Three projects lost their funding in this week's budget, and the savings of $85.9 million is precisely the amount allocated for stage 2A of the ACT light rail project, extending the line to Commonwealth Park.

The ACT was consulted on the changes, and a spokesman for the Barr government said it had volunteered the project funding for "reallocating" to the light rail extension.

Two of the cut projects are the Canberra south-west corridor upgrade worth $50.9 million and the Kings Highway corridor worth $30 million, Senate estimates heard. The Boboyan Road upgrade worth $5 million was also defunded, but was still subject to negotiations.

A spokesman for the ACT government said the Commonwealth checked to ensure the delivery of jointly funded infrastructure projects was "realistic, achievable and sustainable" in the current construction market.

"There was a particular focus on projects that were likely the result of pork-barrelling efforts from the previous government," the spokesman said.

"As a result of issues identified with certain projects, the ACT government was willing to work with the Commonwealth on the reallocation of infrastructure funding for the ACT."

But federal officials denied any projects were cut in a "one-for-one" swap to prioritise Labor's preferred projects at the expense of those announced by the previous government.

Infrastructure department deputy secretary David Hallinan revealed the list of projects cut in the ACT under questioning from Nationals senator Bridget McKenzie, but insisted the changes were about moderating the construction market. He rejected the senator's suggestion the government had made cuts to instead fund different projects.

"I wouldn't describe the budget working that way. We would have a list of reductions or deferrals and list of spends and we tend not to link one to the other across the portfolio or across government," he responded.

"We consolidate it all at the end, we don't tend to identify a one-for-one change in project priorities."

The Commonwealth wrote to states and territories in the lead up to the budget to identify projects that could deferred or were no longer a priority from which the final lists were derived, Mr Hallinan said.

Senator Gallagher said that "constructive" approach with state and territory governments was an improvement over how projects were announced by former Liberal ACT senator Zed Seselja, who "splashed around public money" on political priority projects.

"It was clear that the infrastructure projects that were announced by former senator Seselja had little evidence to show that they stacked up, nor had he bothered to check whether they were priorities of the government that would need to deliver them," she said.

"We consulted with the ACT government which made clear that the priority project for the ACT was stage 2A of the light rail project and that is why we have redirected funding in this budget."

She said Canberrans expected the "best bang for buck" for their taxpayer money, which is what they would get from the Albanese government.

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Canberra Liberals leader Elizabeth Lee said the revelations highlighted the ACT government negotiated to cut funding from important road upgrades and diverted the money to light rail.

"Once again, we see money being ripped out of other important areas in the ACT to pay for the tram and we still don't know how much the project will cost Canberra taxpayers and when it will arrive at Commonwealth Park, yet alone Woden," she said.

"We have now seen millions and millions of taxpayer dollars pulled out of our health system, public housing and important road upgrades to pay for the tram."

She said the ACT Transport Minister Chris Steel needed to be upfront with Canberrans about the costs of the stage 2A light rail extension and when the line will reach Woden.

Infrastructure officials said they were not aware of any funding requests for stage 2B or beyond.

The three projects axed were road upgrades.

The Canberra south-west corridor package included upgrades to the Tuggeranong Parkway and improvements to intersections and feeder roads along the corridor, such as Athllon Drive, to ease congestion on the corridor, which is used by about 40,000 vehicles a day. Construction was due to begin mid-2025 and be completed by early 2031.

The Kings Highway corridor upgrade from the east of Queanbeyan to Canberra Airport was aimed at reducing travel time and congestion between the ACT and NSW. It covered a small portion of the end of the Kings Highway, along with part of Bungendore Road, Yass Road and a large portion of PIalligo Avenue. There was no timetable for construction when it was cut.

The Boboyan Road upgrade to improve safety and emergency services vehicle access during bushfire season was due to begin mid next year and be completed mid-2024.

As recently as July, the ACT government was keen to talk up the Boboyan Road project and its joint funding. Transport Minister Chris Steel said he was advocating to the Commonwealth that funding for rural roads - such as Boboyan Road - should match commitments given to other states.

"The ACT government welcomes continued investment in our city by the Australian government to co-fund these urban road projects, but we strongly believe the ACT should receive the same share of funding for improvements for regional roads as other states," Mr Steel said in July.

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