NSW short-changed by Chalmers on key infrastructure funding

The federal government’s investment in state infrastructure will leave NSW with less road funding per person than Queensland, Western Australia and South Australia.

The decision could stoke simmering frustration within the Minns government after the latest GST funding distribution gave NSW 82 cents in the dollar next year, while Victoria took home $1.06 despite that state’s soaring debt levels.

The federal budget has also allocated $267.8 million for a Western Sydney infrastructure plan, $50 million to upgrade the notoriously slow Sydney-to-Canberra rail corridor and $45 million for safety improvements on the M1.

An analysis of the federal government’s road investment program in this year’s budget reveals $10.8 billion will be invested in NSW until mid-2030, representing 28 per cent of the $38.7 billion spent across Australia.

Over the five-year period, the funding in NSW represents $1217 per person.

Under Treasury estimates, the population of NSW is forecast to reach 9.06 million by 2029-30. The state will continue losing residents to other states, with more than 80,000 people projected to leave NSW by 2030. Most will move to Queensland.

Comparatively, the $13.5 billion invested in Queensland averages out at $2272 for each resident. Similarly for South Australia, the $7.1 billion invested over the forward estimates represents $3647 for each of the state’s 1.95 million residents.

Western Australia will receive $4.4 billion, or $1416 per person.

The federal government will invest $8.27 billion into Victoria’s roads, about $1127 per person. Another $10.8 billion will be invested into the state’s rail network, with $3.8 billion for Suburban Rail Loop East in Melbourne invested over four years from 2026-27.

The road investment program delivers most of the Australian government’s investment in road infrastructure, according to the budget papers. The funding targets nationally significant projects that will improve the efficiency and safety of Australia’s road network. Funding is provided for road construction projects and network maintenance.

Other investments made by the federal government, such as the $1.38 billion Roads to Recovery program, which is paid directly to local governments, are not captured in the road investment fund.

The budget has allocated $659.6 million for the Rail Authority to undertake development works for the proposed Newcastle-to-Sydney high-speed rail project.

The Commonwealth’s investment in NSW road infrastructure will peak in the 2027-28 financial year with a $2.45 billion injection, before falling to $1.88 billion by the end of the decade.

Earlier this month, NSW Premier Chris Minns once again criticised the Commonwealth’s GST distribution, saying it was unacceptable his state will get more than 20 cents less in the dollar than Victoria.

”Clearly, NSW is getting hammered when it comes to the GST,” he said on May 7. “Something’s got to change, and we’re not going to give up.

“We’re a bigger state. The differences are acute in NSW. Ultimately, this is NSW taxpayer money being spent in Victoria and other states.”

The current distribution means NSW will receive $1.4 billion less than Victoria despite having a population with 1.5 million more people.

Get across all our coverage

• Winners and losers: This is who benefits from the budget, and who misses out
• Tax changes: Negative gearing, CGT, family trusts and how this will affect the property market
• Generational divide: Baby Boomers, Gen X, Millennials and Gen Z, this is what the budget means for you
• Shane Wright’s analysis: ‘The war against Iran is the dark cloud over this entire budget’
• Cut through the noise: Subscribers can sign up to our weekly Inside Politics newsletter