50/50 infrastructure: Labor to push states, territories to pay more for big road, rail projects

The overhaul, which will also only include a federal tick-off where its contribution is at least $250 million, has been announced on Tuesday by the Federal Infrastructure and Transport Minister as a way to boost accountability, avoid budget blowouts and stop the political practice of pork barrelling.

It comes as a review of federal infrastructure spending commitments finds $33 billion in cost overruns. The government is poised, likely this week, to cut a range of federal infrastructure projects in an effort to ease inflation, with talks underway with states and territories to determine spending priorities.

In a speech in Sydney, Ms King said the new shift should commit the Commonwealth to only projects of "nationally significant infrastructure".

"The 100 per cent Commonwealth funded, or 80-20 per cent funding split is no longer the default - we are returning to a preference of 50-50," Ms King said.

"I am sure we will hear a lot in coming weeks about infrastructure cuts. But the reality is that no funding will be cut from the $120 billion pipeline."

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The review, led by former Infrastructure secretary Mike Mrdak, has already found an estimated $33 billion dollars of known cost blowouts and Ms King said there was a "high chance" of more.

"This is a stunning amount of money," she said.

"Of projects not yet in construction, where not a single sod has been turned, they found $14.2 billion of known cost blow outs.

"They found that it would simply not be possible to deliver the current 10-year pipeline of projects within the $120 billion Commonwealth allocation."

Ms King has again slammed the Coalition for focusing, while in office, on electoral rather than national benefit. She said this practice expanded the Infrastructure Investment Program from roughly 150 projects in 2012-13 to nearly 800 in 2022.

"You have to question what the role of Commonwealth investment is - is it nation building or is it a re-election strategy?" she posed.

"Australia's infrastructure investment pipeline has become a house built on sand. And our government has been left with the difficult task of shoring it up."

The ACT's Transport Minister Chris Steel last week said he has been engaging with Ms King and was confident Canberra would not miss out following the review as the ACT had suffered from underinvestment under the previous federal Coalition government.

Mr Steel said he believed the ACT had a "very strong case" to argue for future Commonwealth investment in territory infrastructure and transport projects.

There will be an allowance for special cases where federal contributions can be above 50 per cent, while projects can be funded with less than $250 million in federal funding if they relate to the National Land Transport Network, freight routes housing or the extraction of critical minerals.