Leaving aside the environmental and social benefits of improving the rail link between Canberra - Sydney - Newcastle, the Phase 2 report into a High Speed Train in South East Australia found that "Of all the segments, Sydney-Canberra performs best on a stand-alone basis, but none of the segments would generate satisfactory economic returns as stand-alone lines."

Sydney-Canberra: 5.6million passengers EIRR 3.8% EBCR 0.9

Newcastle-Sydney: 4.2million passengers EIRR 1.3% EBCR: 0.4

EIRR(economic internal rate of return)
EBCR(the economic benefit-cost ratio)

Source: Table 6-1 Analysis of segment performance, Staged delivery, High speed rail study phase 2 report on 11 April 2013

Only $12billion to improve rail link between Sydney and Newcastle or $22.2billion to improve rail link between Canberra and Sydney as a Pilot. Source: Table 6-6 Cost and demand build up between Brisbane and Melbourne with preferred staging to 2065 Staged delivery, High speed rail study phase 2 report on 11 April 2013

Greens-Labor Agreement, 1st September 2010
"agreeing that an implementation study for High Speed Rail should be completed by July 2011;"

More about High Speed Rail

West Connex Road Link: "The high-level target capital expenditure estimate for WestConnex, including property acquisition
and construction is approximately $10 billion ($2012), assuming an optimised design configuration
and a procurement and delivery approach that learns from the best of international experience.
Should WestConnex be adopted by the NSW Government, further work is required to refine this
estimate." http://www.infrastructure.nsw.gov.au/media/16598/insw_tfnsw_and_roads_and_maritime_services_wcx_25_sept_2012_final_120927.pdf

Local experience with tunnels in Sydney

Cross City Tunnel (Inquiry): This inquiry is a completed Parliamentary inquiry conducted by the Cross City Tunnel Committee. In accordance with the resolutions establishing the Joint Select Committee, the Committee's first meeting took place on Thursday 1 December 2005. The Committee tabled its first report on 28 February 2006, and the second report on 19 May 2006. The Committee's inquiry was extended to include the Lane Cove Tunnel by resolution of the Legislative Council on 4 April 2006 and by resolution of the Legislative Assembly on 6 April 2006. The Committee reported on the Lane Cove Tunnel on 23 August 2006. http://www.parliament.nsw.gov.au/prod/parlment/committee.nsf/0/A69743663274E980CA2570C10082D5D2

The State Government has committed to a massive road proposal from Infrastructure NSW. It involves building 33 km of road, extending and widening both the M5 and the M4 and providing a link between them, via a long tunnel under the inner west of Sydney. So far, costs are expected to be $10-15 billion over at least a decade. http://www.wollicreek.org.au/wolli_valley/issues/more-on-westconnex-the-general-arguments-against