Victorian Labor’s secret rail levy to help fund the Suburban Rail Loop may amount to corruption under expanded integrity laws promised by Ben Carroll, a former head of the state’s anti-corruption watchdog says.
The Premier last week scrapped the Rail Improvement Charge after it was exposed by the Victorian Auditor-General’s Office, which delivered a scathing assessment of the government’s funding model and lack of transparency surrounding the $34.5bn first stage of the SRL.
Mr Carroll is under increasing pressure to detail what he knew and when about the levy, which was devised by Daniel Andrews in 2021 and implemented under Jacinta Allan in late 2024 when Mr Carroll was deputy premier.
It would have raised $8bn by 2062 despite never being publicly disclosed by Mr Andrews and Ms Allan.
Robert Redlich, a former Supreme Court judge who was commissioner of the Independent Broad-based Anti-corruption Commission from 2018 to 2022, said it may well be that the RIC was imposed for improper motives that did not serve the public interest. If so, it would constitute a “breach of public trust” under the broader definitions of corruption used by the federal National Anti-Corruption Commission and NSW’s Independent Commission Against Corruption.
Mr Carroll has pledged to broaden the definition of corrupt conduct investigated by IBAC to capture forms of “soft corruption” that can be pursued by the NACC and ICAC, including breaches of public trust, with a wider remit to operate retrospectively.
“The RIC is one means of contributing to the funding of the Suburban Rail Loop,” Mr Redlich told The Australian.
“The secret charge taxing transport users may have been imposed for improper motives that did not serve the public interest. Such conduct, if established, would fall within IBAC’s proposed expanded jurisdiction – assuming it takes a similar form to the ICAC and the NACC – and IBAC would have jurisdiction to investigate and determine the motives and knowledge of those deciding to implement the charges in order to determine whether it constituted corruption.”
Mr Redlich’s comments raise the prospect that circumstances surrounding the secret levy could come under scrutiny from Victoria’s royal commission into the construction sector, amid calls for that inquiry to examine the planning and governance of major infrastructure projects.
Mr Redlich, now chair of the Accountability Round Table, pointed to previous criticism of the SRL by former Victorian ombudsman Deborah Glass and VAGO, including concerns over its business case, planning and transparency. Mr Redlich and Ms Glass this month called for the royal commission to scrutinise the way major infrastructure projects were conceived and approved, noting that the absence of proper integrated planning of transport, land use and infrastructure could contribute to the risk of corruption and misconduct.
The VAGO report uncovered the 1 per cent tax Victorians unknowingly have paid since January 2025 as part of its review into SRL East, finding it would have raised $8bn by 2062. The government initially had planned for 60 per cent of the levy’s revenue – about $4.8bn – to go to SRL East.
“In the case of the SRL, the former ombudsman and VAGO have reported on the unsatisfactory features of the SRL,” Mr Redlich said.
“Much has been said about the absence of a proper and sound business case, wholly inadequate consultation, no transparency and no integrated planning of transport, land use and infrastructure, which has been a legislative requirement for such major projects since 2010.
“The secretive RIC may be an illustration of the serious consequences that follow when proper planning process and governance is not followed.”
Mr Carroll on Sunday said the royal commission had the “broadest terms possible, and nothing is off limits”.
He also said it was the “intention” that the expanded definition of corrupt conduct and “follow-the-dollar” powers for IBAC be retrospective.
“We are working very hard to expand the definition of corruption in this state,” he said.
Anti-corruption expert Geoffrey Watson said the Carroll government should conduct an internal inquiry into how the levy was devised and approved, and then tell the public what had happened.
“It may well be that within the next few days we get all the paperwork which will tell us exactly what happened,” he said.
“But at this stage, I just think that it’s better that the issue … be explored, and in the interests of transparency, as much information given over to the public as possible.”
Mr Watson said there didn’t appear to be “any explanation” for the secret levy that “could have an innocent complexion”.
“If you did that and you were a public company, you’d be prosecuted for breaches of your duties to shareholders,” he said.
“Now the shareholders here are the Victorian public.
“If the government itself is excluding things from their accounting – I’m not going to call it a crime, I’m going to call it unjustifiably bad practice.”
Multiple senior Labor sources have confirmed to The Australian that Mr Carroll and Deputy Premier Gabrielle Williams as ministers were aware of the existence of the levy. It was devised and approved by the budget and finance committee, of which Mr Carroll was a member since 2024.
There are differing recollections over whether the levy ever went to a meeting of the entire cabinet.
Anthony GallowayVictorian political editor