The Victorian Auditor-General revealed on August 26, in its latest independent assurance report to parliament, that a one per cent tax had been applied to every ticket since at the start of last year; a tax that had never been publicly disclosed.
The tax is projected to raise $8 billion by 2062, with a portion intended to fund almost one-third of the Suburban Rail Loop East.
The Victorian Government has been using the levy to raise revenue despite it not being fully consistent with the state’s value capture framework.
The government announced five value capture measures in December 2025, including:
- Existing land tax revenue in SRL East precincts
- Existing windfall gains tax revenue in SRL East precincts
- Infrastructure contributions from property developers
- A car parking levy from 2035 on car park owners
- Revenue from state-initiated property development
It did not announce its decision to introduce a new levy on public transport fares from January 1, 2025, as part of the annual Consumer Price Index fare increase.
The increase to fares across Melbourne and regional Victoria is additional to existing annual CPI adjustments.
Sixty per cent of the revenue collected via the levy, estimated at $4.8 billion in net present value terms to 2062, is intended to be directed into SRL East, making it the project's largest source of value capture revenue.
The government and Transport Victoria did not acknowledge the levy in their public communications about the 2025 and 2026 annual fare increases.
“This tax means regional Victorians will be paying higher prices for almost 40 years to fund a rail tunnel most of them will never use,” state Member for Northern Victoria Wendy Lovell said.
“Labor once again proves its disdain for regional Victorians by hitting them with a sneaky tax to pay for city projects while regional roads are left to rot.”
