Federal Infrastructure Minister Catherine King downplays tensions with NSW amid funding cuts

Following a public spat over cuts to crucial infrastructure projects in NSW, a federal minister has downplayed tensions with her state counterparts.

Federal Infrastructure Minister Catherine King has downplayed any tensions with her state counterparts, after states erupted over $33bn in infrastructure cuts following an infrastructure review last year.

At the time, NSW Premier Chris Minns was one of the most outspoken critics of the federal government, after 17 of the state’s road, carpark and rail projects were scrapped of federal funding, totalling $3.6bn.

The federal government have yet to acknowledge the cuts, and have maintained the $120bn infrastructure pipeline is at “record” levels.

In a question and answer forum on Thursday’s Airport City Summit, which marked 10 years since Badgerys Creek was named as the site for the airport, Ms King said she had a close working relationship with her counterparts, NSW Transport Minister Jo Haylen, NSW Roads Minister John Graham, and NSW Regional Transport and Roads Minister Jenny Aitchison.

The question was posed by event organiser Western Sydney Leadership Dialogue’s (WSLD)’s chief executive Adam Leto.

“We work incredibly closely together,” she told the audience.

“I think there’s are always inherent tensions between the Commonwealth and states, particularly when it comes to budget times… that’s part of the way we do business,” she said.

“I prefer them sometimes not to spill out into the public domain but that creates good sports sometimes.”

Federal Infrastructure, Transport and Local Government & Regional Development Minister Catherine King acknowledged there were ‘inherent tensions’ between to two levels of government. Picture: NCA NewsWire/ Nikki Short

Ms King said both governments had inherited a lengthy infrastructure backlog.

“We’ve both inherited what is a difficult challenge of a pipeline that is too full of projects that we just simply cannot deliver (and that’s why) the review here in NSW has been important,” she said.

In November, following the release of the federal infrastructure review, Mr Minns described the cuts as one of the “biggest threats” to NSW’s economy.

Some of the projects included the M7-M12 Interchange, and the Remembrance Driveway corridor upgrade in Camden Council.

“As we deal with enabling infrastructure the state needs to grow housing, accept migration and see the economy grow … one of the biggest threats to that is the decision by the Commonwealth government to have an infrastructure review on critical infrastructure in NSW,” he told parliament in November.

“We’re going to say to the Commonwealth government, we need you to stop that infrastructure review and ensure that NSW taxpayers get their fair share of infrastructure in the state.”

Handing down the mid-year economic and fiscal outlook in December, NSW Treasurer Daniel Mookhey also said the federal government’s decision to cut joint infrastructure funding had put the state’s ability to “realise the vision of the Western Sydney Airport” at risk.

The site will be Sydney’s first 24/7 airport, and is slated to open in late 2026, with construction currently 73 per cent complete.

“We still want to realise that vision but I have to be upfront with the people of NSW,” he said

“The federal government’s decisions to pull money from NSW means they need to take a greater share of meeting the costs of building the Western Sydney Airport, because that is their airport on their land.”

Western Sydney International Airport is slated to open by the end of late 2026. Picture: NCA NewsWire/ Simon Bullard

However, speaking to at the forum on Thursday, Ms King said the Western Sydney International Airport presented a slew of “economic activity, job growth, and employment opportunities,” which would prove transformational” to the area.

“I can report that as at 29 February 2024, WSI is 73 per cent complete and on track to commence on schedule in 2026—initially capable of catering for up to 10 million annual passengers,” she said.

Earlier in the day, Ms King turned the first sod at the Western Sydney International Airport’s Business Precinct, with the first stage of the development expected to create 400 jobs through construction, and another 2000 permanent jobs once the area is operational.

The project is a 50/50 partnership between the federal government, and Australian property group Charter Hall.

Funding arrangements between the federal and NSW state government caused many war of words between the two levels of government.

Tensions most recently came to the fore after it was revealed NSW would be $310m worse off in the 2024-25 GST carveup, while Victoria would get an extra $3.7bn in revenue.

The public spat resulted in Mr Mookhey stating he would petition Federal Treasurer Jim Chalmers to reform the system, advocating for per capita distribution.

Originally published as Federal Infrastructure Minister Catherine King downplays tensions with NSW amid funding cuts