Federal budget delays Great Western Highway Lithgow to Katoomba upgrade funding

More than $2 billion was committed to the east and west sections of the highway duplication in the federal Coalition's May 2021 budget, but there had been uncertainty, in the lead-up to this week, about whether the commitment would be honoured by new Treasurer Jim Chalmers.

The delay in the funding for the highway upgrade in the 2022-23 federal budget has been described as a "massive blow" by Bathurst MP and Deputy Premier Paul Toole.

Mr Toole was with Minister for Regional Roads Sam Farraway at Little Hartley, near Lithgow, on Monday to announce the release of new designs for the east and west sections of the highway and to reiterate that major work on the west section was due to start by early next year.

On Wednesday morning, though, he said "Labor has punted our start date off into the long grass".

"This is a transformative project that we've worked incredibly hard to make a reality because we know it will be life changing for the people that use the road every day," Mr Toole said.

"The Federal Government claim to be committed to this upgrade but actions speak louder than words. By putting funding on hold, they've effectively put this project into 'go slow mode', condemning those travelling through the mountains to years more of sitting in traffic."

In a doorstop interview on Monday, new Infrastructure Minister Catherine King foreshadowed changes to the Federal Government's funding of big infrastructure projects in the country.

She said the Albanese Government had tried to make sure "the pipeline of infrastructure investment" lined up with "the capacity to actually deliver it".

"What we saw from the previous government was, constantly, this sort of fanfare about an announcement, but the reality is the delivery is taking time," she said.

"And of course, at the moment with the significant capacity constraints we've got on construction, labour shortages - you know if you're trying to get a tradie for a renovation at the moment just how hard that is. Well, try and do that 20 times over for a large road or rail project.

"That's really what we've done in terms of the pipeline, but the infrastructure investment pipeline remains strong."

Asked about the Great Western Highway upgrade at the doorstop interview, Ms King said the Albanese Government wanted to "work with the NSW Government to make sure that corridor actually works for the people of the Blue Mountains and we'll work with them on that project".

Minister for Regional Roads Sam Farraway, though, has called on the Albanese Government to "fess up to the people of regional NSW" and admit the government is "cutting" funding for the project altogether.

He said the delay in the federal funding now basically put the Great Western Highway upgrade in never-never land.

"The delay is the oldest accounting trick in the book - it keeps the project alive on paper but allows Labor to spend the money elsewhere," he said.

He said the NSW Government had, last month, started early work for the Coxs River Road section and "just this week we shortlisted tenderers for the major works that were scheduled to begin early next year".

"With the flick of a pen, contracts have been torn up, 3900 jobs have effectively been put on hold and we're none the wiser if Labor ever plan to back us in building this highway," he said.

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Mr Farraway says the Federal Government is contradicting itself when it says the budget is about "higher commodity" prices.

"Yet he [the treasurer] is axing a project that would strengthen our supply chain and make the movement of commodities, supplies and products easier," he said.

"The delay is incredibly disappointing for NSW, for the families who use this road every day and the freight operators who have wanted this road made safer for so long only to see it gone."

Member for Calare Andrew Gee, who is also the Shadow Minister for Regional Development, described the situation as "diabolical" after the future of regional projects and programs was made unclear.

He said the government either refused to reveal the future of projects, or axed the programs outright, and that was "a dagger through the hearts of the communities of Western NSW".

"$2.03 billion dollars was committed for the Great Western Highway in the May 2021 budget, but there's no word on what has happened to this money," Mr Gee said.

"It's a diabolical situation because communities have been campaigning for a better crossing over the mountains for years."

Business NSW regional director for western NSW Vicki Seccombe said the highway funding cut was incredibly disappointing.

"The Great Western Highway upgrade is critical for increasing the economic capacity of Western NSW, enabling better freight connections, and improving road safety and travel times," she said.

"If the Federal Government funding for this project does not eventuate, our Western NSW community and local businesses will be incredibly disappointed."

The NSW Government has also been seeking separate funding from the Federal Government for the highway upgrade's central section, a tunnel from Little Hartley to Blackheath.