Treasurer questions Victoria’s use of $12.1b ‘slush fund’

May Be Interested In:Minister releases $2.2b for Suburban Rail Loop but flags ‘hurdles’ for more cash


Centre for Public Integrity director and University of NSW law professor Gabrielle Appleby, an expert in government integrity and constitutional law, said the effect was further obfuscation of the budget process and how public money was being spent.

“What has happened in Victoria is they have used the ambiguity and lack of limits on the advance to put in a whole new system that no one was aware of,” Appleby said. “This is just a slush fund for the government to use as it will.

The use of treasurer’s advances expanded 10-fold under former long-serving treasurer Time Pallas.Credit: Gus McCubbing

“It demonstrates that parliament has lost control of the purse strings.”

Economist Saul Eslake said the change in practice appeared to be a “derogation from the conventional means of accountability to parliament” for expenditure of public money.

A government spokesperson said Symes had sought advice from her department on how treasurer’s advances were being used.

“Our major projects provide significant value to Victorians and the public deserve to know that public funds are being used for public benefit,” the spokesperson said.

“While we have improved transparency via annual reporting, the treasurer has asked the Department of Treasury and Finance for advice about the ongoing use of treasurer’s advances to ensure Victorian taxpayers have certainty in how their money is being spent.”

This masthead previously revealed that in 2023-2024, treasurer’s advances were used to provide $1.36 billion for the Suburban Rail Loop, a $1.45 billion top-up to public hospitals and $380 million to meet the contractual penalty of dumping the Commonwealth Games.

In total, advances were used to funnel $9.6 billion into 161 projects. This is a 10-fold increase since the first year of the Andrews government, when $991 million was held in treasurer’s advances.

At the start of the pandemic, advances were used to cover an additional $10 billion for Victoria’s emergency public health response. A similar approach was taken by the federal government, which put a combined $35 billion into treasurer’s advances during the two financial years most impacted by COVID-19.

Centre for Public Integrity director Professor Gabrielle Appleby.

Centre for Public Integrity director Professor Gabrielle Appleby.

The auditor-general examined Victoria’s use of treasurer’s advances in November 2020 and gave the government a clean bill of health, finding that all advances were used to meet urgent expenses.

The Centre for Public Integrity, in an issues paper provided to this masthead, is alarmed at the mission creep since the COVID-19 crisis eased.

“The practice that is developing in Victoria sees the parliament appropriating amounts of money for no stated purpose, available to government to use as it sees fit and increasingly with no evidence that the expenditure was unforeseen and urgent, as should be the strict conditions for its use,” the paper warned.

“Victoria is manifestly out of step with other jurisdictions in a way that fundamentally undermines the principle that parliament should authorise the moneys to be spent for specified purposes.”

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Shadow treasurer James Newbury said the government approach increased the risk of misused funds and corruption.

“Taxpayer money should not be transferred into private slush funds where there is no proper oversight,” he said. “The Centre for Public Integrity has exposed that Victorian Labor is nation leading in their improper financial behaviour.”

Barrett, a former chief of staff to former federal treasurer Wayne Swan, told the estimates hearing that treasurer’s advances were used to hold public funds for large infrastructure projects in a central contingency, rather than by government departments or agencies managing the projects, as a way of exerting tighter control over the expense of public funds.

He said the Victorian government had introduced more reporting requirements for treasurer’s advances to provide greater transparency and more information about what advances were used for.

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The explanation did not convince Eslake, who pointed to Victoria’s difficulty in delivering infrastructure projects within budget and restraining government spending.

“It would only hold water if Barrett were able to show that doing it the way they are now doing it resulted in greater discipline over spending and demonstrably showed there was a reduce risk of cost overruns,” he said. “I didn’t read anything in what Chris Barrett said that led me to think that would be the case.”

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