Tim Pallas could hardly have wished for a better weekend. On Friday night the Dogs won. Then on Sunday he got a phone call with news the Port of Melbourne was going to be leased for $9.7 billion – almost $3 billion more than expected.
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"To say that this is a good day – that it was a pleasant surprise – I think would be an understatement," the state Treasurer said on Monday.
Add in money the cash-strapped Turnbull government should hand over under its asset recycling deal, and Victoria can expect a total of more than $10.5 billion.
The cash will initially be parked in the Victorian Transport Fund, before being ploughed back into a various projects, including level crossing upgrades, the Melbourne Metro and the Western Distributor.
The windfall will not show up as an increase in the budget surplus. Instead, it will be included in the "capital account" half of the budget, triggering an initial reduction in the state's debt. More money from the port lease means more headroom to borrow for other projects.
The winning consortium has obviously done the maths. By handing over $9.7 billion up front, it reckons it is getting good value by purchasing an asset expected to generate returns over the next 50 years.
You would hope the Andrews government, too, has done the maths, on behalf of the people of the state. Victoria is trading away a productive asset. The judgment is that reinvesting the money in infrastructure will create an even bigger social return in coming decades.
The quality of the projects will be of crucial importance. From a productivity point of view, eliminating level crossings is a no-brainer, with enormous benefits for both the road and rail networks. But what else?
The opposition on Monday wasted no time spruiking its own suggestions about how the money might be spent.
It now reckons there is no excuse not to build the East West Link or a new station at South Yarra as part of the Metro Rail project.
It is also wants to scrap a proposed levy to cover the cost of implementing the Royal Commission into Family Violence recommendations. And it claims the government must now dump the "cheap and nasty" sky rail along the Cranbourne-Pakenham rail corridor. Among other things.
You would hope a bit more rigour than this applied, particularly after the haphazard and politically fraught approach to infrastructure in recent years.
By the end of the year, Infrastructure Victoria will have handed in a list of priority major projects. By the middle of 2017 the government is expected to release a response. And so the debate will begin again as the 2018 election looms.
