Communities want money saved on the Newcastle Inner City Bypass reinvested into the Hunter

The federal government's $360 million investment in the final stage of the bypass means the $450 million project is effectively paid for.

The state government valued the project at $280 million in the 2014-15 budget and has to date invested about $90 million on planning works.

That federal budget windfall means the state will save about $190 million on what it budgeted for in the 2014-15 budget.

Ideas for how the money could be reinvested in the region have come thick and fast in recent days.

Investing the money in the second stage of the John Hunter Hospital redevelopment, valued at $800 million, is at the top of the list.

While the state government has allocated $780 million for the first stage of the redevelopment, due to commence in 2022, no funds have been committed to the second stage.

Upgrading Newcastle Airport's runway to an international standard is also regarded as one of the highest priorities for the Hunter.

It is estimated that the $65 million project will create 4500 jobs and generate $12.7 billion in economic benefits through international airfreight, industrial expansion and increased tourism traffic over the next two decades.

But despite having unanimous support from across the region, the project missed out in last week's budget.

In addition to providing a massive economic boost to the region, the project is complementary to the adjacent special activation precinct.

The much anticipated Broadmeadow sports and entertainment precinct is also high on the list regional priorities.

When the government announced the plan in mid-2017 it said it was considering relocating Newcastle Harness Racing Club and also floated the idea of a new hotel, entertainment centre and "consolidated sports facility" with an aquatic centre on the 63-hectare site.

The government is yet to release its strategic business case for the project or commit funding.

Hunter Business Chamber chief executive Bob Hawes suggested the $190 million windfall could be allocated via a system similar to the former Hunter Infrastructure and Investment Fund.

"The Hunter Business Chamber understands that the NSW government has many and often conflicting priorities across the state and in most cases, the allocation of funding is dependant upon business case assessment and calculation and comparison of a benefit cost ratio," Mr Hawes said.

"The Hunter Region has demonstrated a capacity and capability to assess, prioritise and recommend for funding projects that are regionally significant using this process under the auspice of the former Hunter Infrastructure and Investment Fund (HIIF) which was active between 2012 and 2016.

"There would be a case for funds identified and allocated to the inner city bypass now being provided by the federal government to be re-allocated to other projects in the Hunter region using a mechanism like the former HIIF.

"The chamber has consistently advocated that there is tremendous 'bang for the buck' when governments invest in regions like the Hunter given the often significantly lower capital costs compared with major infrastructure projects typical of capital cities. The opportunity to keep these funds in the Hunter region makes enormous sense on this basis."

Newcastle MP Tim Crakanthorp said there was no justification for redirecting the money away from the Hunter.

"This money has already been dedicated to the Hunter and this is where it needs to stay," he said.

"If the government wants to keep this money allocated to major infrastructure projects, then the Newcastle Airport runway is a no-brainer, as is fast-tracking the John Hunter Hospital redevelopment.

"However, the most important project for our region, which requires no funding allocation from the government, is the diversification of the Port of Newcastle. The government must remove their anti-competitive and illegal cap on containers at the port and allow $1.8 billion of private investment to flow and create almost 15,000 jobs nationally."

Mr Crakanthorp cited the upcoming FIFA Women's World Cup as an ideal opportunity to kick-start in the promised Sports and Entertainment precinct.

"It's a significant amount which presents a real opportunity to develop Newcastle's sporting and cultural facilities to the world-class standard that NSW's second largest city deserves," he said.

He also put forward the Newcastle Art Gallery redevelopment and Victoria Theatre restoration as opportunities to invest in the city's cultural and artistic capital.

The government's Cultural Infrastructure Plan 2025, released in February 2019, noted supporting "Newcastle's growth as a major metropolitan area, including redevelopment of the Newcastle Regional Art Gallery precinct" was a regional "opportunity".

Labor pledged $14 million to the art gallery's expansion during last year's state election campaign.

Century Venues, which acquired the historic Victoria Theatre in 2015 estimates $11.5 million would be needed to fully restore the 1876 building.

The company, which has spent about $750,000 on the building to date, will commit about $2 million to the restoration fund and it hopes governments, and the private and community sectors will help make its plans for the building a reality.

Wallsend MP Sonia Hornery nominated the Pennant Street bridge, a key component of the Glendale interchange, as among her top priorities.

The $32 million bridge linking Glendale and Cardiff is the first stage of the the Lake Macquarie Transport Interchange, which includes a $120 million train station and bus interchange and a realignment of major roads through both suburbs.

Ms Hornery also highlighted several smaller but equally important projects such as the John Hunter Hospital shuttle bus service and the improved public transport in the city's western suburbs as in need of extra funding.

"We don't want to lose that money, we want to keep it here," she said.

The MP, whose electorate takes in much of the Inner City Bypass route, said she was keen for the project to progress as quickly as possible given the project was fully funded.

"I just want us to get on with it and work out how we do the rest of it (such as the McCaffery Drive ramps) later," she said.

Port Stephens MP Kate Washington called for a $40 million investment in a new high school at Medowie and extra funding for public housing in the electorate.

"The talk coming from the federal government is only to improve current stock. What we desperately need is more stock," she said.

"I'm talking to all of the different providers on the ground and what we are heading into is looking really bleak. They say that even if we had more resources to help people with homelessness we have got nowhere for them to go."

A spokesperson for NSW Treasurer Dominic Perrottet confirmed the Inner City Bypass was now fully funded, however, the cost of the project would need to be reassessed.

"While there could be savings for the NSW Government, the project was last costed in 2014-15 and will as such will need to be re-costed to align with current dollar values."

"Only after this is completed, as part of the Infrastructure Australia process, will the NSW Government be able quantify any savings."

He said the government was yet to reallocate savings from the project.

"The government has a strong record of investing in the [Hunter] region and will continue to inject millions of dollars into important projects such as the current John Hunter Hospital and Maitland Hospital upgrades."

"The bypass will take several years to complete and any savings that may result from this project will be allocated in future budgets to benefit the people of NSW including the local region."

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