Just as Jeff Kennett and Alan Stockdale did by bringing in Transurban to build CityLink, Napthine and O'Brien are turning to the private sector to build - and, mostly, to finance - the eastern leg of the east-west link, which O'Brien depicts as ''a major transformational project for Victoria''. The big future rail project, Melbourne Metro, has been pushed back in the queue. The budget allocates $224 million in 2013-14 to plan and develop the east-west link - but just $10 million for work to plan the Metro. That's less than it was given last year. The government's decision to proceed with the east-west link is based on a business case study which will not be made public. We have to assume that it concluded that the future benefits will outweigh the costs, but we don't know. The study assumed there would be no off-ramp to the city, and evaluated the project simply as a tunnel from Collingwood to Flemington. O'Brien foreshadowed last week that the government would make a cash contribution to reduce the amount that the private partners have to raise from financial markets. He demands that the Gillard government contribute $1.5 billion to the cost: no doubt by coincidence, the exact amount that Tony Abbott has already pledged to provide. We will know soon if Infrastructure Australia thinks it is worth funding at this point. I hope the Gillard government sticks to its principles and insists that it will only fund projects that have passed cost/benefit analysis - a solid principle which Abbott has impetuously abandoned.

The only published analysis of the east-west link was the Eddington report's 2008 conclusion that the costs would double the benefits. This is an inexact science, and the Napthine government is confident that its version of the project will be different. Apart from reducing the cost via a government contribution, it envisages that commercial redevelopment above the tunnel will pay for a fair slice of the cost. I think we should welcome that decision, so long as it is not achieved regardless of cost or process. If the road is built as announced, without off-ramps to the city, it will reduce traffic in the inner suburbs, not add to it. Melbourne is a spread-out, low-density city in which most traffic is driving from one suburb to another. We need freeways to improve inter-suburban access, just as we need a Metro to improve access to the city and inner suburbs. The budget gives us just one of them. And the reason is that the government is more committed to preserving its AAA rating than it is to meeting our infrastructure demands. This year's infrastructure investment will not be the record we have been promised. We are now promised record spending in nominal terms for the next two years, until the 2014 election - after which it will fall off sharply, sliding to just 0.8 per cent of the state's output by 2016-17.

The government and its advisers think this is enough. I suspect the voters will take a different view. The government's concerns are valid. If Victoria does provide the infrastructure the city's growth requires, the state's debt would rise, and the ratings agencies would strip away our AAA rating. That would mean we would pay higher interest rates on our debt - O'Brien says Treasury estimates this at more than $150 million a year. It's money we could use for other things. But time wasted at level crossings waiting for the boom gates to rise costs us too. Time wasted in traffic jams, or on trains so crowded you can only stand, is a less obvious cost than higher interest bills, but just as real. On one estimate, congestion already costs Melbourne $2 billion a year. On these budget settings, that will grow. Voters don't give a AAA rating to governments that put a low priority on infrastructure. The Brumby government lost office in part because it was slow to respond to the surge in the city's population. Ted Baillieu lost office in part because he failed to roll out the infrastructure to match the city's booming population growth.

The Napthine government is investing in other things, for now. In 2013-14, thanks to federal funding for the regional rail link, it plans to invest more on rail than road. There are big hospital redevelopments in Bendigo and Box Hill, a host of road and rail projects around Geelong, Ballarat and south-west Victoria, though conspicuously less in regions with fewer marginal seats. Loading On the budget's own figures, that won't last. And that is the risk to the government, and us. Tim Colebatch is The Age's economics editor.