Queensland Premier Annastacia Palaszczuk has accused Malcolm Turnbull of not understanding the state's proposed $5.4 billion Cross River Rail project.
The prime minister on Wednesday said the federal government wouldn't agree to funding the construction of the tunnel until flow-on benefits to things like housing affordability were made clear.
"The important thing is to make sure we maximise the livability bang for the taxpayer buck," Mr Turnbull told ABC radio on Wednesday.
"What we are not going to do is throw around numbers like they are telephone numbers."
But Ms Palaszczuk said the prime minister failed to understand the economic potential of the 10.2km link project.
"What we have seen is a prime minister that really does not understand the key projects of this state and I will continue to fight hard for Queensland jobs and Queensland projects,' she told reporters in north Queensland.
Deputy Premier Jackie Trad said the project would allow the government to build more social housing.
"The Cross River Rail project will open up significant amounts of under-utilised state government land for urban regeneration purposes, now that could, or should, include social housing,' she said.
"Queensland is forging ahead in terms of ensuring cross river rail is not only a public transport solution for the whole of the southeast Queensland network but is an economic development opportunity for our whole state."
The state government is also under fire from the Liberal National Party opposition after it was revealed it had missed a deadline to set up the authority to deliver the tunnel.