Fund the Outer Suburbs

The structural reason growth-area public transport chronically under-delivers is that the recurring budget that funds bus operators is decided in a separate process from the capital budget that funds stations and roads. Growth does not wait for the two processes to synchronise: new estates are approved under planning controls, built under construction contracts, and occupied by residents, before the bus service budget has been adjusted to serve them. VAGO flagged this dynamic in its 2013 growth-area transport audit, which found a roughly $197 million per year recurrent funding gap for bus services alone, within a broader backlog north of $10 billion. The 2024 RMIT research confirmed the same pattern is still running: 88% apartment growth against 5% public transport service growth between 2004 and 2022.

The Victorian Grants Commission administers formula-based grants to councils based on population, disadvantage, and service need. A dedicated growth-area transport levy, modelled on the French Versement Mobilite, would impose a payroll surcharge on medium-to-large employers in designated metropolitan employment hubs, with revenue ring-fenced for transit capital and recurrent bus funding in growth areas. Victoria already has the legislative precedent for a hypothecated payroll surcharge: the Mental Health and Wellbeing Levy, in effect since 1 January 2022, adds 0.5% to payroll tax for employers with national payrolls above $10 million, with revenue legally ring-fenced for mental health services. A transport equivalent would sit alongside, not replace, the existing payroll tax and the Congestion Levy, combining the hypothecation mechanism from the Mental Health Levy with the geographic focus of the Congestion Levy's CBD and inner-suburb zones.

In France, the Versement Mobilite accounts for 51-60% of operating and capital budgets for metropolitan transit networks in the Paris Ile-de-France region, where the levy ranges from 1.6% to 2.95% of the wage bill depending on the county. Victoria's payroll tax base for employers above $10 million in national payroll is the same base the Mental Health Levy already taps. A 0.25% supplement on the same base, ring-fenced for growth-area transit, would generate revenue in the range of hundreds of millions per year: this paper does not have a precise figure for Victoria's payroll tax base at that threshold, but DTF publishes the Mental Health Levy's annual yield which provides a denominator for the calculation.

A dedicated growth-area transit levy is a new tax on payrolls, which the business community will characterise as a cost impost on employers regardless of the hypothecation. The most credible counter-argument is that the levy is paid by businesses that benefit from the enlarged labour pool a better-connected outer-suburban network provides: a Melton resident who can reach a western suburbs employer without a car is a potential employee who currently cannot take the job. The administrative challenge is that ring-fencing the revenue requires either a dedicated off-budget fund (the Transit Capital Fund model) or a legally entrenched appropriation that subsequent governments cannot redirect, which requires primary legislation with explicit provisions against ministerial reallocation.

The Mental Health and Wellbeing Levy, in force since 1 January 2022, adds 0.5% on payrolls above $10 million and an additional 0.5% above $100 million, with revenue ring-fenced by statute for mental health services: this is the entire Versement Mobilite mechanism applied to a different purpose, demonstrating it is administratively and constitutionally workable in Victoria. The French Versement Mobilite has operated since 1971 and is the largest single revenue source for most French metropolitan transit networks. Scotland's Transport (Scotland) Act 2019 gave regional transport partnerships the power to levy workplace parking charges and cordon road user charges, with revenue hypothecated to local transport investment: this is the same principle applied to parking rather than payroll.

This requires a parliamentary majority to legislate both the Transit Capital Fund and a new transport payroll levy. A Fusion MP's role from one seat is to introduce the Transit Capital Fund Bill as a Private Member's Bill, establishing the model on the public record, and to use supply negotiations to extract a government commitment to a DTF costing of the 0.1% payroll levy yield and a VGC analysis of which LGAs would receive funding under the 60% outer-metropolitan allocation rule. Those costings are the one-seat deliverable: they turn the Transit Capital Fund from a policy aspiration into a costed proposal with an identified revenue source and a distributional model, which is the evidentiary threshold at which a minority government can include it in a budget bill without starting from scratch. In a minority parliament, the Fusion MP tables a budget amendment including the Transit Capital Fund as a condition of supply.