But when the federal government gets around to spending some of the $10 billion it promised for national rail infrastructure in Sydney's west, it will want those new lines immediately flanked by houses, apartments, and businesses.

"If you want an example of failure, look at Leppington Station, which was built in a cow paddock and is still in a cow paddock," said Angus Taylor, the assistant minister for cities.

"We've got to have the land use planning done upfront," he said.

Federal Treasurer Scott Morrison on Tuesday said $10 billion would be spend on a National Rail Program, to be spent on an unidentified list of projects.

In Sydney, those rail projects are likely to intersect with the proposed Badgerys Creek Airport, to be built by the $5.3 billion Western Sydney Airport Corporation established by the federal government.

But Mr Taylor says that $10 billion in grant funding will be able to be stretched further, through a new Infrastructure and Projects Financing Agency. That agency, to be running by July, will try to raise private sector funds for road and rail projects directly supported by the Commonwealth.

In western Sydney, those extra funds are likely to be raised through property developments close to new rail stations.

"It almost certainly won't provide all of the funding," Mr Taylor said of the new agency. "But even if there's some potential for financing in these projects, it helps the project to get over the line."

The state and federal governments have not yet agreed on where and how any new rail lines through a Badgerys Creek Airport should operate.

The state Transport Minister, Andrew Constance, said on Wednesday that scoping work on the airport rail links would be finished in the next few months.

"We are not going to commit to anything until we actually know what we are building and the cost of it," Mr Constance said. "There are a number of options which need to be assessed and that assessment is under way."

Mr Taylor, however, indicated that if the development around any new rail lines was well planned, more than one line could be built.

"Part of the point of having these alternative funding mechanisms is if you get that right you can sequence this pretty rapidly, and in the process you are building a new city," he said.

The government faced criticism for its level of direct funding for road and rail projects. The chief executive of industry lobby Infrastructure Partnerships Australia, Brendan Lyon, said direct federal infrastructure spending had dropped to its lowest level in a decade.

Mr Lyon said that if it was easy to raise private finance for public projects, state governments would already have done so.

"This isn't the first time we've looked for easy answers to hard problems," Mr Lyon said.

Labor's federal transport spokesman, Anthony Albanese, criticised the government for not funding a rail line to a Badgerys Creek airport in Tuesday's budget.

"Sydney West Airport needs to be a catalyst for jobs and growth in Western Sydney," said Mr Albanese.