Labor has stepped up its attack on the Morrison government in the wake of an Auditor-General's report exposing a litany of problems with a fund which formed a major part of the Coalition's 2019 federal election campaign.

Urban Infrastructure Minister Paul Fletcher and his department have defended their conduct, but have accepted all six of the recommendations from the watchdog's report.

Among the findings in the 104-page audit report was that the process to select projects for funding was not "demonstrably merit based" - with none of the 47 chosen proposals recommended by the transport and infrastructure department.

More than three-quarters of commuter car park sites were in Coalition-held seats, with 64 per cent located in Melbourne - two and a half times the number in Sydney.

State governments and local councils weren't consulted despite their knowledge of local transport needs. Ten sites weren't located next to train stations, despite the purpose of the fund being to encourage commuters to park and then ride public transport.

Speaking to reporters in Parliament House on Tuesday, Mr Albanese, who is a former transport and infrastructure minister, described the commuter car park scheme as a "debacle".

"This scandal has everything," he said.

"Ineligible projects, projects being funded without actually being delivered, the political targeting of projects, and spreadsheets between the Prime Minister's office and the minister's office."

"This is a government that got all its priorities wrong. And this program is, quite frankly, a total disgrace. And it's exactly why we need a national integrity commission for this government that is addicted to rorting taxpayer funds."

The commuter car park scandal has again shone a light on how ministers are able to use infrastructure programs to funnel money into target electorates.

Mr Albanese did not respond directly when asked if funding decisions should be left to impartial public servants.

However, he said agencies such as Infrastructure Australia should be there to recommend major projects, while small-scale projects should be funded through local councils.

In an interview on ABC radio on Tuesday, Mr Fletcher defended the role of ministers in selecting projects.

"The process we went through was that ministers, elected officials, made decisions about the delivery of infrastructure projects," Mr Fletcher said.

"The great majority of these projects we took to the 2019 election, and so we came to government with the authority of an election."

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The Department of Infrastructure has adopted all six of the Auditor-General's recommendations, including a commitment to improving how it assesses projects to ensure they are eligible and represent value for money.

However, in a letter published in the report, department secretary Simon Atkinson rejected a number of the Auditor-General's findings after being invited to respond to his draft report.

Mr Atkinson disputed the finding that the department's approach to picking projects was "not appropriate", on the grounds that the department considered all of the proposals to be election commitments.

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