Regional pothole patching to be cut amid pledge to rein in Big Build

Spending on the state’s Big Build projects is predicted to drop over the next four years despite warnings of the impact of oil prices on construction.

There’s also concern that while the government is committing more than $1 billion for road maintenance, the amount of spot patching on regional roads has been significantly scaled down.

Performance measures detailed in Tuesday’s budget show Victoria has set a target of patching 74,000 square metres of roads in regional Victoria in 2026-27, compared to 95,000 square metres expected to be completed by the end of this financial year.

But the budget papers show this is a significant revision down from previous years, with 566,000 square metres patched in 2024-25.

Patching involves filling in potholes and cracks with bitumen mixes and compacting it down to provide a quick improvement to road quality.

The Allan government, when criticised about its road maintenance program before, said patching was a “short-term measure” providing immediate relief but does not show the full amount of maintenance being performed.

Instead, the Department of Transport and Planning has claimed it is focusing more heavily on longer-lasting treatments such as resurfacing.

The budget papers show 2.7 square kilometres of road area are scheduled to be resurfaced or rehabilitated outside Melbourne in 2026-27.

This represents a tapering off from the last two years, with 3.5 square kilometres repaired in 2025-26 and 3.2 square kilometres in 2023-24.

However, the 2025-26 result was well above the target set in last year’s budget, 2.7 square kilometres, as the government focused on projects that were easier to deliver.

In outer Melbourne, the budget has set targets of 496,000 sq metres in repairs for this year and next, compared to 802,000 square metres fixed in 2023-24.

The figures come as the government committed a record $1 billion for road maintenance, which it says will repair 200,000 potholes.

Nationals leader and opposition roads spokesman Danny O’Brien said the budget papers showed the government falling short on most performance measures in this area.

“That means we’re paying more, and we’re getting less, and we’re certainly getting less in regional Victoria, there’s a surplus of spin,” he said.

Some of the budget’s revised road figures for resurfacing and rehabilitation can be attributed to the construction blowouts.

For inner Melbourne, the department will fall 68,000 square metres short next year because of rising costs. It will maintain its 2025-26 figure, 262,000 square metres, as its new target.

The budget papers quote “the increase in unit costs to complete maintenance work” to explain the shortfall.

High oil prices triggered by war in the Middle East have had flow-on effects to multiple parts of construction, including petrol for trucks and machines, bitumen and plastic parts.

The Australian Constructors Association has warned businesses are at risk of going under because of pressures such as fuel levies and price hikes as big as 35 per cent on essential materials like PVC pipes.

Despite this context, the budget is banking on infrastructure spending coming down.

It forecasts the Big Build spending spree to slow from $21.4 billion this year to $15.5 billion in 2028-29 and $15.3 billion in 2029-30. That remains more than three times higher than average infrastructure spending in the decade to 2014-15.

The government is not yet estimating a blowout to this spending pipeline because of cost pressures, with some of it to be absorbed into contingency funding set aside for every project.

But if costs continue to escalate well beyond these contingencies, the government could be forced to negotiate with builders on contract variations as it did with the Metro Tunnel and West Gate Tunnel.

Treasury analysis of all 458 budget-funded projects shows a 0.2 per cent increase in project costs since last year’s budget.

“Recent cost increases in fuel and other key supply chain inputs will create escalation pressure across the construction program,” the budget papers say.

Tuesday’s budget adds $4.4 billion of new projects to Victoria’s infrastructure pipeline, bringing the total to $181 billion.

The budget reveals that the Suburban Rail Loop East project will have spent almost $6.7 billion by June 30, with another $3.2 billion expected in 2026-27 as tunnelling between Cheltenham and Box Hill gets underway.

The project – estimated to cost up to $34.5 billion – now has $13 billion of construction contracts locked in.

For commuters like Nicholas Zull, who travels from his home in Glenroy to the CBD three days a week, the government’s commitment of $1.6 billion into public transport, including $105 million over four years to boost timetables on more than two dozen bus routes is welcome, but does not go far enough.

“We’ve had an increase in population density in the area, but that hasn’t been met with improved public transport services. That’s why you see so many people driving,” he said.

During weekdays, buses on the 534 route, which Zull catches to connect with the Upfield and Craigieburn train lines and is not included in the government’s boost, only run every 30 minutes. On weekends, it’s every 40 minutes.

“It doesn’t matter if it [public transport] is free. More people would be likely to use it – and spend the money to use it – if there were sufficient services.”

More Victoria budget coverage:

• News story: Labor unveils election-year splurge despite debt soaring to $199 billion
• Live blog: Treasurer Jaclyn Symes hands down the state budget
• Winners and losers: Cost-of-living relief for commuters, but pain in store for future taxpayers

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