City Services Minister Chris Steel defends light rail funding, Master Builders ACT hits out at lost jobs

Mr Steel said the previous government had approved the "ill-defined" project "which did not have any particular deliverables" prior to seeing a proper business case.

"It had literally no substance, it was all pork," he said.

Mr Steel said the ACT government had unsuccessfully attempted to have the Coalition direct money towards Parkes Way, which had been identified as Canberra's real bottleneck.

"We've been very strongly advocating to the federal government that they retain Commonwealth investment in projects like Athllon Drive, which they did," he said.

"Then they've also provided extra funding for light rail."

Shifting the nearly $86 million of federal funding from road upgrades to the next stage of the light rail will cost Canberra more than 773 construction jobs, Master Builders ACT said.

Chief executive Michael Hopkins said the decision to strip funding from the road upgrades would also rob the territory of more than $250 million worth of economic activity.

Mr Hopkins is renewing calls for the ACT and federal governments to develop a long-term infrastructure plan for the nation's capital to provide certainty for the sector.

"The federal and ACT governments should commit to a long-term infrastructure plan to support the Canberra region's forecast growth, with increasing funding, rather than changing infrastructure projects on a whim," he said.

"Changing infrastructure priorities at the last minute will dent industry confidence, leaving contractors with a feeling of 'which project is going to be cut next?'"

A transport funding row has erupted after revelations that $85.9 million worth of roads funding was cut in the new Labor government's first budget.

That exact amount was allocated to the next stage of light rail from Alinga Street to Commonwealth Park.

Mr Hopkins said the light rail is likely to be constructed by a large contractor based out of Canberra, as was the case with stage one of the project.

Masters Builders estimated figures are based on National Housing Finance and Investment Corporation estimates.

The criticism comes as federal Labor MP Andrew Leigh produced analysis suggesting Canberra would fare better under the Albanese government than it did under the Coalition.

Senate estimates on Friday heard that $50 million in federal funding for the Canberra south-west corridor upgrade and $30 million to upgrade the Kings Highway had been scrapped.

The $5 million allocated to upgrading Boboyan Road was also cut, although the ACT government remains committed to completing the project under a new funding deal with the Commonwealth.

The Barr government and federal Finance Minister Katy Gallagher have defended the decision to re-prioritise transport funding, which followed talks between the ACT and Commonwealth ahead of the budget.

Canberra's Public Transport Association welcomed the decision to prioritise light rail as a "very positive" one.

"I don't think there's any shortage of roads in the ACT, but there's certainly a shortage of public transport," committee member Damien Haas said.

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"And we think that prioritising the completion of light rail stage 2a is a high priority, certainly [more] than roads that people aren't really sure of what their intended purposes are."

Mr Haas said that more focus should be placed on the funds available to ACT infrastructure projects, rather than pitting projects against each other.

"There should be more funding, so that all projects that are high priority should be funded."

Amid the backlash to the roads funding cut, Dr Leigh has prepared new budget analysis to support his argument that Canberra would get its fair share under Labor.

Dr Leigh's analysis examined infrastructure funding for the ACT in each budget since 2007-08, including allocations for black-spot upgrades, bridges, roads and rail.

The analysis showed the Albanese government's first budget set aside an average of $120 million per year for the ACT through to 2025-26.

That compares to an average of $38 million which was spent each year during the Coalition's near decade in power.

Labor had spent an average of $39 million a year during the Rudd-Gillard-Rudd governments.

Asked if Canberrans could be assured of a fair deal under the Albanese government, Dr Leigh said: "Absolutely".

"The best guarantee for that is having a Finance Minister [Katy Gallagher] from the ACT," he said

Dr Leigh said Labor would fund projects based on an economic cost-benefit analysis, rather than a political cost-benefit analysis, which he accused the Coalition of doing.

The Canberra Times challenged Dr Leigh on that statement, given federal Labor has allocated funding for light rail while questions continue to surround the business case.

In response, Dr Leigh said the community supported light rail.

"The economic work has been done by the ACT government," he said.

"It's also backed by the strong support from the community. This is now the most popular public transit route in the ACT."

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