Funding to upgrade the Busselton-Margaret River Airport terminal remains on hold.
During an estimates hearing at parliament on Thursday, the Transport Minister confirmed there was $10 million in the budget for the project yet it required the tick of approval from regional development minister Alannah MacTiernan.
The Nationals WA transport spokesperson Vince Catania said Ms MacTiernan's refusal to release the funds was hurting the South-West economy.
"The Busselton Margaret River project was on time and on budget prior to Labor coming to office in 2017," he said.
"There is $60 million worth of infrastructure on the ground already and attracting major airlines to fly direct into the South-West hinges on the terminal upgrade."
Regional development minister Alannah MacTiernan said they were faced with more than $40 million of debt left by the previous government and undertook a review of Royalties for Regions.
"We decided the financially responsible thing to do would be to work towards securing an airline before commencing construction of the new terminal," she said.
"The clear evidence of our commitment to giving the project every chance to succeed is that we have kept the allocation for the terminal in the budget at a time when we have had to make some very tough decisions.
"But, as we have repeatedly stated, there is no point building a new terminal without an airline secured to fly there."
South West MLC Colin Holt said it was disappointing that Bunbury MLA Don Punch was refusing to stand up for the project he once championed as a game changer for the entire South-West.
"People in Mr Punch's electorate are losing out due to these prolonged delays, which is costing jobs and jeopardising tourism growth in the region."
Mr Holt said money for the project had been in the budget since 2016.
"The McGowan Government is gloating about having a budget surplus yet won't fund a vital region-building project such as the upgrade of the Busselton Margaret River Airport terminal."
Bunbury MLA Don Punch said the business case for this project was always predicated on the City of Busselton securing a commercial passenger airline to fly to and from the airport.
"This is the missing piece of the puzzle to complete the project," he said.
"All infrastructure elements necessary for the airport are complete, with the exception of the terminal."
Vasse MLA Libby Mettam said we have a regional aviation project supported by key stakeholders and industry, with an absence of support from Government when they should be doing everything to see this project succeed.