A major infrastructure project designed to transform Melbourne’s transport network is once again at the center of political scrutiny. The Airport Rail link, central to these plans, has become a flashpoint in a broader debate.
A recent shift in federal funding priorities has triggered concerns among state leaders, raising questions about future commitments and long-term connectivity for regional communities.
According to reporting by The Age, tensions are mounting over competing visions for Victoria’s rail future, with implications that could extend well beyond a single station upgrade.
With election timelines fast approaching, the stakes continue to rise for both governments and the communities relying on promised improvements.
Sunshine Hub at the Center of Infrastructure Clash
The Sunshine station project, formally referred to as the Sunshine hub, is considered by the Victorian government as the first stage of the Melbourne Airport Rail. It was to be co-funded by a $4 billion joint commitment—$2 billion each from the Commonwealth and Victoria.
In February, the federal Labor government pledged an additional $2 billion, bringing the total public commitment to the hub to $6 billion.
Premier Jacinta Allan has strongly criticized Dutton’s pledge to redirect this funding elsewhere, arguing it would leave the broader airport rail project without its key interchange.
What that means [is] it will leave train travellers stranded at the platform – Allan said.
It won’t deliver the connections that are needed to get trains through to the airport.
“It’ll leave regional passengers stranded because building Sunshine is all about making sure regional communities can connect into Airport Rail – she added.
And it sends a very loud message to the Melton community that you can forget about electrification under a Peter Dutton government because of his cuts to the Sunshine station project.
Dutton Proposes Airport Rail Focus, Scrapping Suburban Rail Loop Funding
On Monday night, Dutton announced that a future Coalition government would pull $4.2 billion from two major Victorian projects—$2.2 billion from Suburban Rail Loop (SRL) East and $2 billion from Sunshine station—and instead reallocate the money to the $13 billion Melbourne Airport Rail.
We upgrade Sunshine, but not to that extent [proposed by Labor] – Dutton said.
The money otherwise that becomes surplus will be spent in Victoria on road projects.
Dutton described the airport rail as a project with broader, more immediate benefit than the orbital SRL line.
It will bring Melbourne up to the same status as many of the great airports across the world, including here in Australia, that already have a rail link project – he said.
And we know they work effectively.
The Coalition has framed SRL East as a low-return project that is drawing money away from core transport priorities. Infrastructure spokesperson Bridget McKenzie called it a “cruel hoax,” and the opposition has pushed the Victorian government to cancel it.
Still, the state opposition has not committed to scrapping the project entirely, stating it depends on the extent of works in progress by 2026.
Airport Rail and Srle : Not a Binary Choice, Says Government
State Transport Infrastructure Minister Gabrielle Williams responded to the Coalition’s plan by stressing the interdependence between Sunshine hub and the airport line.
It is stage 1 of Airport Rail, and what he is proposing puts all of its benefits at risk – she said.
Williams also emphasized that the Melbourne Airport Rail and SRL East are not mutually exclusive projects. State Labor argues both are needed to future-proof Melbourne’s transport network amid strong population growth.
Brimbank Mayor Thuy Dang welcomed bipartisan recognition of the importance of the Airport Rail but cautioned against separating it from the Sunshine hub, which is expected to support new housing and employment in Melbourne’s west.
This bipartisan support is what the west needs to assure us that Melbourne Airport Rail will be delivered regardless of who wins the election – Dang said.
However … the redevelopment of Sunshine station and complete delivery of the Sunshine station precinct masterplan are critical to the success of the Melbourne Airport Rail. We simply cannot have one without the other.
Contract Timing and Project Status Add Complexity
State SRL Minister Harriet Shing declined to rule out the signing of additional SRL contracts ahead of the May 3 federal election, but noted that no further agreements were imminent. Premier Allan, when asked, would not comment on the potential cost of canceling existing SRL East contracts.
The federal and Victorian governments continue to expect $9 billion in additional federal funding for SRL East to meet its projected $35 billion cost. A third of that is slated to come from value capture, though the state has not detailed the mechanisms.
The Melbourne Airport Rail, first costed between $10 and $13 billion in 2021, has already been delayed by four years due to a dispute over whether the airport station should be built above or below ground. That dispute was resolved in early 2024.
Since initial costing, construction inflation is estimated at 22 percent, though the Victorian government insists the original estimates remain valid.
Federal and state Labor governments have jointly committed $12 billion to the Airport Rail—$7 billion from the Commonwealth and $5 billion from Victoria. A Brad Battin-led state government, if elected in 2026, would contribute another $1.5 billion to the project.
Broader Strategy for Victorian Infrastructure Questioned
Opposition Leader Dutton and federal Coalition officials say they would prioritize core infrastructure in Victoria by using reallocated SRL and Sunshine hub funds for projects such as the extension of the Frankston line, the duplication of Donnybrook Road, and planning work to extend the Upfield line.
Still, the government maintains that both the Sunshine hub and the Suburban Rail Loop are necessary to meet long-term urban and regional transport demands.
Federal Transport Minister Catherine King issued a warning to Victorian voters :
Don’t let Peter Dutton short-change Victoria again.
The debate over the Sunshine hub and SRL funding underscores a wider divide in infrastructure philosophy—between incremental upgrades focused on short-term gains and long-term investment in network transformation.
The outcome of the May 3 federal election will play a decisive role in shaping Melbourne’s transport landscape for the coming decades.
