Gillard's double-or-nothing bet When handing down last week's state budget, Victorian Treasurer Michael O'Brien claimed the September 14 federal election would be a "referendum" on the east-west road link. The state government promised to spend almost $300 million on the project; federal Coalition leader Tony Abbott $1.5 billion. The big question was, what would the federal Labor government do? Now we know. The Gillard government has, politically speaking, seen and raised Abbott with a promise to spend $3 billion on the Metro rail tunnel. Consequently, it might now be more accurate to say the September 14 federal election will be a referendum on road versus commuter rail for Victorian voters. In an ideal world, both projects would be built - the east-west road link to dramatically improve traffic flows and complete the freeway network, and the Metro rail tunnel to dramatically improve capacity on Melbourne's network. But this isn't an ideal world. In the short to medium term, it will be difficult to fund both of these projects. Abbott has already made his intentions clear. If he wins there will be no funding for urban commuter rail. The Gillard government has also thrown down its hand. In the unlikely event it wins, there will be no Commonwealth funding for the toll road - at least not until it is independently assessed by Infrastructure Australia. It is difficult to assess which project makes more economic sense. Infrastructure Australia, the independent umpire, is confident that the Metro rail project stacks up, having assessed it as "ready to proceed." We can be less confident about the east-west tunnel, which has no business case. It is, however, politics, not economics, that is dictating infrastructure priorities. The Gillard government believes it will get more mileage out of improving the capacity of the rail network. For the thousands of Victorians who commute daily, this will be appealing, although it would not be particularly well "targeted" politically. The federal Coalition, on the other hand, clearly has its eyes on Labor seats to the east of the city, including Deakin, La Trobe, and Chisholm. The Napthine government isn't about to knock back either project. But, given it has set aside just $10 million for the Metro rail project, it clearly knows which way the electoral wind is blowing.