$600m at stake as government rift threatens Hunter windfall

THE Hunter Region’s chances of securing up to $600million in federal infrastructure funds could be at risk because of poisonous relations between the federal and NSW governments.

A federal promise in May last year that the Hunter would ‘‘get its fair share’’ after losing $1billion to Queensland and Western Australia is looking shaky with the release of Regional Infrastructure Fund stream 2 guidelines yesterday.

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A federal requirement that funded projects must have ‘‘partner funding or in-kind partner contributions from a state government’’ is expected to damage NSW prospects of up to $4.5billion in infrastructure funds from the mining tax.

The Hunter’s anticipated $600million cut of infrastructure fund stream 2 funds is based on producing 36per cent of Australia’s taxable coal.

Alarm bells are already ringing that Queensland Premier Campbell Newman’s commitment to matching federal funds dollar for dollar could trump NSW and threaten major Hunter projects, including the $250million Muswellbrook bypass, the Singleton bypass and the Scone rail overpass.

Guidelines released by federal Infrastructure Minister Anthony Albanese emphasised that ‘‘projects with a high degree of partner funding will be favourably considered’’.

The guidelines were released in the same week the state and federal government traded criticisms after the federal government chose Brisbane over Sydney for the 2014 G20 Summit.

Within hours of the guidelines’ release, the NSW Minerals Council was warning all sides that the Hunter had already missed out badly on federal infrastructure funds linked to mining.

In the first round of $1billion in infrastructure fund money, Queensland and Western Australia received nearly $1billion, while NSW received less than $2million for design works for the Scone overpass.

‘‘It seemed the federal government failed to recognise the magnitude of the state’s $20billion industry and its contribution to the economy,’’ NSW Minerals Council acting chief executive Sue-Ern Tan said.

She declined to comment on relations between the state and federal governments, saying it was ‘‘a matter for them’’, but noted that ‘‘politics should never get in the way of good policy’’.

NSW Upper Hunter MP George Souris named Muswellbrook bypass as his ‘‘number one priority’’, followed by the Scone overpass, with the Singleton bypass several years away from ‘‘approval to go to design stage’’.

Federal Cessnock MP Joel Fitzgibbon expressed concern about NSW Premier Barry O’Farrell’s plan to increase mining royalties, calling it ‘‘an obstacle to maximising our funding opportunities’’.

He called on the NSW Government to quarantine any revenue from royalty increases and use it to match infrastructure fund stream 2 money.

NSW Roads Minister Duncan Gay said the state was ‘‘ready to go’’ with a number of priority projects including the Muswellbrook bypass.

Muswellbrook mayor Martin Rush said the Hunter Infrastructure Fund appeared to be an appropriate funding source, but ‘‘the state government will need to isolate the funding for that purpose early, because large chunks of it have already been allocated’’.

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