In my personal opinion i dont see the need for a 2nd airport. They should get rid of the 11pm-6am curfew and spend the money on building new roads like the F6, improving public transport and improving roads.
Even if Sydney airport gets that congested surely they could raise landing fee's on narrow body aircraft to try and encourage airline's to use widebody aircraft.
Who wants to fly between 11pm and 6am? Look at Brisbane and Melbourne and you'll get your answer. There're about 3 flights per day at each of those airports that would be affected by a Sydney-style curfew. No one wants to fly at that time. If I'm looking at setting up in international business in an Australian city I'm not going to choose the one that forces me and my employees to travel at such unfriendly hours. I'm going straight to Melbourne or Brisbane.
Spend what money on other infrastructure? A new Sydney airport won't cost the Government anything. The Government can
sell the right to build a new Sydney airport. It makes the Government money (which can then be spent upgrading surrounding transport infrastructure).
Where are you going to park all these extra widebodies at YSSY? They're already struggling to fit them all in.