The Victorian government is refusing to hand back $1.5 billion in federal funds earmarked for the East West Link, with Premier Daniel Andrews saying he is not interested in playing “silly games” with Prime Minister Tony Abbott over roads funding.
The Abbott government is demanding Victoria hand back $1.5 billion of funds already paid to the state for the abandoned road project, and listed the cash as one of its biggest saving measures in Tuesday’s federal budget.
The measure sparked yet another round of claim and counter-claim between Victoria and Canberra. State Opposition Leader Matthew Guy offered to step in to help diffuse the stand-off.
Premier Andrews was adamant on Wednesday that Victoria would not hand back the money.
And with a 14-month deadline to repay the funds, Mr Andrews was confident that other events and projects would supersede Treasurer Joe Hockey’s claims for the cash.
Mr Andrews seized on comments from Mr Hockey and his Finance Minister Mathias Cormann that other projects may get federal funds, saying mixed messages were coming from Canberra.
“We are not giving back any money, be very clear about this. I don’t know that the federal government are asking us for that,” Mr Andrews said.
“They are confused, very confused. It is very difficult to work out what the federal government is planning on doing.”
The Andrews government has been encouraging Mr Abbott to contribute to a $5.5 billion western distributor road project proposed by Transurban that would link the city with the western suburbs via a new tunnel.
Mr Andrews has written to Mr Abbott urging him to honour an agreement to improve the West Gate Bridge, saying the western distributor would fix congestion and create jobs.
“At our meeting in March you expressed a willingness to partner with the Victorian government on a road project of national significance that would provide an alternative to the West Gate Bridge,” Mr Andrews wrote.
The Premier argues the western distributor proposal would boost the economy.
“I’m not interested in having a childish argument; I have made it clear to him [Abbott] that Victorians are sick and tired of that,” Mr Andrews said.
The state Liberals are also trying to save Commonwealth funding for Victoria, and Mr Guy said he planned to meet Mr Abbott this week to put the case for the money to remain in the state.
“I will take it upon myself to have a sensible, constructive dialogue with the Prime Minister about why monies should remain in Victoria for infrastructure projects,” Mr Guy said.
“That is a hell of a lot more than it appears Daniel Andrews can do. He doesn’t want to behave constructively, he wants to behave politically.”
In the two weeks since he unveiled the western distributor proposal Mr Andrews has been trying to meet Mr Abbott to discuss the project, including reaching out when the Prime Minister was in Melbourne last Thursday, but he has had no success.
The federal government’s decision to demand a refund will keep the East West Link a burning political issue and help with Liberal campaign ammunition at the next election.
The Liberal party has two of its three most vulnerable federal Victorian seats in Melbourne’s outer eastern suburbs, where residents would most benefit from the road.
Political strategists say that although the link may not necessarily be a major vote swinger, it will enable the Liberal party to campaign against Labor as reckless financial managers.
Treasurer Joe Hockey and Finance Minister MathiasCormann sent mixed messages during radio interviews on Wednesday.
Although both demanded the money be repaid, they also said the Commonwealth would consider making contributions should the Victorian government find suitable projects.
“The purpose of giving the Victorian government $1.5 billion was to build the East West Link. Now they’re not building. So, yes, technically they have to give it back to us. But we have said we’ll look at other projects, but we are absolutely committed to building the East West Link,” Mr Hockey said.
Federal Opposition Leader Bill Shorten is also writing to the Prime Minister demanding the money stay in Victoria.
“This is money for Victoria and that’s where it should stay. Tony Abbott is punishing Victorians for electing a Labor government. Unlike Tony Abbott, Premier Andrews keeps his promises,” Mr Shorten said.
