Federal transport department boss Mike Mrdak has criticised Queanbeyan Council for developing industrial land closer to town than a residential development it will put under flight paths.
Under questioning from Senator Bill Heffernan about the controversial Tralee housing development, Mr Mrdak said the council's actions didn't seem to be logical.
Queanbeyan Council has long been a proponent of the 2000-house venture which the NSW government ticked off in November.
But the federal Labor government says the $400 million development under the Canberra Airport flight path will stymie its expansion for use as a second airport for Sydney.
The ACT government has also expressed concerns that complaints from Tralee residents will lead to noise-sharing over the national capital's southern suburbs.
Senator Heffernan asked why Tralee developer Bob Winnel hadn't been offered a land swap. ''We've got plenty of bloody land,'' he said during the hearing on Tuesday.
Mr Mrdak replied the federal department had raised the issue with NSW that Queanbeyan Council was currently opening up industrial land within a kilometre of its town centre. ''And yet (the council) is putting new suburbs 10km from town on a flight path,'' he said.
''You would have thought the logical solution would be to have the residential areas close to the main street of Queanbeyan and the industrial estates out at Tralee.''