Anthony Albanese says his government’s pledge to Suburban Rail Loop funds won’t be diverted to health system

Prime Minister Anthony Albanese says $2bn already committed by the federal government to stage one of the SRL can’t be spent elsewhere.

Billions of dollars allocated to Melbourne’s Suburban Rail Loop will not be automatically diverted to Victoria’s health system if the Coalition wins the state election, Prime Minister Anthony Albanese says.

He told the Herald Sun there was no “either or” on the two priorities, confirming $2bn already committed by the federal government to stage one of the SRL could not be spent elsewhere.

“The Commonwealth determines where our investment goes,” he said. “We … make commitments based on our priorities.”

Opposition Leader Matthew Guy this month pledged that if the Coalition won November’s election it would scrap the loop and divert all saved money into health.

The state opposition will on Tuesday write to Mr Albanese, reaffirming its pledge.

Opposition treasury spokesman David Davis said he was confident Mr Albanese “will respond to sensible points” and “the will of the Victorian people”.

“I saw the newspaper comments and (Mr Albanese) said he wouldn’t necessarily redirect the money. We think the case will be very strong,” Mr Davis said.

Anthony Albanese with Premier Daniel Andrews earlier this year confirming the federal government’s support for the project. Picture: Sam Ruttyn

“If the Victorian people at the election make a clear decision that they actually want the money reprioritised from a rail project (and) focus on rebuilding the health system, I think he will respond to that.

“It’s important to note that this project has never been to Infrastructure Australia - a body set up by Labor, indeed by Mr Albanese, if I’m not mistaken - to examine projects to take the politics out of them.

“We’ve seen what the parliamentary Budget Office has had to say and we will be certainly informing Mr Albanese about that matter.”

The Andrews government has committed to building stage one, from Cheltenham to Box Hill, by 2035. That section is expected to cost $35bn, and the state expects the bill to be split equally between the state, Commonwealth and private sector, with each putting in just under $12bn.

Opposition Leader Matthew Guy wants to divert funds for the SRL to the health system. Picture: Andrew Henshaw

Mr Albanese said there was no need to choose between health and the rail project.

“We have provided significant health funding for Victoria and we’ll do that into the future,” he said.

“It’s not either or. The rail infrastructure is a very specific commitment we have made as a federal government.”

Two analyses by the independent Parliamentary Budget Office, released this month, have also estimated the first two stages of the project – linking Cheltenham to Melbourne Airport – will total $125bn and the project’s cost will significantly outweigh its benefits.

The whole loop was originally forecast to cost $50bn.

The government disputes the PBO figures, but has declined to provide its own total cost estimate publicly.

Suburban rail loop map,

And with Mr Andrews insisting he would plough on with the loop, Mr Albanese also stood by the project.

“I think that a project that stops the rail system having to be a hub and spoke structure is a very positive development,” Mr Albanese said.

“If you look at the world’s great cities and their transport networks, they don’t have a hub and spoke, you don’t have to go into the centre of London to go across London, or New York or Tokyo.” Mr Albanese said Australia has had to “adjust and invest” in better public transport and the Melbourne Metro was a “first element of that”.

“That will be a major benefit in expanding the capacity of the network and the suburban rail will make it so much easier for people to get around Melbourne,” he said.

“It will boost productivity and create jobs while it’s being built.”

Mr Albanese acknowledged a range of factors were driving up infrastructure costs at the moment, including some global pressures beyond the ­Australian government’s ­immediate control.