Wednesday, 26 August 2026

 Richard WELCH (North-Eastern Metropolitan) (17:36): I rise to speak on the Victorian Auditor-General’s Office (VAGO) report into the Suburban Rail Loop. It will be the first but definitely not the last time that this gets raised in this house. This is a bombshell report, but it is not just a bomb; it is a series of bombshells. In fact you can barely turn a page without a shocking revelation, particularly pages 8 to 23 in this document. It is absolutely extraordinary reading. I will not get through everything that this document reveals today, but we will start with the point that a tax was added to the Victorian people on public transport, was never disclosed and was designed to pay for a significant part of the project. In fact, out of the value capture component of the project, it is the single largest contributor. This is a tax added by Ben Carroll, who was the minister for transport who approved this and did not disclose it. The Premier says that integrity is no longer optional. Well, he had an opportunity to disclose this and he did not disclose this. This is an absolute scandal on that front.

The other thing that VAGO revealed today – and they confirmed it in the briefing we had this afternoon – is that VAGO, in their two-year study of the SRL, became aware that the project was neither on time nor on budget in January this year. When asked about this, they confirmed that the government had exactly the same information as they did at that point in time. So there are serious questions to be asked about the repeated statements since January this year that the project is on time and on budget. On time and on budget – how many times did we hear that? Well, VAGO say otherwise, and VAGO say the government had the exact same information they did, and that means that it was not on time or on budget from January; in fact it got progressively worse.

One of the things they did as it got progressively worse was that in March they made an instruction to slow the project down and look at ways to close it down because they wanted to move some of the cost into a future financial year to move it out of the forwards of the budget. They were advised that it would be expensive to do this, but they said, ‘No, this will save us $800 million if we do it.’ Well, guess what, by doing that, by moving those works into a future year, VAGO has revealed it has cost over $1.4 billion – that has been added to the project by doing that – in order to have the vanity of the forwards reflect that we could get to our budget surplus. The vanity is they have cost us $1.4 billion just for that vanity exercise. That is extraordinary.

The report has also revealed that the government did not have enough money to sign the contracts to build the stations, so it has delayed, it has deferred signing the contracts for the stations. VAGO said that if it is not signed by caretaker, again, it is going to cost us more money. As Mrs Broad said, the idea that this is a $34 billion project has been exploded forever, because not only are there these cost overlays but there is actually a systemic methodology for misleading and misconfiguring the figures. What they do is, first of all – at all costs – keep the $34 billion headline figure unchanged, but then they do not update the package budgets for known procurement increases. So when they have got the increases, they do not announce them; they say, ‘All the contracts aren’t signed, so we can’t announce them – to be confirmed.’ They move any early overruns by transferring the contingency from other areas or deleting them, shifting the scope. Then they characterise approved but unfunded functionality or scope as an ‘optional’, ‘complementary’ or ‘future’ government decision, without any disclosure. Then they exclude development, operating and property acquisition costs from the headline figure altogether. Recently, this week, we learned the other way they do it is by saying they are saving money by descoping things that were never funded in the first place out of it.

If this is not systematic deception of the Parliament, the Public Accounts and Estimates Committee and the Victorian people, I do not know what is. It is a complete financial scandal, and I have gone through like 5 per cent of it. There is a scandal on every page and in every paragraph of this report, and there will have to be consequences, or I will really worry for the soul of the state.