When Labor premiers faced a problem, they often turned to Tim Pallas for a solution. Whether it was Steve Bracks navigating a minority government in 1999, or Daniel Andrews during the pandemic, Pallas has been a trusted strategist and a steady hand for more than two decades.
But the current premier, Jacinta Allan, now faces her first dilemma without Pallas’ counsel after more than a year in the top job: who to replace him as treasurer.
Pallas, the self-described “humble staffer who maybe got a little bit ahead of himself”, announced on Monday he would be quitting politics after a decade as treasurer, 14 years as a minister and 18 years as the member for Werribee.
“This has been the great honour and privilege of my life,” he said.
The former union official said there was “no right time” to leave politics but he had recently marked 10 years in the role – making him Victoria’s longest-serving standalone treasurer – and last week released an economic growth statement and mid-year budget update.
“I have to accept the basic proposition that I don’t have exclusive tenure on the role,” he said. “We do need to present the opportunity for renewal, a new treasurer, a new perspective, new insights – all of those things I think are important.
“Good governments know that they have to renew themselves.”
Pallas said his only regret was having to “pour cold water” over the ambitions of his cabinet colleagues.
He openly admitted to “creative differences” with the Allan, though he defended their “frank, candid, and sometimes brutally honest” conversations.
“That’s what a good treasurer does,” Pallas said.
Politicians across the spectrum have paid tribute to Pallas as a man of integrity – kind, generous with his time and with a wry sense of humour, someone who lived by his father’s motto to “give more than you get.”
Allan said Pallas was a friend of more than 25 years, who had one of the most difficult jobs during the Covid pandemic alongside the premier and health minister. She also made reference to his work to make wage theft a crime, introduce portable long service leave and establish an mRNA facility in Melbourne.
In what can best be described as a backward compliment, the opposition leader, John Pesutto, described Pallas as “the best of the incompetent lot in the Labor party”.
“Regrettably, on all key measures Tim Pallas’s legacy will be one of enormous debt that Victorians in the present generation and in future generations will be saddled with,” Pesutto said.
As of Friday’s budget update, Victoria’s net debt stands at $155.2bn, a huge rise from the $21.2bn debt Pallas inherited in 2014. It is forecast grow to $187.3bn by 2028.
The update also essentially doubled taxes on property owners by replacing the fire services levy with an emergency services levy worth $2.1bn. This is on top of his introduction of $8.6bn in “temporary” levies to pay off pandemic-related debt, the mental health levy, increased vacant property and land taxes and the Airbnb levy, which comes into effect in January.
But Pallas maintains he never employed “austerity” and always looked after the welfare of the Victorian people, particularly “those who need government support and assistance”.
Pallas stayed on when Andrews – who rose to cabinet alongside Pallas – quit politics in 2023, providing an element of continuity for the Allan government.
But now, his departure follows that of a long list of senior Labor ministers who have left politics in recent years, which include former deputy premier James Merlino, former health minister Martin Foley and former police minister Lisa Neville, who all stepped down ahead of the 2022 election.
While it is up to Allan to appoint a new treasurer, several names have emerged as potential successors, including the assistant treasurer, Danny Pearson, the government services minister, Gabrielle Williams, and the deputy premier, Ben Carroll, who has previously expressed an interest.
One Labor minister described the portfolio as “poisoned chalice”.
The Labor caucus will also need to elevate a new minister to cabinet, with Nick Staikos and Gary Maas among the candidates.
Allan said there would be a cabinet reshuffle before Christmas.
The Victorian Labor branch, meanwhile, will meet on Tuesday to discuss a candidate for the upcoming byelection.
While the party chose not to field a candidate for the Prahran byelection, this is not an option in Werribee, which is considered Labor territory and is held by a 9.2% margin.
Last election, Pallas fended off a challenge from an independent candidate but the seat is now being targeted by the Liberal party, which saw an 8.7% increase in first-preference votes in 2022.
Labor sources are hopeful the byelection can be held at the same time as Prahran’s on 8 February, which would put pressure on the Liberal party’s resources. The party is also being warned not to “parachute” a candidate into the seat – as Pallas was in 2006.
Asked whether Labor should preselect a candidate from a diverse backgroundon Monday, Allan said: “As someone who has lived and worked in my community for the past 25 years, having good strong local connections is a good place to start”.
As for Pallas’s legacy?
He said: “My life in public office is now at an end, and it is your right to eulogise whether my passing is a good or a bad thing, it is entirely up to you.”
