The Federal Government has fast-tracked a $300 million payment for the Legacy Way tunnel, Lord Mayor Graham Quirk revealed on Thursday, which will save the council up to $9 million in interest this year.

But the surprise early payment has the council’s Labor Opposition leader Milton Dick sceptical about its timing.

Cr Quirk made the revelation as he announced a $17 million carbon tax refund to ratepayers, following the end of the controversial Labor-imposed measure in the Senate.

Under the funding arrangement for the Legacy Way tunnel, the Federal Government was to pay the council $400 million upon completion of the project, expected in early 2015.

Now, after the fast-tracking of the $300 million payment, just $100 million remains to be paid upon the project’s completion.

“I question the sudden appearance of $300 million into council’s coffers on the same day Graham Quirk magically found $17 million for a one off carbon tax rebate,” he said.

“Graham Quirk has been dragged kicking and screaming and has finally done the right thing after months of pressure from Opposition councillors and the Brisbane community.

“I hope this isn’t a smoke a mirrors trick to prop up the Abbott Government to make them look good.”

The Lord Mayor remained tight-lipped about the reason for the early payment on Thursday.

Cr Quirk also announced landfill carbon permits would be refunded, which means council’s total carbon tax repayments for the year would total just more than $23 million.

Amid much controversy, the council announced an extra 1.9 per cent would be added to annual rates bills in 2012, to cover costs associated with the carbon tax.

The figure was applied to 2014/15 rates bills despite it being repealed in the lower house.

Following Thursday’s confirmation the repeal had finally cleared the Senate, Cr Quirk announced residential ratepayers would receive a one-off average refund of $36 in their October quarterly rates notices.

“This is a show of faith to the people of Brisbane, that we wanted to be upfront and to refund where we haven’t already spent monies related to carbon tax to refund those monies to them,” he said.

He defended not foreshadowing the move, after repeatedly deflecting questions by Opposition councillors in council chambers throughout the first half of the year.

“Quite simply we didn’t know what the final outcome would be in terms of the repeal and the reason we were reluctant was very much justified by the antics that have gone on in the Senate,” he said.

But while the Lord Mayor said rates would fall next financial year due to the carbon tax abolition, he said he could not guarantee 1.9 per cent would come off bills.

“In terms of effects of carbon impact, there will be an automatic reduction in costs,” he said.

“There will be downward pressure on costs to councils and that will be reflected in a reduction in CPI, which in turn will be reflected by way of rates into the future.

Cr Quirk said the early Federal Government payment for Legacy Way would help council refund the $23 million without compromising projects.

“There won’t be a need for a budget review,” he said.

“We have also been in a lucky position where, not known at time of the budget but now known, there has been a $300 million advance provided to this council by the Federal Government in relation to Legacy Way.

“We werent expecting to receive that until the end of the financial eyar, we have received it, so the interest in that will provide us with the means of filling the gap.

“With an expectation we will see some refunds, we believe  we can do this and do it without it impacting on the projects we have announced.”