Federal Government: Funding for any “nation-building” infrastructure to be matched by states

VITAL Sydney projects – including the M4 East, the M5 duplication and the North West Rail Link that Premier Barry O’Farrell has staked his political future on – could be jeopardised by new federal funding cuts.

In a bid to return the budget to surplus next year, the Gillard government has decreed funding for any “nation-building” infrastructure would have to be matched by cash-strapped states.

The new approach would require the state government to submit proper planning proposals and funding commitments before asking for Commonwealth money.

Proposals for future road and rail projects across the country could be scrapped unless the states attach their own partial funding to them.

Treasurer Wayne Swan will today announce a $20 billion-plus deterioration in the government’s finances and $4 billion in expected cuts to reach surplus, in the Mid Year Economic and Fiscal Outlook.

Federal Transport and Infrastructure Department secretary Mike Mrdak has revealed savings would include a new formula for future nation-building projects requiring states to provide 50/50 funding in most cases…