Federal funding may not be fair, but Victoria has cruelled its credibility

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At first glance, Victorian Treasurer Tim Pallas’ two-day shot at the Albanese government for neglecting the state’s vital infrastructure needs appears justified.

After all, Victoria is allotted less than 1 per cent of the federal government’s $11 billion priority infrastructure kitty, and what right-minded state treasurer would – to borrow Pallas’ words – “take it lying down”?

Treasurer Tim Pallas on Friday.Credit: Wayne Taylor

Just over $100 million of the fund will be directed to Victoria – only Tasmania got a smaller portion – and the state’s share of the country’s infrastructure spending looks likely to drop from 23.5 per cent to 19.2 per cent. That’s despite Victoria making up 26 per cent of the country’s population.

More than $4 billion of the $11 billion fund is yet to be allocated, but Pallas is apparently not holding his breath.

It’s a bitter pill to swallow for Victorians, who, saddled with soaring interest rates and sluggish wage growth, were also hit with the tax increases that helped bankroll the federal government’s priority infrastructure fund only to see that money now overwhelmingly headed for Queensland, South Australia and Western Australia.

It’s an unjust outcome for Victoria, where household disposable income per person has dropped more than in any other state, marking the most significant collapse since 1990 and prompting economist Saul Eslake to warn that the state is among the country’s poorest on several economic measures.

Sadder still, is that this follows successive federal budgets from governments of both political persuasions that have shortchanged Victoria on a per capita basis, even as the state’s population continues to swell and this year recorded the biggest increase in the nation.

The lost $4 billion that Tony Abbott allocated to the East West Link 10 years ago – without having ever seen a business case or an assessment from Infrastructure Australia – could have been diverted by the Coalition to Melbourne’s Metro Tunnel project. Instead Abbott and his successors quarantined the money, perversely, for the non-existent toll road.

Victorians will never see this cash, with federal Labor now saying it was a “fraud” and there is simply no money to give to a “dead” road.

In the circumstances, it behoves the state treasurer to fight aggressively for Victorians, so it is all the more concerning that the Allan government’s very reasonable appeal is tainted and undermined by its own shoddy attitude towards due diligence and governance.

Former premier Daniel Andrews and Tim Pallas making a North East Link announcement in 2018.Credit: Eddie Jim

A federal treasurer answerable to the entire nation will surely think twice about allocating public money to a state that has been found by its corruption and financial watchdogs to have a slipshod approach to planning and public spending, a state that when exposed dismisses the findings out of hand.

This is not to imply that Victoria is alone in exceeding budgets for big builds, or that the government’s integrity scandals and project cost blowouts somehow mean Victorians are less deserving of federal funding powered by their taxes.

We learnt on Friday that the North East Link has blown out to $26.1 billion from an original estimate of $10 billion, but this would not lead to the federal government abandoning its role as co-funder of the toll road.

However, the Allan government needs to demonstrate to all stakeholders, including the federal government, that it can show genuine leadership, that it can prioritise cohesive, integrated planning when it commits billions of taxpayer dollars to new projects and can be more transparent about the nature of those projects and their true cost.

The prudent government response to the Victorian ombudsman’s recent findings on the highly secretive and rushed $200 billion Suburban Rail Loop, would have been to pause and reconsider the merits of building what the Grattan Institute think tank has termed “the most expensive folly in Australia”.

Might the lives of everyday Victorians not benefit more from putting $200 billion into hospitals, schools, parks, and better bus services and train timetabling, rather than an underground train line in the car-dominant middle suburbs of Cheltenham and Glen Waverley?

The Age has previously offered qualified support for the loop line based on the unequivocal mandate voters have given the Labor government. It would also provide a much-needed boost to housing near stations in the middle of an accommodation crisis.

But voter support does not absolve the government of its responsibility to sensibly examine how it spends a generation’s worth of infrastructure investment and ensure it is building a future that is more sustainable, connected and liveable for all. It also has a responsibility to adjust with changing circumstances, such as skyrocketing costs.

Unfortunately, the Andrews government’s contemptuousness for transparency does not appear to have suddenly improved under the Allan government.

In response to the exposure of poor process it denies wrongdoing and patronises the watchdogs who serve as bulwarks against government overreach – tactics that bear a worrying resemblance to populist disdain for public scrutiny around the world.

Within the bureaucratic arms of government, would-be whistleblowers are intimidated into silence out of fear that speaking up would lead to the government blacklisting them. Victorian Ombudsman Deborah Glass revealed as much as she could about Victoria’s culture of secrecy, but her own public interest investigations have been constrained by this pressure.

These conditions are clearly corrosive to good governance and a healthy democracy in Victoria. To quote Glass, “nothing will change without a recognition at the highest levels of government that change is necessary”.

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