Budget 2021-22: What it means for the Local Government sector

This year’s Federal Budget further recognises Local Government’s essential role in supporting local communities, employment and businesses.

It also addresses many of the priority issues that ALGA has been advocating and campaigning for over many years.

The level of Financial Assistance Grants is estimated to be 0.6 percent of Commonwealth taxation revenue. This is unchanged from 2020-21, despite the significant economic impact of the coronavirus pandemic on council finances.

Further recognising our essential role in supporting local communities, employment and businesses, and cumulatively national economic recovery, the Federal Government has extended the Local Roads and Community Infrastructure Program until 2022-23, investing a further $1 billion.

The regions will benefit from a further $250 million investment in the Building Better Regions Fund, and supplementary Local Roads Funding for South Australia has been extended by $40 million over two years.

ALGA’s advocacy has resulted in the Commonwealth’s apprenticeship wage subsidy scheme being extended with a further $2.7 billion in funding. This will provide councils with a further opportunity to address skill gaps and the sector’s ageing workforce profile.


The Deficit will reach $161 billion this year

Growth for 2020-21 is expected to be 1.25 percent, increasing to 4.25 percent in 2022-23

Unemployment is forecast to be 5.6 percent, falling to 5 percent in 2022-23

Financial Assistance Grants

In 2021-22 the Australian Government will provide $2652.2b in Financial Assistance Grants funding. This includes $1.3b which was brought forward from the 2021-22 estimate and paid to States and Territory Governments in 2020-21.  The remainder is $1.326.1b in 2021-22.  (BP3 P89)

Commonwealth estimated taxation revenue (on accruals basis) for 2021-22 is $445.6b (Budget Paper 1, Statement 5 Table 5.1 P129).

The Financial Assistance Grants as a proportion of Commonwealth Tax Revenue in 2021-22 is therefore estimated to be 0.6 %.  This is unchanged since 2020-21 because.  In 2022-23 it is expected to be 0.6%.

 Local Roads and Community Infrastructure Program

Local Roads and Community Infrastructure – extension – further $1b over two years, $400.7m in 2021-22 and $600.7m in 2022-23 (BP2 P161).  Total expenditure is $2.5b.

Stronger Communities Program Round 7 for small capital projects – $28.2m over two years (BP2 P167)

Building Better Regions Fund Round 6 – $256.5m over four years (BP2 P169)

Local Roads Investment Program

National Freight and Supply Chain Strategy – additional funding $28.6m over four years including end-to-end performance evaluation for freight system and $12.1m over three years to fund engineering assessments for local government roads. ( BP2 P163)

Roads to Recovery

$499.5m in 2021-22 (BP3 P59)

$499.5m in 2022-23

$476.7m in 2023-24

$499.5m in 2024-25

Black Spot Program

Office of Road Safety – additional resources – $5.1m over four years (BP2 P165)

Road Safety Program – extension – $1b in 2022-23 includes small scale projects – primarily to State/Territory Governments (BP2 P166)

$137m in 2021-22 (BP3 P55)

$117m in 2022-23

$110m in 2023-24

$110m in 2024-25

South Australia Road Funding

$20m per year over two years (BP2 P156)

Disaster Mitigation

Drought Response, Resilience and Preparedness Plan – $212.2m over four years including funding for local government (BP2 P56)

Building Australia’s Resilience – $1.2b over five years for improving preparedness and response to natural disasters (BP2 P65) – various measures including $4.5m over two years for resilience capability including at local level.

Disaster Recovery Funding Arrangements – $275.9m over three years (BP2 P130)

Digital Connectivity

Digital Economy Strategy – $1.2b over six years (BP2 P73) – includes Peri-urban mobile program of $16.4m over three years for bushfire prone areas (BP2 P74)

Regional Connectivity Program – $84.8m over 2 years (BP2 P169)

Local Government Arts and Culture COVID-19 recovery

COVID-19 Response Package – additional arts sector support – $229.9m over two years (no direct local government funding) (BP2 P148)

Indigenous Visual Arts Industry Innovation – $28.1m over five years (BP2 P150)

Circular Economy

Incentivizing recycling behaviors – $11m over 4 years (BP2 P57) includes $5.9m over four years for a further grant round of National Product Stewardship Investment Fund (BP2 P57) and $5m over three years for Recycling Label (BP2 P57)

$5.4 million towards the Southern Adelaide Materials Recovery Facility in South Australia (BP2 P147)