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AAP
AAP
Callum Godde

Liberals float revival of contentious toll road project

The opposition is calling for a revival of plans to connect Melbourne's Eastern Freeway to CityLink. (Julian Smith/AAP PHOTOS)

Melbourne's dumped East West Link project could be back on the ballot at the next Victorian election, as the major parties trade barbs over pet transport projects.

Opposition Leader John Pesutto has put the controversial toll road project back on the agenda while attacking the Allan government's spending on the Metro Tunnel.

"At some point the East West Link does need to be built," he told reporters at state parliament on Wednesday.

"Because you've got North East Link coming online and the Eastern Freeway will become even more of a car park than it already is."

In 2014, Daniel Andrews came to power on a promise to cancel a contract signed by then-premier Denis Napthine to build a underground road to connect the Eastern Freeway to CityLink.

Victorian Opposition Leader John Pesutto
"At some point the East West Link does need to be built," Opposition Leader John Pesutto said. (Joel Carrett/AAP PHOTOS)

At the time, prime minister Tony Abbott dubbed the state election a "referendum on the East West Link".

A report by Victoria's auditor-general in 2015 revealed the total cost of scrapping East West Link topped $1.1 billion, including a $642 million termination settlement.

The plan has since revived in different forms.

Transport Infrastructure Minister Danny Pearson said the "dog of a project" had been rejected at three consecutive state elections.

"This is just nothing more than a thought bubble," he said.

"We don't know when it's going to start, we don't know how much it's going to cost, we don't know the route it's going to take."

Meanwhile, Treasurer Tim Pallas sought to clarify comments he made about a $837 million cost blowout on the Metro Tunnel potentially adding to spiralling state debt.

Mr Pallas on Wednesday confirmed the money would come out of the state's consolidated fund, its primary financial account.

"To the extent that this is additional expense on the ledger, it will have an impact around the state's debt position unless, of course, I can find offsetting value for the state," he told reporters.

"That's exactly what I'm looking for at the moment."

TIM PALLAS PRESSER
Tim Pallas' ninth state budget forecast Victoria's net debt would hit $187.8 billion by mid-2028. (Joel Carrett/AAP PHOTOS)

The Metro Tunnel was originally costed at $10.9 billion when it was first announced in the 2016 state budget, but several escalations have pushed the price tag for taxpayers to $13.48 billion.

The project features five new underground stations and will connect the busy Sunbury, Cranbourne and Pakenham lines through a new tunnel when it opens in 2025.

Mr Pallas flagged taxpayers would have to wait until either the mid-year budget update or 2025/26 budget to learn how he would square the ledger.

The government is thinking "creatively" but the treasurer signalled a new tax wasn't on his radar.

"We don't anticipate that we'll be able to do much in the space of taxes, given the budget before last was substantial," Mr Pallas said.

"Whilst I'm not ruling out adjusting the tax (settings), we've reduced or removed some 64 taxes in the state in the 10 years that I've been treasurer."

In question time, Mr Pallas suggested enough contingency funds were set aside in the project's budget to cover the cost overrun.

"We will not see any adverse impact on state debt," he said.

However, a report from Auditor-General Andrew Greaves in June revealed there was insufficient contingency funds remaining to address issues and finish the tunnel.

Mr Pesutto said Victorians could not count out another tax to balance the books.

"Labor has it in their DNA to tax more," he said.

The May state budget, Mr Pallas' ninth as treasurer, forecast the state's net debt would hit $187.8 billion by mid-2028, pushing up annual interest expenses to $9.4 billion.

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