Infrastructure cuts loom as Suburban Rail Loop grant evens up Victoria’s ledger

The budget papers also reveal $2.8 billion in savings from cancelling projects, mostly those funded through the previous government’s Urban Congestion Fund and its commuter car park scheme.

For the first time in almost a decade, the budget makes no mention of Melbourne’s East West Link project, removing the $4 billion previously held as a contingency in a “locked box” by the Coalition.

Victoria has for years bitterly claimed it has been short-changed on federal infrastructure funding. The state, which makes up about one-quarter of Australia’s population, was allocated just 5.9 per cent of new infrastructure spending in the Morrison government’s final budget, delivered in March.

The inclusion of funding for Victoria’s Suburban Rail Link appears to even up the ledger.

According to the budget, a total of $8.1 billion has been set aside for new infrastructure investment over the next decade from 2022-23, $2.6 billion – or 32 per cent – of which will go to Victoria.

But about 85¢ of every dollar of new infrastructure funding being given to Victoria will go to the Suburban Rail Loop. The project has not been assessed by either Infrastructure Victoria or Infrastructure Australia.

Loading

On Monday, federal Finance Minister Katy Gallagher insisted the project stacked up, pointing to the state government’s business case, which estimated a return of up to $1.70 for every $1 invested.

This contrasts with the view of Victoria’s auditor-general, who last month found the project would generate a loss, making 51¢ for every $1 invested under more conservative assumptions recommended by the Treasury and Infrastructure Australia.

Cut through the noise of federal politics with news, views and expert analysis from Jacqueline Maley. Subscribers can sign up to our weekly Inside Politics newsletter here.