Labor warned on overheating western Sydney road spend

The Mulgoa Road stage two upgrade, previously cut from the government’s infrastructure to-do list, is back on for funding.

A spokeswoman for Infrastructure Minister Catherine King said the timeline for the new spending was not settled, and would only be clear once state government-led construction milestones were met.

Treasurer Jim Chalmers described the announcement as recognition western Sydney was “a key part of Australia”.

“It’s a very important part of our economy, and it will be a central focus of our budget as well,” he said.

Infrastructure expert Marion Terrill told The Australian Financial Review the timelines were unclear.

“Because the Commonwealth has now moved to share funding 50-50 with state governments, rather than the 80-20 that applied previously, it does put the onus on the states to only build at a pace where they can afford to match the Commonwealth spend,” she said.

“That has a natural effect of slowing down construction, and that is very appropriate because we do know that there’s capacity constraints, that now is a particularly expensive time to be building.

“Slowing the whole thing down makes a lot of sense and I think that’s the net effect of what the Commonwealth has done here.”

Skill shortages, and delays or shortages of key construction components have been seen on infrastructure projects around the country.

Federal spending on roads and rail was forecast to fall by $7.4 billion over the next four years in December’s budget update – the result of $8.8 billion being “re-profiled” beyond 2026-27, along with some cancellations.

The changes are part of a broad overhaul of spending on roads and rail after an independent review found at least $33 billion in cost blowouts had made the existing near-800 project pipeline unsustainable,

Deputy NSW Premier Prue Car said western Sydney residents would benefit from Monday’s announcement.

“For far too long we have had to put up with sitting in traffic jams to get anywhere,” she said.

“To get our kids to school, to get to work, to employment opportunities, to get home again, because previous governments did not invest in the infrastructure as the population exploded in our communities, particularly new communities in the southwest and the northwest of Sydney.”