NSW won't accept cuts to key infrastructure funding

Bianca De Marchi/AAP PHOTOS

Talks between the NSW and federal governments over funding for key infrastructure are continuing but there is no guarantee the state will have its previously promised allocation restored.

Federal Infrastructure minister Catherine King last week announced the government's intention to strip multiple state projects following an overhaul of planned spending.

NSW, the nation's most populous state, will lose out on federal backing for the largest number of projects of any jurisdiction, leading to a potential $1.4 billion hit to its budget.

Money will be taken away from a series of road projects, including Commonwealth support for a key interchange due to open in 2026 to provide better road access to Western Sydney Airport.

Roads Minister John Graham said state officials had been in "good" weekend talks with their federal counterparts, but there were no guarantees about what the state would receive.

The NSW government was unhappy with a decision that would see other states better off, he added.

"We don't accept that's the final settlement (and) we don't accept that's where things should rest," he said.

As part of the infrastructure overhaul, more funding was provided for some projects, including $2.725 billion for an Adelaide motorway and more than $2.5 billion extra for various road and rail developments in Queensland.

In comparison, NSW received about $112 million extra in funding for six projects.

Premier Chris Minns said the state government was not "whingeing" for the sake of it.

"The taxpayers of NSW deserve to have access to world-class education, functioning hospitals and infrastructure that's been promised," he said.

"NSW taxpayers send a lot of money to the Commonwealth government to run processes and infrastructure and we expect our fair share, not to have it funnelled or diverted to other states."

Treasurer Daniel Mookhey said the decision to pull funding from the $1.7 billion M7-M12 interchange near Western Sydney Airport was particularly disappointing given its construction was already in progress.

"When (Ms King) said that the federal government wouldn't be yanking funding for projects that were already under construction, we expected, therefore, that money to be safe," he said.

The Commonwealth had previously committed $110 million towards its delivery.

"The project is already in construction, it's already contracted and so it has to be delivered," Mr Mookhey said.

"It does seem as though the federal government was prepared to pull money, knowing full well that we were going to have to still deliver the project."

Treasury analysis showed the state budget was likely to be about $1.4 billion worse off over the next three years due to the infrastructure cuts, Mr Mookhey said.

"We would like (the Commonwealth) to reverse these decisions and we would like them to ensure that NSW gets its fair share of infrastructure investment," he said.

"We've been in conversations with the federal government as part of their 90-day infrastructure review for more than 200 days ... it's not clear whether the Commonwealth has been listening."

Ms King's office has been contacted for comment.