Federal Budget 2016/17: Melbourne Metro to get $857 million

EXCLUSIVE: THE Federal Government will pour $857 million into the Melbourne Metro rail project in an unexpected windfall for Victorian infrastructure funding.

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THE Federal Government will pour $857 million into the Melbourne Metro rail project in an unexpected windfall for Victorian infrastructure funding.

Treasurer Scott Morrison has told the Herald Sun the money will be allocated in Tuesday’s federal Budget.

A further $20 million will be given to finalise funding on the Murray Basin rail project, in a big boost for ­regional Victoria.

The State Government said last week it had the funds to go it alone on the entire $10.9 billion Melbourne Metro underground link between South Kensington and South Yarra, so the pledge should allow it to divert almost $1 billion to another project.

The Herald Sun can also reveal heavily armed security specialists will guard federal police headquarters from Islamic State-inspired terrorist attacks, as part of a $150 million security package in tomorrow’s Budget.

The infrastructure cash will be made available from a federal asset-recycling fund, in response to the Victorian Government passing laws to privatise the Port of Melbourne.

Treasurer Scott Morrison says the Federal Government will chip in $857 million towards Melbourne Metro. Picture: Kym Smith

Taking into account the unexpected move to let the state keep $1.5 billion set aside for East West Link, Canberra has now poured $2.38 billion in extra funding into Victorian infrastructure in the past month.

Mr Morrison said: “Obviously this is all part of our national economic plan for jobs and growth, both in terms of increasing the productivity of the Victorian economy but also improving the livability of the city, which is also critical to national productivity.’’

The Treasurer yesterday sent his first federal Budget off to the printers. He will hand it down just 60 days out from the expected July 2 double-dissolution election.

Winners will include small businesses, who may get further tax relief, and middle-income earners receiving about $80,000, who will get a modest tax cut to offset bracket creep.

Losers will be smokers, through a rise in tobacco excise; high-income superannuants, who will lose some of their generous tax concessions; and multinational companies that minimise their taxes by lending to themselves.

Melbourne Metro rail artist impression.

Mr Morrison said the money for Victorian infrastructure would come from the asset recycling fund set up in 2014 to encourage states to sell off public assets to reinvest in other projects. States with projects that qualify get a 15 per cent federal bonus payment.

Victoria receives $877 million over four years after its decision to offer a 50-year private lease for the Port of Melbourne — a move likely to bring in $6 billion in revenue.

Canberra had only allocated $10 million for planning of Melbourne Metro and was awaiting advice from Infrastructure Australia before a larger commitment. But Prime Minister Malcolm Turnbull has been indicating he thought it a worthwhile project. “Metro really does follow on the Prime Minister’s commitment to better cities and urban rail projects,’’ Mr Morrison said.

Canberra last month agreed to match dollar for dollar Victoria’s $220 million for the Murray rail project, connecting the agricultural areas in the north with southern ports.

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