RDA Illawarra chief executive Natalie Burroughs is confident the federal government will uphold a commitment to fund future rounds of its regional development scheme.
Reports yesterday said federal cabinet had decided to freeze future grant rounds under the Regional Development Australia Fund (RDAF) in a bid to return the budget to surplus in 2012-13.
However, Regional Development Minister Simon Crean said the government was committed to rolling out the remaining two rounds of funding, worth about $600 million.
"We will honour our agreement, we have honoured all of our agreements," he said yesterday.
"This is just another example of scaremongering."
Ms Burroughs yesterday said she felt confident future rounds would be forthcoming, giving other Illawarra projects a chance to apply for funding.
The government has pledged to fund a third of the $15 million Crown Street Mall upgrade, along with half the $5.2 million transformation of the former Warilla police station into the Southern Community Hub and Youth Foyer.
"It looks like the program has been put on hold temporarily while they do a bit of a stocktake and assess their priorities on how they can better co-ordinate with other programs," Ms Burroughs said.
"They're committed to the [further] rounds and they will happen once the stocktake is over."
Nationals Senate leader Barnaby Joyce earlier called on Mr Crean to confirm the funding.
"Is that money still on the table or has it gone?" he asked.
Mr Crean rejected Sen Joyce's assertion that money from the fund had been redirected to pay for the government's promised dental health program.
He said the RDAF was being funded by the minerals resource rent tax.