Secret public transport tax axed as premier apologises

A tax secretly slapped on public transport commuters will be scrapped, with a state's newly-minted premier offering an apology and denying involvement in its creation.

A report by the Victorian Auditor-General's Office into Melbourne's Suburban Rail Loop on Wednesday revealed a previously undisclosed levy was placed on all public transport fares in metropolitan Melbourne and regional Victoria.

The charge was introduced as an annual one per cent increase in fares, on top of yearly inflation rises, from the start of 2025.

It was not acknowledged by the government or Transport Victoria in their public communications about fare increases in 2025 and 2026.

Premier Ben Carroll, who was public transport minister in 2021 when the charge was approved, on Thursday vowed to abolish the levy.

"There'll be a proper cabinet process to come, but it's my intention and the treasurer's intention to abolish that charge," he told reporters on Thursday.

"I'm a premier taking the state in a new direction. Victorians do deserve better public transport. They also deserve to know what their money is buying."

Mr Carroll said he was having conversations with the head of his department to ensure there were not any other similar unannounced charges.

"There was no transparency on this charge, its creation or implementation."

Mr Carroll, who replaced Jacinta Allan as premier in late July, said he was "not part of the creation" of the levy after repeatedly refusing to "relitigate the past".

"It was created in 2021. I was not part of the BFC (Budget and Finance Committee) process," he said.

The auditor-general said the state Labor government had planned to allocate 60 per cent of revenue collected through the levy, estimated at $4.8 billion in net present value terms to 2062, to fund the Suburban Rail Loop East.

The Suburban Rail Loop is a planned 90km orbital line stretching from Cheltenham in Melbourne's southeast to Werribee in the outer-west via the airport at Tullamarine.

The 26km eastern section from Cheltenham to Box Hill is slated to cost up to $34.5 billion, with a target delivery of 2035.