Funding for major NSW transport infrastructure projects has been cut as the state government siphons extra money into hospitals and schools.
The budget, delivered on Tuesday, confirmed that a major upgrade to the Great Western Highway in the Blue Mountains, and the first stages of delivering fast rail connections from Sydney to Canberra, Newcastle and the south coast would be shelved.
Other significant infrastructure projects to be cut included plans to raise the wall at Wyangala Dam and to build a new Dungowan Dam.
The changes are estimated to have freed up more than $2.5 billion from the state budget.
"As a result of reprioritised funding, the NSW government has been able to increase investment in new and upgraded schools, hospitals and public transport infrastructure without the privatisation of public assets," the budget papers said.
A question mark also remains about the expansion of urban rail projects, despite the budget setting aside nearly $25 billion over four years for western, southwestern and Western Sydney Airport metro lines.
The budget notes the projects are subject to an ongoing review, which is due to deliver its recommendations by the end of the year.
Treasurer Daniel Mookhey said the government was doing its due diligence on the Sydney Metro West project, which Labor was yet to commit to building, despite putting aside $13.7 billion over four years in the budget for the new line.
"We are borrowing so much of that money from our kids and grandkids," he said.
"This government is not just handing over a free cheque to people who wish to build these projects."
A total of $116.5 billion will be spent on infrastructure over the four years from 2023/24, $72.3 billion of which will go towards transport projects.
Of the remainder, $13.8 billion will be spent on hospitals and health facilities, and $9.8 billion on schools and education facilities.
Both the health and education spending was up on that allocated under the former coalition government in the 2022/23 budget, but forecast transport spending was down $4.4 billion over the forward estimates.
The government is aiming to balance out infrastructure spending at about two per cent of gross state product by 2026/27 to help reduce debt, which is predicted to continue rising over the forward estimates.
