Vic harangues feds on school, health cuts

Kaitlyn Offer

Just two days after warmly welcoming a rich road and rail Commonwealth funding promise, Victoria's Labor government is railing against a "mean spirited" federal budget.

Premier Daniel Andrews said the state's hospitals will be short changed $2.1 billion, schools will be $700 million worse off and the training and TAFE sector will take a $60 million hit, under the federal coalition's financial plan.

The response comes after the premier on Monday championed a "good day" for Victoria as the state welcomed $7.8 billion from Canberra for road and rail works.

"I am pleased that Mr Turnbull has suddenly, the great explorer he is, found Victoria and we welcome those additional capital works dollars," Mr Andrews told parliament on Wednesday.

"'But the question to the prime minister is this: if you cut TAFE who will build that road and rail agenda?"

The state government said that by refusing to pay the final year of the original Gonski package, the federal government makes the education sector $700 million worse off.

But federal Treasurer Scott Morrison said Victoria is playing politics.

"The fact is, schools funding is around $18 billion this year, that's a record," Mr Morrison told 3AW. "It's rising to $30 billion over the next 10 years."

At $7.8 billion, Victoria is getting the lion's share of the federal infrastructure package, designed to crackdown on congestion and including up to $5 billion for a rail link between Melbourne Airport and the city.

There was also $1.75 billion for the North East Link road and $457 million for a rail link between Monash University's Caulfield and Clayton campuses.

A business case looking at route and cost for the airport rail is due in September and the state government will wait on the result before committing itself.

But the Turnbull government wants an equity arrangement, in which it would get a return on its investment.

"We do believe that where there is an opportunity to secure a return, rather than just provide a grant, that is an appropriate way to protect the interests of taxpayers," Finance Minister Mathias Cormann told ABC Radio.

Another $20 million has been put aside to get Avalon Airport ready for overseas flights and there's $50 million over four years for a Latrobe Valley hydrogen energy supply chain pilot project.

The budget confirms the state will receive $2.1 billion for its share of Snowy Hydro.

State Opposition Leader Matthew Guy said it was a reasonable budget and defended the equity proposal for airport rail.

"Looking for new ways to do business" was a "good thing," he added.