2024-25 state budget special - What PT got

Before the last state election we were told we could have both the Suburban Rail Loop and spending on health. The people bought that message and the Labor government was returned with a strong majority.

Since then project blow-outs and rising interest rates has made balancing the books tougher. Expectations have been hosed down and we were told to expect cuts. Such expectations were fuelled by LinkedIn chatter full of stories of public servants leaving, with departments being told to make do with fewer. Overall it's a pretty similar message to last year's budget, with very little new likely to be started, so I won't repeat myself here.

The messaging softened in the last week with an assurance from Treasurer Pallas of no cuts to services. Which is basically what was delivered yesterday. Although there were also few gains. This means a per capita drop, given our growing population. Thus we might have to squeeze in a bit tighter on an (increasingly likely to be off-peak) train or bus. Or new homebuyers may wait longer for buses to their estate. 

This pattern is not new, with more detail of per capita public transport service trends here. When it wants to spend or stimulate the economy, this government has tended to pump everything into new transport infrastructure projects. When it doesn't want to spend it pulls back on infrastructure and says it's too broke to substantially invest in services. Thus service has never got a fair go at any point of the political and budgetary cycle over the last ten years. 

The outcome is a stack of new infrastructure with extremely poor asset utilisation outside a few peak hours per weekday, with trains in non-marginal seats running on archaic timetables. And outstanding bus network issues years back, as common in Reservoir, Dandenong or Rowville, are very likely to require fixing today. 

Sydney, meanwhile, powers ahead at adding public transport service at several times the rate we do despite Melbourne's population growth being higher.     

The budget documents: Where everything is

See budget.vic.gov.au or straight to the papers here

The budget papers most important for public transport are:

* Paper 2 (Strategy and Outlook)  

* Paper 3 (Service Delivery)

* Paper 4 (State Capital Program) 

* Paper 5 (Statement of Finances)

* Department Performance Statement

* Budget Overview (a simpler look at items funded) 

Salient points from Paper 2 (Strategy and Outlook)

Contains the wider budgetary context including global outlook and debt forecasts.

The four major transport projects are described as follows:  

Transformational road and public transport investments are well under way with Metro Tunnel and West Gate Tunnel in advanced construction, and the North East Link and the Suburban Rail Loop ramping up construction activity. 

Other infrastructure projects in public transport were described as: 

...new regional and metropolitan trains, Next Generation Trams, Metro Tunnel infrastructure works and stabling and maintenance facilities for rolling stock. 

Salient points from Paper 3 (Service Delivery)

(see p75-83 & p169-178)

Output initiatives

Output initiatives are probably of most interest. This part of the budget is the recurring spending portion that is so important in keeping our trains, trams, buses and ferries running. 

Victoria's Bus Plan doesn't get a mention in this year's Budget Paper 3. Whereas it did get mention in last year's. For example the 2023-24 Budget Paper 3 had a line item called 'Delivering Victoria's Bus Plan' with small but rising amounts allocated (including $6.7m in 2024-25). That same $6.7m appears in the 2024-25 Budget Paper 3 but is reclassified as 'Improving Bus and Ferry Services', with a reference to the plan gone.

We're unlikely to see much from 2022's northern area bus reviews any time soon. However the middle northern suburbs do have many overlapping and duplicative routes so the area is ripe for some very cost-effective gains.   

What do Victorians get for buses? It's very slim pickings indeed with just five bus initiatives across the whole state. Of these five: 

* One (Melton FlexiRide) is an established service that gets continued funding
* One (service re-routing in Croydon, Pakenham and Greensborough stations) is to fund extra bus kilometres that new off-road bus interchanges inefficiently added to existing routes 
* One builds new stop infrastructure for bus routes across Hastings and the Mornington Peninsula (but does not commence service on the cross-peninsula route that got planning funding in 2023) 

That leaves just two new bus or coach service initiatives. These comprise: 

* coach service uplifts connecting Yarram and Leongatha to Pakenham train station, and
* weekend bus services improvement for route 800 to and around Chadstone shopping centre (in which I declare an interest in having founded and led this campaign) 

Also, listed under bus are two ferry initiatives. Both continue existing services (Portarlington ferry and West Gate Punt).

These measures are welcome but small. They effectively shelve the bus plan, abandon reform and leave new estates that missed out on GAIC funding unserved. Buses are the most cost-effective way of providing public transport coverage but this budget ignores, with the sole exception of Route 800, upgrades in metropolitan Melbourne. Thus the service per capita recession we've seen for metropolitan tram and train services will apply to buses too. 

Trams get nothing new in the way of service. The Tram Plan is more recent than the Bus Plan but appears to have had an even shorter shelf-life, at least with regards to service and network reform. 

Metropolitan Train services fare a bit better, if only due to the Metro Tunnel opening next year. 'Switching on the Big Build' (a term used a couple of budgets ago) gets to around $200m by 2025-26, presumably largely associated with Metro Tunnel services but there is also a tram component. There's a one-off $80m for Metro Tunnel Readiness - mostly in the next year. 

'More Trains More Often' gets about $10m per year. This will add weekday V/Line services to Warrnambool and Echuca. There is also money for timetable modelling. Also notable is a (again largely one-off) $70m for 'regional rail network enhancements'. 

Asset initiatives

Asset initiatives feature the stuff needed for things to happen. Bus and ferry services get $4.9m in the next year, with nothing budgeted thereafter. Funding is provided for regional rail network enhancements and train radios. 

The notorious train-platform gaps at Essendon station will get attention. As will some 'missing link' shared paths, mostly in growth areas. The Metro Tunnel readiness description (p85) confirms the Metro Tunnel will open in 2025. 

Statistics

Page 172 contains a summary of spending on services. Tram services are almost completely flat, declining in real terms. Buses barely cover CPI. Train services are up by about $250m per year, presumably largely due to Metro Tunnel services. 

Much information of interest, eg outputs like service kilometres per year, used to be contained in Budget Paper 3. However in 2024-25 this has been moved to the Department Performance Statement. More on those later. 

Salient points from Paper 4 (State Capital Program)

(see p78ff and 183ff)

You'll probably be most interested in the page of new projects (p78) for transport. Those for public and active transport include money reprioritised from the Suburban Rail Loop East. Most notable are 'critical public and active transport upgrades' (about $19m) and improved bus and ferry services (about $5m). It is anticipated that the latter will be completed by the third quarter of this financial year. Overall not a lot.

Pages 79-84 has a long list of existing projects. This is where you'll find the billions, eg for level crossing removals. Bus service improvements and reform has about $3 million remaining in 2024-25. Delivering Victoria's Bus Plan makes a reappearance, with $1.5m in 2024-25. There's also $19m for the Keeping Trams Moving program and $9m for public transport accessibility. The existing project list is by far the biggest component in expenditure, reflecting the fall off in new projects in last year's and this year's budget. 

Completed projects are in Page 85. They included about $5m worth of bus improvements. I've written about them extensively here.

A number of rail projects are reported under Victrack. These are on page 183. Main inclusions are Metro Tunnel readiness, train radios, freight and regional train enhancements. $3 million has been spent on upgrades to Albion station with the rest not known due to commercial considerations. Similar applies for the Boronia station upgrade. A previous station upgrade program will continue with $24m funded. Caulfield Rationalisation will be winding down, presumably complete by the time the Metro Tunnel commences service. Tarneit will get a new station by the end of 2025-26. 

Like the Bus Plan, the Tram Plan appears in the State Capital Program but not Service Delivery. Expenditure here will peak around $46m in 2024-25. Kananook train stabling and maintenance, rail infrastructure renewal, new metropolitan trains, new trams, ticketing and commuter car parks are other big ticket items. 

You'll all be interested in airport rail (branded 'Suburban Rail Loop - Airport'). Over $1b has been spent on this, with $132m more projected for 2024-25. However we won't see the benefits for some time, with a note saying it's delayed by at least 4 years (ie 2033 completion at the earliest). 

As previously known, there is one discontinued project. This is Geelong Fast Rail which failed to get federal funding (p188). 

Salient points from Department Performance Statement

(see p123ff and 179ff)

Key pages to look at: 

* Page 125 - output summary with costs of delivering service

* Page 127 - bus services note the patronage and service km numbers (very small increase)

* Page 128 - has a number of bus routes upgraded metric. Leaving aside simple route counting being a poor way to assess service reform (as upgrades vary hugely in magnitude which this doesn't capture), DTP failed to meet target, with 28 the expected result for 2023-24 as against a target of 39. A lower target has been adopted (32) for 2024-25. Note that this is expected with no extra funding for services (apart from the Route 800 upgrade). 

* Page 131 - Metro train services. Continued recovery from the pandemic dips is expected. 190m is the expected 2023-24 outcome. Basically no increase in service kilometres is expected (hovering around 25 million per year). This puts trains in a per-capita service recession as population continues to grow. The total output cost is however rising, with a dramatically higher 2024-25 target ($1.651b) compared to $1.442 (in 2022-23). Value for money given this lack of increase in service needs to be worth considering as DTP approaches rail refranchising. 

* Page 132 - Regional train services. Noteworthy has been the patronage growth, assisted by the V/Line fare reductions. Scheduled service kilometres are however static. 

* Page 133 - Metropolitan tram services. A similar story to metropolitan train regarding patronage. Service kilometres is static, so again this continues the long per capita service recession trams have been in for decades. 

Appendix A has performance measures for review by the Parliament Accounts and Estimates Committee. DTP's are on page 179. Despite the solemnity associated with parliamentary scrutiny, I'm not sure if some of these measures are taken that seriously or are even useful. 

DTP fell well short of achieving targets for minor rail network improvement projects in 2023-24. They propose to replace this measure with another. Even greater shortfalls were noted in the roads portfolio (eg safety barriers and line marking) while others have such tiny numbers (eg can be counted on one or two hands like walking and cycling projects) to be almost meaningless.  

Conclusion

The 2024-25 Victorian state budget could be described as 'very little new' in transport. It's a bit of a 'hangover budget' with the legacy of past borrowing apparently limiting what we can do now. Service continue to be starved on most modes with it declining relative to population. 

Metropolitan bus service reform has effectively stalled, with the Route 800 upgrade being the only budget bright spot. Areas that most miss out include (i) those growth area estates that missed out on GAIC upgrades and (ii) established areas (eg Dandenong North) that haven't had bus timetable improvements for decades. Some of these neighbourhoods have voted solidly Labor for decades but have swung so hugely away that results are now often decided on preferences.  

It is now clear that while individual capital projects may have merit, borrowing heavily for infrastructure risks leaving us with an unwillingness to back it up with service, leading to poor asset utilisation including timetables substantially unchanged for decades. Other cities like Sydney have also had large PT infrastructure programs but have been better than us at balancing this with expanding service frequency, especially off-peak. 
  

What's your thoughts about the 2024-25 state budget? These are appreciated and can be left below. 

Background: Service measures in past recent Victorian state budgets here