State governments are refusing to accept the Albanese government’s decision to defund 50 transport projects and delay others, as it attempts to fund cost blowouts and curb the inflationary impact of a $120bn infrastructure pipeline.
On Thursday, the infrastructure and transport minister, Catherine King, outlined the government’s response to the 90-day infrastructure review it had ordered in May. The review recommended 82 projects be scrapped, with the government to cut funding for 50 of them and another 31 to get rolled into transport corridors where it will be up to state governments to decide what to prioritise.
There will be “rescoping” of the planning and costings of 36 projects and addressing risks in another 56, while it also green-lit 100 further projects that are not yet under construction.
But the government does not accept all of the review’s recommendations. King says some of the projects were still considered “priority projects” after negotiations with the states, with allocated spending to be rolled over into “corridor” funding.
Plans to build fast train lines, as well as commitments to upgrade tracks to allow existing services to run more quickly, are among key rail projects axed across the country.
Some key projects – such as a train to the Melbourne airport – will go ahead, leading to praise from the Australasian Railway Association’s chief executive, Caroline Wilkie.
“We are in the midst of a once-in-a-generation infrastructure pipeline that will greatly enhance how Australia moves its people and freight,” she said.
The government also announced it would be increasing its contribution to other works, such as the Logan-Gold Coast faster rail and Western Australia’s Metronet.
But a range of road and highway promises are now unfunded, triggering fury from some premiers and treasurers.
It is also unclear which projects have been delayed and by how long, leading to criticism from the opposition’s infrastructure spokesperson, Bridget McKenzie, who said the government “has duck-shoved responsibility to the states to make decisions on which road upgrades and safety improvements will be axed”.
Here is what it means for some of the nation’s biggest projects.
Queensland
Value of projects now unfunded by the federal government: $449.5m
Despite losing considerably less under the review, outrage appears most intense from Queensland.
The premier, Annastacia Paluszczuk, says: “I want to make it very clear, again, to Minister King that this infrastructure review does not have our cooperation. We do not agree with this plan.”
Queensland is particularly concerned about the commonwealth’s approach on transport corridors, which they said would cap spending on the state’s most important road, the Bruce Highway.
The anger was also fuelled by an earlier announcement that the commonwealth is moving away from paying 80% for regional road projects, and will mostly split the cost evenly with states.
The deputy premier, Steven Miles, will lead a delegation of mayors to Canberra. The Queensland farmers’ federation and state’s trucking association will also join what he dubbed “team Queensland” to lobby for more infrastructure funding.
The main roads minister, Mark Bailey, told parliament that projects for the Bruce Highway will be in the firing line. Due to the rising cost of materials like concrete and bitumen, the price of projects is expected to increase – which would have to be paid for by the state, he said.
“So the federal government is forcing decisions on project cuts on to Queensland and that is not fair,” he said.
The largest project to lose funding is the Mooloolah River interchange upgrade on the Sunshine Coast. The government had previously committed funding of $160m, about 50% of the total cost of the project.
State government estimates put the cost to the Queensland budget at around $14bn over 10 years, with $6bn less for the Bruce Highway alone.
New South Wales
Value of projects now unfunded by the federal government: $5.4bn
The NSW government expressed “disappointment with a capital D” over the cut in federal funding for a number of major projects, including a key interchange between the M7 and M12 motorways in Western Sydney.
The treasurer, Daniel Mookhey, accused King of going back on her word after she had promised not to “yank” funding out of any project already being delivered.
“At the same time NSW’s population is surging the commonwealth investment is faltering,” he said.
“What’s even worse is that some of the projects for which the commonwealth has yanked funding are already in delivery.”
He says early analysis shows 18 projects may not go ahead because of the cuts.
“It’s clear that NSW … has been talking to the commonwealth but they haven’t been listening,” Mookhey says.
“Every dollar taken from NSW has to come back to NSW.”
Other axed projects include commuter car park upgrades at train stations in Kingswood, St Marys and Woy Woy – which were criticised by Labor as pork barrelling when first announced by the Morrison government.
A billion-dollar upgrade of the Great Western Highway through the Blue Mountains is among the biggest projects to lose commonwealth funding.
The infrastructure review also spells the end of plans to hasten the speed of trains between Newcastle and Sydney, with a plan to quadruple a 10km stretch of track between Tuggerah and Wyong now without funding.
Support for upgrades of several regional roads was also axed, including for the Bruxner Highway in northern NSW, and for planning works relating to the Gwydir and Oxley highways.
Victoria
Value of projects now unfunded by the federal government: $4.8bn
In Victoria, the most significant news to come out of the review was the decision to approve the long-awaited Melbourne Airport train line.
In 2020, the state and federal government each committed $5bn to the project. A business case released two years later estimated the project would cost $8-$13bn.
However, the government and the airport remain locked in a dispute over the project, with the latter insisting on a costlier underground station.
The premier, Jacinta Allan, said she hoped the three parties would “recommence negotiations” and come to an agreement.
Meanwhile, federal funding for 12 other projects is being cut, including $2bn for fast rail from Melbourne to Geelong.
The project was a commitment made before the 2019 federal election by the former Coalition government, and relied on matching commitment from Victoria. The then premier Daniel Andrews labelled the project a fantasy but then went on to match the funding.
Investigations for other “faster rail” corridors across Victoria will also lose funding, along with plans to upgrade the Frankston line to Baxter and a business case for a Melbourne Inland Rail intermodal terminal.
Upgrades on the Calder Freeway, the Mornington Peninsula Freeway, the Shepparton bypass on the Goulburn Valley Highway and the Western Freeway have been scrapped.
Other states
Projects to the value of $527m in Western Australia, and $494m in South Australia, have been axed. In Tasmania, this figure was $20m and in the Australian Capital Territory it was $3m.
Additional reporting: Sarah Basford-Canales, AAP
