The Palaszczuk government has given up on the Turnbull government funding its $5.4 billion Cross River Rail project and will go it alone ahead of the state election expected later this year.

A sluggish domestic economy and a $1.1 billion hit by Cyclone Debbie has slashed Queensland's estimated budget surplus to $146 million next financial year, but increased borrowing has allowed the Palaszczuk government to fund new infrastructure projects and provide cost-of-living assistance to households.