported in the budget’s statement of finances.

The statement of finances clearly states that the payment is “subject to finalisation’’, a spokeswoman for Treasurer Michael O’Brien said.

Mr Pallas’s statement claims: “The Napthine government is claiming a budget surplus of $935 million for 2013-14, but this includes a $1 billion advance from Tony Abbott for the second stage of East-West Link – a project that will not start construction for at least 18 months.’’

The error is expected to be seized upon by the government in Question Time today.

The Australian sought comment from Labor this morning but an explanation was not immediately available.

The mistake is highly embarrassing for Labor as Mr Pallas accused the government of having a budget “teetering on the edge – his claims of a surplus are in tatters’’.

The commonwealth has promised $3 billion to help build the East West Link road system, transforming travel across Melbourne.

The full $3 billion has been factored into the forward estimates but not this financial year’s budget, the government said.