Victorian Premier Ben Carroll and former premiers Jacinta Allan and Daniel Andrews could be called before a parliamentary inquiry into a previously undisclosed public transport fare levy linked to funding the Suburban Rail Loop, as pressure grows for Labor to explain who knew about the charge and why commuters were not told.

The state Coalition is moving to establish a select committee in Victoria’s upper house to investigate the Rail Improvement Charge, a one per cent annual increase imposed on public transport fares on top of normal inflation-linked adjustments.

If the inquiry secures sufficient support from crossbench MPs, opposition members want public hearings examining how the levy was created, who knew about it, why it was kept out of public announcements and how it became part of the financing strategy for Victoria’s largest infrastructure project.

The proposed witness list could reach deep into three generations of Labor leadership.

Carroll, Allan and Andrews are among the senior figures the Coalition wants scrutinised, alongside ministers and former ministers involved in treasury, transport and the Suburban Rail Loop, as well as senior departmental officials.

But the inquiry has not yet been established, meaning claims that the three premiers are definitely scheduled to testify go further than the position currently confirmed.

What is already firmly established is the existence of the levy and the extraordinary lack of public disclosure surrounding it.

Auditor-General confirms levy was deliberately left out of communications

The Victorian Auditor-General’s Office exposed the Rail Improvement Charge in its major report into delivery of the Suburban Rail Loop, tabled in Parliament on August 26.

The audit found the government first approved the charge in August 2021.

It was later confirmed as part of the Suburban Rail Loop’s value-capture funding package in December 2023 and retained through further government decisions in November 2024.

The levy involved adding an extra one per cent to public transport fares each year, on top of normal annual increases linked to inflation.

It began raising revenue from January 1, 2025.

Yet commuters were not separately told that part of their fare increase was a new revenue-raising measure.

VAGO found neither the government nor Transport Victoria acknowledged the levy in public communications about the 2025 and 2026 fare increases.

More significantly, the audit found the government made a decision in November 2024 to exclude reference to the Rail Improvement Charge from public communications about the Suburban Rail Loop value-capture package.

That finding has transformed the issue from a dispute over transport pricing into a much broader argument about transparency and cabinet accountability.

The levy was not merely an accounting footnote.

It was expected to become the single largest source of new value-capture revenue associated with SRL East.

An $8 billion revenue stream

Department of Treasury and Finance modelling examined by VAGO estimated the Rail Improvement Charge could raise about $8 billion in net present value terms over the period to 2062.

Under the funding arrangements considered by government, 60 per cent of the revenue — estimated at about $4.8 billion in net present value terms — was associated with the funding of SRL East.

The charge was particularly significant because Labor’s strategy for the first stage of the rail loop relied on roughly one-third of its funding ultimately being supported by new value-capture revenues.

SRL East is the planned 26-kilometre underground section between Cheltenham and Box Hill, with six stations and services scheduled to begin in 2035.

The government had publicly estimated its cost at up to $34.5 billion when VAGO completed its investigation.

But the auditor concluded the project was more likely than not to exceed that figure and identified substantial uncertainty around both its final cost and funding.

That made the hidden fare charge particularly important.

The government was relying on new revenue to support borrowings for the project at the same time as the existence and purpose of a major component of that revenue strategy remained undisclosed to passengers.

The land tax ‘swap’

The funding arrangements became even more complicated in late 2024.

VAGO found the government approved what amounted to a revenue swap involving existing land tax collected from areas around future SRL stations.

In public communications, land tax revenue appeared as part of the project’s funding package.

But Treasury advice made clear that land tax was already an existing source of government revenue rather than a genuinely new stream created by the rail project.

The Rail Improvement Charge, by contrast, was new money.

According to the audit, the November 2024 decisions recognised that the public transport levy remained necessary to generate additional revenue to service SRL-related borrowings, even while the charge itself was excluded from the public description of the value-capture package.

VAGO said that arrangement should have been transparently communicated to Parliament and the community.

It was not.

That distinction is likely to become one of the central subjects of any parliamentary inquiry.

Opposition MPs want to establish not merely which minister knew there was an annual fare increase, but which decision-makers understood that a specifically designed revenue measure was operating behind that increase and that it remained important to the financing of the SRL.

Questions stretch back to the Andrews government

The timeline creates difficult questions for several Labor administrations.

The Rail Improvement Charge was first approved in August 2021, when Daniel Andrews was premier.

Carroll was public transport minister at the time, although he has said he was not involved in creating the levy and has pointed to decisions taken through powerful cabinet processes rather than his ministerial portfolio.

Jacinta Allan was one of the government’s most senior transport figures during the development of the Suburban Rail Loop and later succeeded Andrews as premier.

The levy was reconfirmed as part of the value-capture package in December 2023, during Allan’s premiership.

The government then made further decisions concerning the charge in November 2024.

Those decisions included retaining the levy while excluding it from public communications about the SRL funding package.

Recent reporting has further intensified the dispute by suggesting details of the charge appeared in material circulated to the broader cabinet in 2024.

That has created a politically explosive question for Labor figures who say they either did not know about the charge or were not involved in concealing it: exactly what information was available to ministers, and when?

Those claims about individual ministers’ knowledge remain among the matters an inquiry would be expected to test rather than facts that can yet be conclusively attributed to every cabinet member.

Carroll moves to kill the charge

Within a day of the Auditor-General’s revelations, Carroll announced his government would abolish the Rail Improvement Charge.

The Premier acknowledged the process had failed a basic transparency test.

He said there had been “no transparency in its creation and implementation” and argued his government would take a different approach.

Carroll also resisted repeated questions about exactly when he personally became aware of the levy.

That answer did little to end opposition pressure.

The fact that Carroll had previously served as public transport minister, later became deputy premier and was a senior figure in the government throughout key stages of the levy controversy means the Coalition is determined to question him if its proposed inquiry proceeds.

His political position is unusual.

He is both the Premier who moved to abolish the charge and a long-serving senior member of the governments under which it was designed, approved and implemented.

That gives him an incentive to demonstrate that his promise of a more transparent administration represents a genuine break with what came before.

It also gives his opponents an incentive to test exactly how complete that break really is.

Only a fraction of the projected money was collected

The extraordinary long-term revenue forecast also contrasts sharply with what the levy had raised by the time it was exposed.

VAGO said Treasury advised that about $6.2 million had been collected between January 2025 and the end of February 2026.

That was significantly below the amount expected over the period.

Public transport revenue itself had also been running below budget, while government decisions including discounted fares, free travel periods and other concessions affected the amount ultimately generated.

The charge was designed to become much more significant over time because the additional one per cent would compound year after year.

Treasury modelling showed the real impact on fares growing substantially over several decades.

That was one reason departmental advice raised concerns about affordability for passengers and the risk that higher fares could eventually push some commuters towards private vehicles.

The audit noted an obvious tension in such an outcome: a rail project partly justified by reducing road congestion was being supported through a fare mechanism that officials warned could encourage some people to drive instead.

Why the proposed inquiry matters

The Coalition wants the parliamentary committee to report before Victoria’s November election, turning the controversy into another major test of Labor’s record after more than a decade in government.

Opposition Leader Jess Wilson has characterised the undisclosed levy as a breach of trust and argues Victorians deserve to know which ministers authorised it and why the government did not tell passengers.

Labor’s defence is likely to focus on the distinction between decisions made through cabinet processes, ministerial knowledge of individual details and the fact that the levy ultimately formed part of broader public transport revenue arrangements.

Carroll has already made clear he does not defend the lack of transparency and wants the charge abolished.

But that still leaves unanswered questions about institutional responsibility.

A parliamentary inquiry could seek internal advice, cabinet-related material where legally available, departmental correspondence and evidence from officials involved in developing the financing strategy.

It could also examine how a revenue measure expected to underpin billions of dollars in long-term financing operated for more than a year without being separately identified to the people paying it.

The wider SRL funding problem has not disappeared

Abolishing the Rail Improvement Charge also creates a practical problem for the government.

The revenue it was expected to generate formed part of a broader financing strategy that VAGO had already described as uncertain.

At June 2026, the audit identified a $5.5 billion gap in approved funding needed for SRL East and warned further borrowing or additional revenue measures might be required.

The federal government had committed $6 billion of an expected $11.5 billion Commonwealth contribution.

VAGO also concluded SRL East was more likely than not to exceed its publicly disclosed upper cost estimate and said delays were placing the planned 2035 opening date at risk.

Carroll has since sought savings and changes to the project while maintaining Labor’s commitment to build the eastern stage.

But removing a long-term revenue stream does not remove the underlying need to finance construction and repay debt.

That means the political argument over the hidden levy is likely to be followed by another equally important question: what replaces the money?

For the proposed parliamentary inquiry, however, the first issue is more basic.

A levy approved in 2021, reaffirmed in later government decisions and actually collected from passengers from 2025 was not transparently disclosed.

The Auditor-General has already established that fact.

The fight now is over responsibility — and whether current and former premiers will be asked to explain it publicly before Victorians vote.