Vic battle over East West Link continues

The federal government has set itself up for a battle with the Victorian state government, keeping its commitment to the controversial $3 billion East West Link on the budget books.

Transport Minister Warren Truss has stood by the project as a "contingent liability" in the federal budget , despite the Andrews government proposing to scrap the project and seek the funding for other infrastructure.

However Treasurer Joe Hockey has included $1.5 billion from the project as unspent funding returned to federal coffers, consistent with a deal struck with the Victorian government.

The federal budget sets aside in 2015/16 $73 million for the Western Highway from Ballarat to Stawell, $19.7 million for the Tullamarine Freeway widening, $20.7 million for the Princes Highway West, $110.9 million for the St Albans Road rail level crossing and $20 million for Princes Highway East.

The impact of the closure of car making in Victoria will be eased by a $155 million growth fund to encourage automotive supply chain firms to diversity and workers to find new jobs.

Pre-construction work in preparation for the building of the Melbourne-Brisbane inland railway will continue, funded to the tune of $300 million to 2017.

Victoria's GST entitlement is earmarked to rise from $11.9 billion in 2014/15 to $12.73 billion in 2015/16.