Federal Budget 2025: Albanese government sandbags NSW seats with billion-dollar roads

Almost a billion dollars will be spent upgrading crucial roads in electoral battlegrounds as the Albanese government makes a desperate bid to stay in office. Here’s what the 2025 Federal Budget means for NSW.

NSW Treasurer Daniel Mookhey has criticised the federal government for failing to make headwind with GST reform in the budget, declaring it “the one area” left lacking as the country wakes up to lacklustre tax breaks and bill relief.

The 2025-26 budget papers revealed almost a billion dollars will be spent upgrading crucial roads in electoral battlegrounds as the Albanese government looks to sandbag NSW seats it needs to hold to stay in office.

While money is being tipped into roads in Western Sydney, the Northern Beaches, and The Central Coast, NSW’s total share of federal government cash will decrease over the next three years.

Treasurer Jim Chalmers’ fourth budget forecast NSW would get $55.2bn in total payments from Canberra next financial year, $1.9bn extra than forecast in last year’s budget.

The infrastructure spending committed to NSW in Tuesday’s budget included a number of projects already announced, in electoral battlegrounds.

Those commitments include $250 million to upgrade to Mona Vale Road on the Northern Beaches, in a pre-election gift to Teal indepedent Sophie Scamps.

An artist's impression of a section of the "deferred" $340 million upgrade to the 3.4km Mona Vale Road (West), between McCarrs Creek Rd at Terrey Hills to Powder Works Rd, Ingleside.

In the North West, Townson Road in Marsden Park, Garfield Road West, and Burdekin Road will get $580 million in upgrades to “support housing growth and flood resilience”.

The roads, around Marsden Park, support one of the fastest growing areas of Sydney.

Marsden Park in Sydney’s west is one of the fastest-growing suburbs. Picture: NCA NewsWire / Gaye Gerard

The budget will also include a $500 million to upgrade Fifteenth Ave connecting Liverpool to the Aerotropolis.

Tuesday’s budget also includes $115 million to reduce travel times on Terrigal Drive on the Central Coast.

Another $1bn of funding, already announced, will go to preserving a rail corridor to the Western Sydney airport, taking total infrastructure spending to $2.8bn.

Homebush Bay Drive is also getting $50 million.

Prime Minister Anthony Albanese and NSW Premier Chris Minns at the construction site of the new Bradfield station in the Western Sydney Aerotropolis. Picture: NewsWire / John Appleyard

The targeted funding comes as Labor desperately tries to hold onto a slew of crucial NSW electorates that could decide the election, including Werriwa in the South West, Robertson on The Central Coast, and Greenway and Chifley in the North West.

Small increases to Commonwealth payments and NSW’s share of the GST have revised up the total payments NSW is expected to receive to 2027-28 by $5.1bn compared to Dr Chalmers’ last budget.

However, NSW’s share of total government payments will drop over the next three years; from 28 per cent to 27.5 per cent of all payments.

NSW’s share of government payments will increase slightly in 2028-29, when the state is expected to get $60.5bn in federal funding.

Homebush Bay Drive is among the crucial roads slated for federally-funded upgrades.

NSW’s share of GST revenue raised by the Commonwealth is also forecast to drop over the next four years.

The decreasing share of GST revenue being directed to NSW coffers will be a flashpoint in tensions between Canberra and the state government, with Treasurer Daniel Mookhey demanding a bigger share of the pie.

In his first public appearance since Treasurer Jim Chalmers announced the budget, Mr Mookhey said the NSW government had expected the Albanese government to overhaul GST distributions across the state and territories, with NSW currently contributing the largest share of GST revenue.

(File image): Daniel Mookhey, Treasurer of NSW has responded to the federal budget. Picture: NewsWire / Damian Shaw

“We have a lot more work to do on GST reform. That is one area which I do think that we can do more about,” he said.

“Once more, NSW is propping up the federation and sending money to all the other states.

“It was quite clear that we need a lot of investment here in NSW. A fairer GST allocation system is better for NSW, but it’s just as good for the commonwealth and just as good for the rest of the federation as well.”

The GST carve-up was decided by the Commonwealth Grants Commission earlier this month, directing $3.9bn in GST payments to debt-laden Victoria.

Overall Mr Mookhey said the Albanese government had delivered “a really solid budget for NSW” with investments in Medicare, healthcare and tax cuts, which he welcomed “as we strive to rebuild people’s purchasing power.”

He deflected accusations from the Coalition that the $2.8bn package for critical infrastructure upgrades, including $580m to improve roads in northwestern Sydney, was not motivated by attempts to “sandbag” marginal Labor seats.

“I accept the fact that federally, the Coalition is an election-mode style of politics, but if they are going to criticize these investments, the onus is on them to explain why it didn’t happen under their watch,” he said.

“In fact, what you’re seeing from the Albanese government and our government is the catch up spending that is required for the population that’s already there.”

Originally published as Federal Budget 2025: Albanese government sandbags NSW seats with billion-dollar roads