Newly-announced fast-rail links between major cities and regional centres will significantly cut travel times and Scott Morrison believes they will help ease population pressures.
But the prime minister has been criticised for jumping the gun on funding announcements in a bid to win votes just weeks out from the May federal election.
Mr Morrison announced $2 billion for fast-rail between Geelong and Melbourne, along with business cases for links in Sydney and Brisbane.
"To take the pressure off our fast growing cities you need to be able to improve your links with your satellite cities around the country," Mr Morrison told reporters in Geelong on Friday.
The funding for the 20-year fast-rail plan will be included in the April 2 budget, but the project relies on Victoria matching the $2 billion commitment.
Another $40 million will go to developing five new business cases across the country for the fast-rail links, which will travel at an average speed of 160km/h.
But Victorian Transport Infrastructure Minister Jacinta Allan said Mr Morrison had jumped the gun on the Geelong project.
"It's been interesting today to see an election eve thought bubble come from the prime minister," she told reporters.
"Two billion dollars is simply not enough money to do that work."
Mr Morrison said the money was a start, and based on advice from experts about what it would cost to upgrade the line.
"That's what business cases are for, that's our understanding at the moment, if the costs are greater than that then we'll have to address that at the time," he said.
Opposition Leader Bill Shorten said the announcement was a cynical attempt to chase votes in Victoria.
"How do you know when there's going to be a federal election? The Liberal Party discover infrastructure in Victoria. What a coincidence," Mr Shorten told reporters in Melbourne.
The fast-rail announcement is the latest slice of the government's population growth plan, with Mr Morrison announcing earlier this week the number of annually available immigration places will be cut from 190,000 to 160,000.
Australian Associated Press