The cuts were justified by Ms Ley as necessary because of the “cold, hard reality” of the government’s budgetary position.

She had been responding to strong criticism of the government by Albury mayor Kevin Mack, who pointed out the city stood to lose $1.7 million over three years because of funding shortfalls.

Mr Albanese said Ms Ley had “walked away” from road safety and economic productivity in her own electorate.

Further, the former deputy prime minister said Ms Ley had “meekly” accepted her own government’s savage cuts to Commonwealth grants for local roads “in spite of a community backlash”.

The debate was sparked by a letter sent last week by Deputy Prime Minister Warren Truss to all Australian mayors ahead of the Australian Local Government Association’s National General Assembly in Canberra later this month.

Mr Truss wrote that the Local Government Financial Assistance Grant would not be indexed for three years.

“However, additional funding for infrastructure investment, along with the Roads to Recovery, Bridges Renewal and Black Spot programs, is expected to offset the indexation pause.”

In response, Cr Mack described this as “a load of garbage”.

“I don’t understand how it will offset the indexation pause when you have to have specific projects relating to that funding and there’s a high application process,” he said.

Mr Albanese was Labor’s transport minister before the Coalition took power late last year and now serves as the opposition’s infrastructure and transport spokesman.

“In the 2014-15 budget, the Abbott government cut nearly $1 billion in financial assistance grants over the next three years by freezing indexation,” he said.

Greater Hume Council said freezing indexation would put an almost $1 million hole in its budget, while Indigo estimated it would lose $1.76 million in grants.

Mr Albanese said Ms Ley had tried to placate Border councils by claiming the government was delivering new infrastructure, when all such investment slated for spending in Farrer was delivered by the previous Labor government.

“The cuts to road funding go to the heart of the operations of local councils and will affect road safety and economic productivity in rural and regional Australia,” he said.

“Ms Ley should explain to the people of Farrer why they are being asked to pay more fuel excise with the reintroduction of indexation of the excise rate at the same time as her government robs councils by freezing indexation of financial assistance grants.”

Mr Albanese said the federal government’s cuts meant councils and the states had been left to wear the political blame.