A report by the Victorian Auditor-General's Office into Melbourne's Suburban Rail Loop on Wednesday revealed a previously undisclosed levy was placed on all public transport fares in metropolitan Melbourne and regional Victoria.
The charge was introduced as an annual one per cent increase in fares, on top of yearly inflation rises, from the start of 2025.
It was not acknowledged by the state Labor government or Transport Victoria in their public communications about fare increases in 2025 and 2026.
The auditor-general said the government had planned to allocate 60 per cent of revenue collected through the levy, estimated at $4.8 billion in net present value terms to 2062, to help fund Suburban Rail Loop East.
Premier Ben Carroll, who was public transport minister in 2021 when the charge was approved, on Thursday vowed to abolish the levy.
"Victorians do deserve an apology," he told reporters.
"There was no transparency on the creation and implementation of this charge, and now as premier taking the state in the new direction, I give Victorians that apology."
The premier conceded the secret tax eroded trust in his government and all governments, and has requested an audit to check if there are any other similar undisclosed charges.
Mr Carroll, who replaced Jacinta Allan as premier in late July, said he was "not part of the creation" of the levy after repeatedly refusing to "relitigate the past".
"It was created in 2021. I was not part of the BFC (Budget and Finance Committee) process," he said.
Now-Deputy Premier Gabrielle Williams was public transport minister when fare price increases for 2025 were announced in December 2024.
She said she was aware of the charge at the time but was unaware of any "proactive decision" to keep it "hidden from public view".
"This charge was a decision of the Budget and Finance Committee, not a decision for me as minister," Ms Williams said.
"This is clearly something that has not met the pub test."
Opposition Leader Jess Wilson supported the government's move to ditch the tax but said its undisclosed introduction was a fundamental breach of trust.
"Ben Carroll isn't sorry. He's sorry that he got caught," she said.
"If the auditor-general had not revealed this secret tax yesterday, Ben Carroll never would have scrapped this tax.
"He never would have even told Victorians about its existence."
The SRL is a planned 90km orbital line stretching from Cheltenham in Melbourne's southeast to Werribee in the outer-west via the airport at Tullamarine.
The 26km eastern section from Cheltenham to Box Hill is slated to cost up to $34.5 billion, with a target delivery of 2035.
Ms Williams said the government ultimately decided collected revenue would go to a fund for public transport services rather than paying for infrastructure projects such as SRL.
Total revenue collected from the charge between January 2025 and the end of February 2026 was $6.2 million.
Public transport fares in Victoria have since been made free for certain commuters and half-price for all others in 2026.
The state government has not explained how it would make up the long-term budget shortfall created by dumping the charge, which was forecast to raise about $8 billion over 37 years.
Victorians head to the polls in November.
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