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state political reporter Richard Willingham

Government and opposition butt heads over $2 fare cap after new Department of Transport costing

Opposition Leader Matthew Guy's signature policy to cap public transport fares at just $2 a day would cost $900 million more than the Coalition has promised, according to a Victorian Department of Transport costing.

But Labor and the public service have come under fire for undertaking a policy costing of an opposition policy proposal, with Coalition MPs arguing it is outside the remit of public servants.

The opposition's big pitch on cost of living involves a daily $2 cap for all public transport fares in metropolitan areas.

A full price zone 1 and 2 ticket currently costs $9.20. Under the plan, concession fares would be capped at $1 a day.

In a separate policy, Mr Guy has pledged to halve all V/Line fares.

When Mr Guy announced the $2 cap on October 9, he said it would cost $1.3 billion over four years, according to the independent Parliamentary Budget Office (PBO).

That PBO costing has not yet been publicly released.

Policy forecast to cost $900m more than PBO estimates

Public servants in the Department of Transport were asked by Public Transport Minister Ben Carroll's office to provide a brief with the costs over five years of the Coalition's policy.

The estimate includes forgone revenue and compensation to public transport operators such as Metro Trains and Yarra Trams.

"The cost of this policy will depend on a range of factors, including the rate of public transport patronage growth which is highly uncertain,'' the brief said.

Over the first four years of the policy, the department forecasts the plan will cost $2.23 billion.

Those estimates are calculated without any increased demand on public transport — Mr Guy has said that the cheaper fares would encourage more people to use trains, trams and buses.

The department's calculations were based on Myki usage in the first six months of 2022, which is lower than pre-pandemic patronage.

The Coalition has defended its costing and attacked the government for using the public service.

"What a shock — the Labor Government says the Liberal policies don't add up. Next they'll be telling us that having more debt than NSW, Queensland and Tasmania combined is somehow a good thing,'' Shadow Treasurer David Davis said.

"The fact is, our $2 flat fare public transport policy has been costed by the independent Parliamentary Budget Office and will provide a reward to hard-working families that only the Liberals and Nationals will deliver."

Impartiality of Department of Transport questioned

Shadow Public Transport Minister Danny O'Brien said it was "curious that the supposedly impartial Department of Transport is apparently costing opposition policies and handing them over to media".

He said the department had a poor track record of providing data to the PBO.

The state's ombudsman is currently investigating allegations that the Victorian public service has been politicised by the Andrews government.

Mr Carroll said the document showed that the Coalition could not be trusted on public transport.

"The Liberals cut regional train lines, closed regional train stations, and then sold off public transport sending ticket prices soaring. Now they're leaving passengers behind with their shoddy costings and policies, they won't be able to deliver or afford,'' he said.

The department ran a separate analysis, factoring in a 10 per cent increase in patronage, which found the policy would cost an estimated $2.1 billion over four years.

The department brief also says the operational costs of increased demand have not been included in the estimate.

"Reducing the daily cap by almost 80 per cent may lead to overcrowding on peak hour services as patronage returns to normal,'' the document said.

The policy could add to road and car parking congestion in zone 2 stations due to regional commuters driving to zone 2 for cheaper fares, the department brief stated.

"Reducing metropolitan daily fares by almost 80 per cent would exacerbate the existing significant price jump at the metropolitan-regional boundary, increasing the financial incentive for regional commuters to drive to drive zone 2 stations,'' the brief said.

Scrap airport rail, infrastructure experts say

Despite disagreement on cheaper public transport fares, both the government and opposition have committed to building the Melbourne Airport Rail Link project.

But national body Infrastructure Australia has warned in a fresh report that the project should be delayed while further work is done to better scope it.

"The economic benefits of Melbourne Airport Rail do not outweigh its economic costs at this time,'' the report said.

Early works on the multi-billion-dollar rail link from the city to Tullamarine have already begun. The project is jointly funded by the Commonwealth and state governments.

The report from Infrastructure Australia also recommends congestion road charges and competitive rail fares to boost usage on the rail line once it's completed in 2029.

Mr Guy said he did not support congestion road charges along the Tullamarine Freeway but backed the project.

"One thing I've said is that Melbourne needs a rail link," Mr Guy said.

"Perth is getting one, Sydney's got one, Brisbane's got one. It's now time for Melbourne to have one."

"There are five-and-a-quarter million people in this city, it doesn't make any sense not to have it."

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