Taxpayers will fork out an extra $370 million for the next stage of the Monash Freeway upgrade, with the cost of the project blowing out to $1.1 billion.

A labour shortage and a spike in the cost of raw materials thanks to competing infrastructure projects across the country have been blamed for the road-widening scheme's price tag rising from $711 million to $1.1 billion.

Daniel Andrews and Scott Morrison are going to pay more for the Monash upgrade. Credit:AAP

There have been no changes to the design or alignment of the upgrade, with construction work set to start this year and finish in 2022.

But the federal and state governments jointly funding the 36 kilometres of new lanes on the freeway insist the extra expense is not a cost but a "massive investment".