Dutton to Cut $4.2 Billion in Melbourne Rail Funding, Redirects to Airport Link

Dutton’s campaigning is in Melbourne so far where the Liberal Party needs to secure several outer suburban seats.

A combination graphic created on March 5, 2025 of Australian Prime Minister Anthony Albanese (L) and Leader of the Opposition Peter Dutton (R). AAP Image/Mick Tsikas, Lukas Coch

Federal Opposition Leader Peter Dutton has pledged to scrap $2.2 billion in federal funding for Victoria’s Suburban Rail Loop (SRL) and redirect funds towards the Melbourne Airport Rail Link.

The opposition’s plan would affect the first stage of the project, SRL East, from Melbourne’s Cheltenham to Box Hill.

Dutton further announced cutting $2 billion from a $4 billion upgrade to Sunshine Station and its surrounding rail yards in Melbourne’s west, a joint federal-state commitment that was supposed to enhance airport rail access.

The changes would amount to $4.2 billion in withdrawn funding from two major projects.

However, Dutton has only committed an additional $1.5 billion to the Melbourne Airport Rail Link, on the condition that a future Coalition-led Victorian government matches the amount.

Touching down in Melbourne on April 1, Dutton said the SRL was “never going to happen” under the state labor government.

“It’s a $200 billion policy which is ‘pie in the sky,’ it’s not going to happen,” he told reporters.

“We have committed ... an extra billion and a half dollars—which takes our contribution to 50 percent of the $13 billion required for this project. And to the credit of Brad Batten, the state opposition here, has increased their contribution to six and a half billion dollars as well, and that will make this project a reality.”

Allan Says Sunshine Rail Station Critical for Airport Link

Premier Jacinta Allan hit back at the announcement, arguing that the reallocation would result in significant job losses and disrupt vital projects.

“Well, it’s April Fools’ Day today, but Peter Dutton’s cuts to Victoria are no joke,” Allan said in a press conference on April 1.

“He has announced today that he will cut funding to the vital projects that Victorians want, the projects that Victorians need, projects that support jobs.”

She further warned that withdrawing funds would impact thousands of workers, leading to job and wage losses, ultimately straining household budgets.

Prime Minister Anthony Albanese also criticised the move, arguing that it undermines Melbourne’s broader transport strategy.

“Dutton has shown that they’re just not ready for government,” Albanese told reporters.

He pointed out that part of the funding for Sunshine Station was key to improving transport links to the airport.

“Sunshine Station is about access to the airport,” he said. “It’s about making sure people in Ballarat, Bendigo, Geelong, and parts of Melbourne can get to the airport. It’s a part of the airport rail link, which will also be part of the Suburban Rail Loop.”

Allan insisted the Sunshine upgrade was critical, describing it as “stage one” of Melbourne Airport Rail and key to connecting regional Victoria with both the airport and the city’s CBD.

With infrastructure spending shaping up as a major election issue, the battle over transport funding in Victoria is set to be a critical point of contention between Labor and the Coalition in the weeks ahead.