The Parliamentary Budget Office has projected that the complete realization of the SRL, spanning three expansive phases, could exceed a staggering $200 billion in expenses. When she assumed office in late 2023, Victorian Premier Jacinta Allan faced a chorus of expert voices urging a reassessment of the mega project’s economic viability.
These apprehensions were echoed by both the Victorian PBO and the Australian National Audit Office (ANAO). For the initial two segments of the SRL covering 60 kilometers, the PBO estimates social benefits to range merely between $0.60 and $0.70 per dollar invested, raising questions about the initiative's fiscal prudence.
The ANAO pointed out critical gaps and questionable methodologies in the fiscal rationale presented for $11.5 billion in federal co-financing for SRL’s opening phase. Nevertheless, Premier Allan proceeded to formalize contracts for significant tunnel works, effectively anchoring Victorian taxpayers to the endeavor.
There remains a $20 billion shortfall for the SRL's initial phase, as detailed in the Victorian Budget. The plan anticipates a third of the SRL East’s financing to stem from federal resources, while another third is expected from enhanced state revenue mechanisms termed "value capture."
Nevertheless, the Albanese Labor government has expressed reservations over the funding appeal. Additionally, potential opposition from the Coalition threatens to further complicate financial support if it gains power. Meanwhile, labor costs for SRL’s administration have surged dramatically.
According to the Suburban Rail Loop Authority's recent annual report, remuneration to 102 senior executives surpassed $32.9 million in 2023-24, averaging an impressive $332,000 per annum. This comes amidst a recruitment drive that includes competitive salaries and attractive remote work setups, according to the Herald-Sun.
The publication states, “Five senior vacancies were advertised by the SRLA as part of a recruitment drive to fill key positions, including two high-paying director roles.” Positions such as a Director of Policy and Innovation and an Integrity and Insurance Director offer between $248,629 and $290,600.
This aggressive expansion of workforce and compensation, critics argue, underscores a misalignment of fiscal priorities, diverting funds from crucial existing transport networks and burgeoning regions. With potential adverse effects on credit ratings and interest obligations, the SRL continues to polarize opinions.
The original article appeared in the Victorian Budget 2023-24 publication, which raised urgent questions about fiscal responsibility and future implications for state finances.
Going forward, the insistence on pushing SRL ahead, despite authoritative advice, leaves Victoria’s financial landscape in a precarious position. With the state on the precipice of further fiscal decline, this infrastructure decision could encumber Victorians with longstanding debt challenges.
