Victoria Had a Secret Tax on Train and Bus Fares. The Premier Just Cancelled It.
On 27 August 2026, Victorian Premier Ben Carroll announced he would scrap a hidden charge that had been quietly added to public transport fares. The charge was expected to raise $8 billion over 37 years to help pay for the Suburban Rail Loop and other big construction projects. It had been in place since 1 January 2025, adding a 1% increase to every public transport fare across Melbourne and regional Victoria, on top of the normal fare rises that track inflation.
Nobody in the public knew about this charge until it showed up in a report by the auditor general — an independent official who checks how the government spends money. That report was tabled in Victorian parliament on 26 August 2026. Carroll said the charge would be removed because there was no openness about how it was created or put into effect (The Guardian).
The auditor general's report did more than reveal the hidden charge. It also raised doubts about whether the first part of the Suburban Rail Loop, called SRL East, can be finished on time or within its budget. The report traced the charge back to 2021, when Carroll was the minister in charge of public transport. Carroll has said he was not involved in creating it and was not on the government's small budget committee in December 2023 when it was approved. But the auditor general noted that further decisions about the charge were discussed by the government in November 2024, and by then Carroll had joined that same committee.
Think of the funding plan for the rail loop like a jigsaw puzzle: many different pieces of money have to fit together to cover the total cost. This hidden fare charge was the biggest single piece. About 60% of the money it raised — roughly $4.8 billion — was meant for SRL East. The government's plan called for $11.5 billion, or one-third of the tunnel's building cost, to come from what it calls "value capture." That means finding ways to take some of the extra value that a new rail line creates for nearby properties and businesses, and directing that money back into the project. On 27 August 2026, Carroll said he would not say how the $4.8 billion gap from removing the charge would be filled.
The Suburban Rail Loop is the biggest transport building project in Victoria's history. Daniel Andrews announced it in 2018 at an estimated cost of $50 billion. The full network would run 90 kilometres from Cheltenham in Melbourne's south-east to Werribee in the west, passing through Melbourne Airport. SRL East covers 26 kilometres of twin tunnels from Cheltenham to Box Hill and is due to open in 2035. On 25 August 2026, Carroll said SRL East would cost $33.3 billion. That falls within a range estimated in 2021, but it is well above the original 2018 figure. Labor's May budget listed $14.5 billion in contracts already signed for the project.
The rising costs have attracted close attention. A 2024 analysis by the Parliamentary Budget Office — a body that provides independent cost estimates — found that building SRL East and SRL North together would cost $96.4 billion. The same analysis said running both stages for 50 years would cost another $120.2 billion. SRL North runs from Box Hill to Melbourne Airport and is due to open in 2053. The final stage, SRL West, from Sunshine to Werribee, has no completion date or cost estimate at all.
The broader picture is one of growing financial pressure on Victoria's building plans. Removing the hidden fare charge takes away the single biggest identified source of revenue for the rail loop, and Carroll's refusal to name a replacement leaves a clear hole in a project whose feasibility is already being questioned. With $14.5 billion in contracts signed and construction already happening, the government cannot easily back out. But the auditor general's concerns about timing and budget, along with the much higher cost estimates from the Parliamentary Budget Office, suggest the gap between what the project is expected to cost and what it will actually cost is getting wider, not smaller.
Carroll's position is worth noting. As public transport minister in 2021, he was responsible for the area where the charge was first developed. As premier in 2026, he is the one removing it, pointing to the same lack of openness that surrounded its creation. Responsibility for both the charge's introduction and its cancellation now sits with the same person.
The Victorian government had also promised free weekend public transport for seniors aged 60 and over starting 1 January 2026 (Parliament of Victoria), and Carroll's latest budget included over $4 billion in public transport spending (Parliament of Victoria). Removing the fare charge adds to the money the transport network is giving up, even as the state's most expensive building project keeps using up funds at a pace that independent experts think is being underestimated.
