Malcolm Turnbull has announced a $95 million grant to help deliver the extension of the Gold Coast light rail line in time for the 2018 Commonwealth Games.
Promising to be an infrastructure prime minister who doesn't discriminate between types of transport, Mr Turnbull backed the project his predecessor Tony Abbott refused federal funding for unless the Queensland government privatised assets.
Mr Turnbull says he will take a pragmatic approach to funding infrastructure with "no ideology involved".
"I aim to be, I will be an infrastructure prime minister that supports all infrastructure on the basis of its merits," he said.
"So we will support public transport where that's the best outcome, the best value for money, the best outcome in terms of Commonwealth investment and the same goes with roads.
"There is no reason to discriminate between one mode of transport and another - you need everything."
However, the prime minister denied funding the light rail extension to distinguish himself from Mr Abbott.
Mr Turnbull explained the project was absolutely essential for the economic development of the region and the 2018 Commonwealth Games.
"Our cities are the crucibles of innovation, of enterprise - it's where so much of our GDP was created and it's vital that they have the right infrastructure, whether it's telecommunications infrastructure or transport infrastructure like this," he said.
"Public transport infrastructure is essential, it is good for you - people that use public transport walk more often don't they?"
Gold Coast Mayor Tom Tate replied: "They do."
"Tom has become much fitter since he started getting the light rail," Mr Turnbull joked.
The PM also said people meet new people on public transport.
Queensland Premier Annastacia Palaszczuk said it was refreshing to have a prime minister who was prepared to commit to public transport and who recognised that Queensland was a rapidly growing state.
"I intend to work very closely with Malcolm over the coming year to make sure we develop and implement the best for Queensland," she said.
"This is a new era of co-operation."
Mr Turnbull said he also looks forward to examining the business case for a new stadium in Townsville.
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