NSW Treasurer Daniel Mookhey’s threat to cut Western Sydney airport funding

NSW Treasurer Daniel Mookhey has threatened to reduce funding for the Western Sydney Airport precinct following the federal government’s $8.8bn cuts to infrastructure.

NSW Treasurer Daniel Mookhey.

NSW Treasurer Daniel Mookhey has threatened to reduce funding for the Western Sydney Airport precinct following the federal government’s $8.8bn cuts to infrastructure.

Escalating the row between the Albanese government and the Labor states, Mr Mookhey said the NSW government may need to cut its funding for the planned capital works projects surrounding Sydney’s second airport because it was being short-changed by the commonwealth.

Mr Mookhey on Thursday warned the state’s budget had been “walloped” by Labor’s cuts as he accused the federal Treasurer of “bragging” about a ­surplus that was largely due to infrastructure savings.

Under the revamp of its infrastructure pipeline, federal Labor cut funding to a major interchange connecting the M7 ­motorway to the M12 that will link to the new Western Sydney Airport.

“The federal government’s decision to pull funding has risked our ability to make equal investments (on the Western Sydney Airport precinct) over the same period of time,” Mr Mookhey said.

“We were prepared to pay a lot of money to realise the vision of Western Sydney Airport. We still want to realise that vision but I have to be upfront.

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

Labor revealed in its mid-year budget update that it would cut or delay federal spending on infrastructure by $8.8bn over four years. The economic outlook – which also showed states would receive nearly $3.7bn less in payments for road and rail programs over the forward estimates – sparked fury among the states.

Victorian Treasurer Tim Pallas said the federal government’s infrastructure cuts were akin to the “bad behaviour” of the Morrison government.

He said federal Labor was not treating the Labor states with enough respect. “What we’ve seen in MYEFO is effectively the commonwealth government reverting to the bad behaviour that we’d seen from the previous government, and we’d expected better, and certainly we’d been assured by the commonwealth, that they were going to treat the states with more respect,” Mr Pallas said on Thursday.

But Dr Chalmers rejected suggestions NSW and Victoria had been dudded under the infrastructure shake-up, declaring that the “states and territories are doing really well out of us”.

He said the states had benefited from last week’s national cabinet deal, which included $10.5bn in GST top-ups and tens of billions of dollars extra for healthcare in exchange for higher contributions to the NDIS.

Dr Chalmers said the commonwealth’s infrastructure pipe­line remained unchanged at $120bn over a decade.

In a thinly veiled criticism of Victoria, Dr Chalmers said he did not publicly criticise the state government’s decision to cancel the Commonwealth Games.

“I recognise the pressure that state and territory budgets are under I ask them to recognise the pressure our budget is under as well,” Dr Chalmers said.

“I don’t take shots at the states and territories when they’ve had to do difficult things like cancel the Commonwealth Games,” he said.