Northland MP Winston Peters says the Budget shows the government has doomed much of the national rail network to a lingering death.
He said KiwiRail would receive less than $200 million in capital funding, in a limited two-year package.
Mr Peters said the government had boasted of spending $4 billion on rail since it came to power but most had gone to big urban centres, while regional rail had received a pittance.
He said the road transport industry had been a huge contributor to National Party coffers, and was getting its pound of flesh in the form of roads paid for by the taxpayer while the government promoted the fiction that rail was heavily subsidised and a taxpayer burden.
Mr Peters said rail should be treated in the same way as roads and given the necessary levels of transport funding.