The Australian Greens say plans to overhaul the Sydney metro could create a sustainable city for the future, but only if they are underpinned by public transport and affordable housing.

"The plans reported in the media today are an example of what the federal government could achieve through its Infrastructure Australia Fund. However, urban consolidation is only ever effective if there's provision for affordable housing and developments are networked with fast, affordable public transport."

The Australian Greens Transport spokesperson, Senator Scott Ludlam today said the Prime Minister's announcement of $580 million dollars to fast track coal transport is an "horrific use of tax payer funds" and an opportunity to embrace a ‘Green New Deal' has been missed.

"The Prime Minister's decision to inject more than $500 million dollars into railways to transport coal from the Hunter Valley to Newcastle is a disastrous outcome for tax payers and the environment. Once again the government is using tax payer funds to help the coal industry, despite the industry being past its used-by date and environmentally unsustainable," said Senator Ludlam.

The Australian Greens are calling on the Federal Government to increase its investment in public transport, with the Prime Minister due to announce more infrastructure spending later today.

"The Prime Minister has said this morning that the government may be pumping more money into public infrastructure to try and give the economy a boost. Kevin Rudd should seize the opportunity to recognise that by investing in environmental outcomes like public transport and energy efficiency, the government can achieve an economic benefit," said Australian Greens Transport spokesperson, Senator Scott Ludlam.

The Australian Greens have successfully moved a motion for a Senate Inquiry into Public Transport today, and are proposing substantial Commonwealth funding for public transport including allocations under the Building Australia Fund, which is being debated in Parliament today.

Senator Scott Ludlam said creating a fast, efficient light rail network in Perth’s areas of high mortgage default will help rescue land values and improve services.

World-class public transport must become a key component of nation building in the age of climate change and peak oil, and today the Australian Greens successfully initiated a Senate Inquiry to begin the process.

"This is has never been undertaken in Australia before," said Greens public transport spokesperson Senator Scott Ludlam.