VicRoads could allow a private company to control licencing and registration, in an effort to update the department's IT system.
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The Victorian Government has announced it will hand over parts of VicRoads operations to private companies, in an effort to rebuild the department's antiquated computer systems.

The government says the plan will deliver better customer service for Victorian road users, but has refused to rule out cost increases.

"We’re going to put in place a joint-venture partnership with the private sector to ensure that we get a modernised, adaptable service," Treasurer Tim Pallas told a media briefing.

"This is not a privatisation, it’s effectively a partnership that hopefully will work for the Victorian people ... [and] hopefully get them the IT systems they deserve."

In exchange for delivering a modern administrative IT system, the company chosen will be handed the reins to operate the state's registration, licensing, and custom number plate services on behalf of VicRoads.

The proposal means new drivers will potentially be able to sit their learner's permit test online.

"It is an innovative approach to ensure that we can get all of the adaptability and the flexibility that the private sector brings, but by retaining the government’s ownership of this asset," Mr Pallas said.

The idea is not new, however, with the Treasurer first raising the idea in State Parliament in 2019.

Lisa Damanin from the Australian Service Union has criticised the plan, telling ABC News "No other state government in Australia has part-privatised a road traffic authority."

"Victorians should not be the guinea pigs testing the impact of private sector partnerships on the delivery of such an essential service."

In 2019, licensing and registration added roughly $1.8 billion to Victoria state coffers.