In 2021 Josh Frydenberg looked Beijing in the eye and killed a $300m takeover of builder Probuild, declaring “national security says no.” Probuild collapsed shortly after, taking out thousands of jobs & billions in unfinished projects.
Four years later Victorian Treasurer, Jaclyn Symes, is one cabinet tick away from saying “yes please” to $30-50 bn & China becoming the prime 50-year partner bank-rolling Victoria’s Suburban Rail Loop. Same country, different spreadsheet. The security gate closed; the economic door is now open.
1. The Beijing photo-op that matters
Symes quietly lodged her overseas travel return on 26 Aug: “Meetings with China Development Bank, 17-19 Aug 2025, Beijing.”
The CDB’s own social-media feed shows her shaking hands with vice-president Liu Zhongyi under the bank’s Sanlitun HQ chandelier.
Translation: term-sheet negotiations are board-resolution away from becoming a cabinet submission this Spring.
2. Why Victoria caved
- COVID bill: $69.5 bn lost state output, longest lock-downs on Earth.
- Net debt: ≈ 25 % of GSP; interest on track to eat 8 % of all revenue by 2026.
- Moodys/S&P road-show (New York, Sept 2025): Symes was told by Moody’s that Victoria will only “Keep AA if you borrow less.”
Political poison to stop SRL or borrow more, either way.
3. The secret sauce in the leaked SRL term-sheet
- 25-year bullet, coupon 3 %
- Local-content floor 30 % steel, signalling, tunnellers can all be imported.
- Student-fee conduit: Melbourne universities bill Shanghai families in RMB; proceeds sweep straight to China Development Bank.
Moana scholarships for Pacific Islanders to study in both Shanghai & Melbourne learning from the best of East & West. - Most-favoured-state clause: any other Aussie borrower gets the same grid within five years: hello Tasmania, hello Queensland 2032 Olympics.
4. Domino #1 – Tasmania by the numbers
- Population: 550 k; net debt already 180 % of revenue.
- Interest bite: 6 % today → 8 % if downgraded (erasing Canberra’s GST top-up).
- Macquarie Point stadium + cruise terminal: ~A$2 bn.
Treasury’s printed fix: copy-paste the Victorian facility, swap “rail” for “stadium”, keep the AA+ façade intact.
Once two states refinance outside the Moody’s universe, domestic super-funds lose volume, liquidity thins, everyone else’s cost of capital rises except the states inside the Chinese tent. Net result: a two-speed federation where Beijing sets the price of infrastructure & Canberra watches with Envy.
