Victoria needs money. After years of pandemic-driven spending and cost blowouts on major projects, the state government is turning to its property portfolio to ease budget pressures. A planned $50 million sale of surplus VicRoads land next to the EastLink tollway is the latest example of how governments monetise assets when operational budgets grow tight.
The land in question sits alongside the M3 tollway in Victoria's southeastern suburbs. VicRoads acquired it years ago for the original EastLink construction project, compulsory purchasing properties necessary for the road's alignment and operations. But road planning changes, and land earmarked for future expansion or ancillary projects often becomes redundant. Once declared surplus to transport requirements, such properties enter a different cycle: onto the open market for sale.
This is not inherently wasteful. The Victorian Government Landholding Policy explicitly requires that proceeds from surplus land sales be reinvested into essential infrastructure such as schools, hospitals, and public transport. In principle, this creates a recycling mechanism; dead assets become active funding streams.
Yet the pattern matters. When does a government sell land not because new infrastructure demands it, but because the operating budget demands cash? The Victorian Auditor-General has flagged concerns about government land sales. A decade of property disposals generated over $928 million in revenue, but the auditor found inconsistencies in how agencies valued best outcomes and whether sales truly maximised public benefit. Some land sat for years before sale. Some was undervalued. The accountability frameworks, while present, left gaps.
The EastLink sale also illustrates a fiscal reality. Victoria runs substantial budget deficits partly inherited from pandemic spending, partly from cost blowouts on major projects. Rather than adjust spending or raise taxes, successive governments have looked to asset sales as bridge financing. Roads and Transport Victoria holdings totalling thousands of properties across the state represent an enormous balance sheet. What better time to prune them than when budgets are stressed?
The counter-argument deserves serious consideration. Governments should own property that serves the public interest, not hold it as a speculative asset or convenience. Selling land next to a major tollway (which itself generates revenue through user charges) might be prudent stewardship if that land truly does not advance VicRoads' operational mission. Market forces would allocate it more efficiently. And $50 million toward hospital upgrades or school maintenance serves a clear public purpose.
The question is whether Victoria is managing its property estate strategically or resorting to asset sales as a substitute for fiscal discipline. Victorian Government policy requires that surplus land first be offered to other government agencies and councils through a "first right of refusal" process before public sale, which is sensible. But if agencies routinely need cash and routinely discover assets are surplus, that suggests either planning failures or systematic underinvestment in infrastructure that forces asset liquidation to fund operations.
Monitor this transaction carefully. It will probably be smooth and legitimate. But a pattern of increasing land sales, especially of strategically located properties like transport corridor sites, signals that Victoria's budget challenges run deeper than any single real estate deal can solve.