The Victorian opposition has walked back from its claim that federal funding for the East West Link tollway project underpinned the state's 2013/14 budget surplus.
Faced with media reports of an error and the Victorian treasurer claiming he was completely wrong, shadow treasurer Tim Pallas now says there may be a contradiction in the budget papers.
Mr Pallas points to a budget document which notes surpluses incorporate Commonwealth grants of $1.5 billion for the East West Link eastern section and a further $1.5 billion for the western section.
"OK I accept that there could be some contradiction in a budget," he told ABC radio on Wednesday.
He said Victorian Premier Denis Napthine and Prime Minister Tony Abbott stood shoulder to shoulder a week before the state budget with Mr Abbott saying there was $1.5 billion for one section of the link and another $1.5 billion coming for the other section.
"That money should therefore have been incorporated into the accounts ... if it hasn't the question has to be asked why not?"
The opposition had earlier claimed the Victorian budget contains a $1 billion allocation of Commonwealth funding, for the East West Link, and this had effectively turned a $65 million deficit into a $935 million surplus for 2013/14.
Treasurer Michael O'Brien on Wednesday said that while funding for the tollway was included in the forward estimates, not one dollar of the federal funds was included in the 2013/14 accounts.
"We had not accounted, or assumed, one dollar in this current financial year and that is where Mr Pallas is completely wrong," Mr O'Brien also told ABC Radio.
"Mr Pallas is claiming we'd be in debt if not for a late payment from the federal government ... He is out by a billion dollars."
Mr O'Brien said the Labor opposition either could not read a budget paper or was attempting to mislead Victorians on the state of the budget.
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