Albanese government releases Suburban Rail Loop funding that was promised at last election

The Albanese government has signed off on a $2.2bn rail loop commitment with strict conditions as the state opposition calls for the project to be paused.

The Albanese government has released the $2.2bn in funding it promised for the Suburban Rail Loop at the last federal election – but with strings attached.

Infrastructure Minister Catherine King said advisory body Infrastructure Australia and the federal infrastructure department had assessed the project so money could flow to Victoria.

But strict conditions have been placed on what the money can be spent on.

“Infrastructure Australia and my department have now assessed that and recommended that that money be released to the Victorian government on the basis of very specific things that it will be going towards,” she said.

“And so I have now signed that off and the Victorian government, I’m sure, will be receiving the news of that now.

“That’s the existing money that we’ve had on the table for Suburban Rail East.”

But Ms King’s office could not provide details about what the money would be going towards.

The Albanese government has released $2.2bn in funding it promised for the rail loop.

Advisory body Infrastructure Australia and the federal infrastructure department assessed the project.

Infrastructure Australia is still working with the state government on its project evaluation report, which is expected to be finalised soon.

A spokesperson said: “Infrastructure Australia has provided its advice to the Australian government on the Victorian Government’s Suburban Rail Loop East project”.

Ms King said further funding for the contentious $34.5bn project, which would connect Cheltenham to Box Hill via a 26km tunnel, was still being considered.

The Allan government wants a total of $11.5bn from the Commonwealth for the rail link, which it says will trigger development around stations that would deliver 70,000 new homes.

It has booked in $11.5bn in state cash for the project, while the remaining third is supposed to be raised through development levies or land uplift taxes called “value capture”.

“There are still some hurdles that the Victorian government will need to overcome in relation to advice that I will receive from Infrastructure Australia about particularly the costings around value capture before the Commonwealth can make another decision,” Ms King said.

Catherine King says there are some hurdles that the Victorian government will need to overcome. Picture: Roy VanDerVegt

The Allan government wants a total of $11.5bn from the Commonwealth for the rail link. Picture: Wayne Taylor

Labor has been split by the SRL project, which is soaking up a huge proportion of infrastructure funding for a rail line in Melbourne’s southeastern suburbs.

But Ms King said she thought the SRL was a “really good project”.

“I’m a supporter of it, but I also need to make sure that I’m getting value for money for Australian taxpayers,” she said.

Suburban Rail Loop Minister Harriet Shing said “Australia’s largest housing project, our Suburban Rail Loop, has just received $2.2bn in good news from the Albanese government”.

“This means more homes and more opportunities, closer to where people want to live.”

State opposition major projects spokesman, Evan Mulholland, said: “Jacinta Allan tried to hold Canberra hostage for more than the $2.2bn already promised and has now been shamed with the news they won’t be committing the full third of her SRL East project”.

“It’s quite clear this project must now be paused, our credit rating agencies have warned of a ratings downgrade without additional federal funding,” he said.

“Every dollar spent on SRL East is a dollar not being spent in the growth areas and regions of Victoria that are being starved of infrastructure.”

“If Jacinta Allan says she’s listening after the Werribee by-election, she’s certainly not showing any signs of it.”

Federal opposition infrastructure spokeswoman Bridget McKenzie accused Labor of “panic spending” on infrastructure in Victoria following the Werribee by-election.

“There has been a complete lack of transparency on the $2.2bn federal Labor is handing over to Jacinta Allan for the Suburban Rail Loop,” Senator McKenzie said.

“The Victorian government has not disclosed how the full project will be funded or how at least $11bn worth of taxes, charges and fees will be collected from property owners in the SRL corridor.

“Minister King needs to make clear what the quid pro quo is for the deal before she releases Commonwealth taxpayers’ money.”

Some federal Labor MPs who support the project also want it paused, with the focus to be put on roads.

They are concerned Ms Allan’s recent doubling down on the project reinforces that the state government has the wrong priorities, which could negatively impact the Labor brand at the upcoming federal election.