Spending steadies as reform calls grow
The 2025–26 Federal Budget outlines a $17.1 billion infrastructure commitment over ten years, but without any major new national programs or sector-wide reform.
The bulk of the funding flows through the Infrastructure Investment Program (IIP), targeting a mix of new and existing road and rail projects.
According to documents released this week, total resourcing for the infrastructure portfolio increases modestly to $16.6 billion in 2025–26.
Queensland is the major beneficiary, with $7.2 billion allocated to Bruce Highway upgrades – the largest single investment in a national transport corridor to date. Additional allocations include $200 million for the Rockhampton Ring Road and $70 million to seal the final unsealed stretch of the Kennedy Developmental Road.
New South Wales receives over $2.3 billion, with $1 billion for preserving the corridor for the South West Sydney Rail Extension, $500 million for Fifteenth Avenue upgrades, and a combined $465 million to address choke points including Mona Vale Road and Terrigal Drive.
Victoria is allocated $2 billion for Sunshine Station, which is intended to become the hub of the Melbourne Airport Rail Link. The State will also see $1.1 billion for Western Freeway upgrades and a $1 billion Road Blitz package to improve traffic flow in outer suburbs.
Western Australia receives $350 million for upgrades to the Kwinana Freeway as part of the Westport precinct development.
South Australia will receive $125 million for the Curtis Road level crossing removal.
Tasmania is allocated $200 million to upgrade the Arthur Highway.
The Northern Territory will receive $200 million for duplicating parts of the Stuart Highway from Darwin to Katherine.
The Australian Capital Territory will get $50 million to support Monaro Highway upgrades.
In addition, a boost to the Roads to Recovery Program will increase its funding to $1 billion per year, while funding for the Black Spot Program will rise to $150 million annually, and $200 million per year will be made available under the new Safer Local Roads and Infrastructure program.
The High Speed Rail Authority is expected to enter a quieter phase post-business case, with 2025–26 funding dropping to $8.2 million. It will focus on corridor preservation and exploring private financing models for future phases.
Infrastructure Australia has received $13.4 million and continues its advisory role, assessing major project proposals exceeding $250 million and maintaining the Infrastructure Priority List.
The Northern Australia Infrastructure Facility (NAIF) has been budgeted $24.5 million to support $700 million in new investment decisions. Its portfolio is expected to deliver $2.5 billion in cumulative capital deployment and over $4 billion in public benefit.
Roads Australia has welcomed the targeted investments, especially in corridor preservation and rail connectivity, with its CEO Ehssan Veiszadeh describing the budget as “critical for enabling housing access and reducing congestion”. However, he also said reform is needed in procurement and design standards.
The Australian Constructors Association has warned of continued inefficiencies, with CEO Jon Davies pointing to a construction productivity decline from 0.3 per cent to –0.8 per cent over the past year.
“Without a shift in how we deliver infrastructure, cost pressures will only worsen,” he said.
Infrastructure Partnerships Australia noted that while the $17.1 billion figure matches last year’s top-line, it claims infrastructure funding is actually down $493 million in real terms over the forward estimates.
Rail groups are more upbeat.
Australasian Railway Association CEO Caroline Wilkie has welcomed the $3 billion committed to new and upgraded rail, including Sunshine Station and South West Sydney corridors, citing their impact on housing access and economic growth.
While the 2025–26 Budget holds firm on infrastructure delivery, industry consensus suggests Australia’s long-term transport productivity depends not just on funding, but on reform.
More details of the new and renewed spending are accessible at Budget.gov.au
