NSW fights feds on Pacific Highway, rail

12 Jun 2012, 12:26 pm   -   Source: AAP

The NSW government has upped the ante in its war with the federal government over roads funding in the state budget.

The NSW government has escalated its war with the Commonwealth by failing to match its funding commitment to duplicate the Pacific Highway by 2016, and by increasing funding for the contentious North West Rail Link.

Canberra pledged to provide $3.9 billion over four years in the May budget to upgrade the deadly stretch of highway in northern NSW, on the proviso NSW match its commitment.

But Treasurer Mike Baird has instead pledged a much smaller $1.5 billion over the same period, insisting that NSW commit to 20 per cent of building costs.

The state government argues its 20 per cent commitment is identical to an agreement reached between the Commonwealth and the former NSW Labor government.

Federal Infrastructure Minister Anthony Albanese has previously argued that the 2009 agreement was a one-off when the Rudd government implemented a big-spending stimulus program at the height of the global financial crisis.

The state government said the Commonwealth's reduced contribution, from 80 per cent previously to 50 per cent, was leading to a $2.3 billion funding gap.

"However, this funding gap will increase to $4.6 billion if the Commonwealth insists on only matching NSW funding dollar for dollar," NSW Treasury papers said.

Rail projects are another source of tension between NSW and the Commonwealth, with the state government pledging $3.3 billion over four years for the North West Rail link.

Infrastructure Australia has declined to recommend Commonwealth funding for the project to connect suburbs in northwest Sydney with Epping.

The federal government is instead dedicated to building a Parramatta to Epping rail link.

The South West Rail Link gets another $1.4 billion over four years from NSW.

With Infrastructure NSW to announce a 20-year plan in September, Treasurer Mike Baird has announced that $30 million would be put aside to start the planning for a new Sydney motorway.

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