Federal budget Tamworth: 'Get on with it!': Joyce tells state not to wait after UNE Tamworth campus project misses out on Commonwealth funding for the third federal budget in a row

The Commonwealth has already provided its fair share to the initiative, he said in an interview with the Leader.

"We've been asked we've delivered - get on with it!" he said - pointing to "in-kind funding" totaling tens of millions of dollars as the Commonwealth contribution for the project.

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The state government has for two years required a $10 million co-contribution before releasing their $26.6 million commitment to the scheme.

On Tuesday, Treasurer Josh Frydenberg handed down the third federal budget without any direct funding for the UNE project.

The Member for New England said the Commonwealth was already giving the university far more money than the state government.

Mr Joyce said the state should release their money, even without a federal dollar committed directly to the project.

"Otherwise, it'd be like saying we'll provide further mental health in Headspace if the state government buys us a fighter jet. State governments don't buy fighter jets," he said.

He pointed to tens of millions in Commonwealth-funded university places, research block grants and other funding as the federal contribution.

"They wanted $10 [million] extra, we've provided $10 [million] extra, done," he said.

University Reference Group chair Mitch Hanlon remained hopeful of getting funding for the project under pressure of an election campaign.

"To me and you [$10 million] is a huge amount, but for the budget it's nothing. I'm hoping the money will appear in an election campaign, like they always seem to do, that's how we got the state government money locked in. I'm hopeful. We just need to keep the pressure on," he said.

Tamworth Mayor Col Murray said the city's leaders would not stop until Tamworth had a university.

"I don't think this city is prepared to accept that we can't have a university. We will have a university. It must happen and will happen," he said.

"We've just got to work harder and be smarter about the way we achieve that."

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Mr Joyce said the Commonwealth had only rarely provided line-item funding for projects like the second campus and always in economically-depressed regions.

"We're a massively growing centre," he said.

"I can't sell the case that Tamworth is caught in an economic malaise."

A spokesperson for the Department of Regional NSW did not answer a number of questions by the Leader, including whether the state government would continue to wait for the federal government until releasing its money, and how much patience it has over getting the Commonwealth co-contribution.

"The NSW Government has put money on the table. We have allocated $26.6 million towards this project," the spokesperson said.

"The Commonwealth is important to the viability of the project as the Commonwealth has primary responsibility for funding higher education."

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