The Treasurer has set off a firestorm by revealing in State Parliament that parts of VicRoads could be run as a collaboration between the public and private sectors with unions warning that such a move would be disastrous.

In question time on Tuesday, Tim Pallas said that although VicRoads' licensing and registration arms would not be fully privatised the government would not dismiss working with the “private sector” to improve the delivery of road services.

Some parts of VicRoads could be privatised. Credit:VicRoads

“Can I be very clear we won’t be divesting assets and operations of government. We just won’t be doing it,” Mr Pallas told Parliament.

“[But] we will not dismiss the opportunity to work in co-operation with the private sector to provide better services.”