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ALGA Analysis of the 2021-22 Federal Budget

Each year, ALGA provides an analysis of the Federal Budget with a specific focus on its impact on local government. The aim of the analysis is to provide local government with information on the total financial assistance it receives from the Australian Government as well as putting this assistance into context with the government’s overall budget priorities.

Individual fact sheets have been prepared on those topics most relevant to local government. Each fact sheet highlights major expenditures and policy initiatives.

Table of Contents

Page 1: Fact sheet 1 – Financing Local Government
Page 2: Fact sheet 2 – Transport – A Local Government Perspective
Page 3: Fact Sheet 3: 2021-22 Budget Overview
Page 4: Population Assumptions used in the Budget

Fact sheet 1: Financing Local Government

Financial Assistance Grants (FAGs)

  • The 2021-22 Budget maintains the system of payments to support local government, through Financial Assistance Grants.
  • In 2021-22 the Australian Government will provide $2.6b in Financial Assistance Grants funding. This includes $1.3b which was brought forward from the 2021-22 estimate and paid to State and Territory Governments in 2020-21.
  • The Financial Assistance Grants as a proportion of Commonwealth Tax Revenue in 2021-22 is therefore estimated to be 0.6%. This is unchanged from 2020-21.
  • Financial Assistance Grants continue to comprise two components: general purpose assistance grants; and untied local roads grants.
Table 1: Commonwealth funding for local government 2021-22 ($m)
General Purpose Component 918.5
Local Road Component 407.6
*Note $1.3 billion was bought forward into the 2020-21 financial year

Table 2: Outlines total Financial Assistance Grants (FAGs) for the period 2020-21 to 2024-25 2021-22 $m2022-23 $m2023-24 $m2024-25 $m
General Purpose Component 918.5 1,870.5 1,913.9 1,934.1
Local Road Component 407.6 830 849.3 876.9
TOTAL FINANCIAL ASSISTANCE 1,326.1 2,700.5 2,763.2 2,811.1
*Note a bring forward payment of $1.3B from 2021-22 was provided in 2020-21 (BP3 P89).
Table 3: Financial Grants 2021-2022

VIC $m

QLD $m

WA $m

SA $m

TAS $m

ACT $m

NT $m

General Purpose Component 291.5 239.4 185.6 95.3 63.3 19.4 15.4 8.8918.5
Local Road Component 118.3 84 76.4 62.3 22.4 21.6 13.1 9.5 407.6
TOTAL 409.8 323.4 261.9 157.6  85.7 40.9  28.518.3 1,326.1 
*Note a bring forward payment of $1.3b from 2021-22 was provided in 2020-21. (BP3 P89)