The Australian Local Government Association (ALGA) says the nation’s councils have been let down with no new local government programs announced in last night’s 2025-26 Federal Budget.
ALGA President, Gladstone Mayor, Matt Burnett said a recent Parliamentary inquiry report confirmed many councils were “at breaking point”, after years of delivering more vital services to communities with less funding.
“Once again, our councils – which are the most efficient level of government – and communities have been overlooked in the Budget with no new programs to address our financial sustainability emergency,” said President Burnett.
“The current funding model for local government is badly broken, and we need significant long-term support to deliver local, place-based solutions to national challenges, including affordable housing, community infrastructure, road safety and natural disasters.
“Increased funding to councils supports the delivery of free and low-cost facilities like local parks, events and libraries – which benefit our communities in this cost-of-living crisis.”
He said councils would be pleased to see the Government following through on its 2023 pledge to gradually increase funding for local road maintenance.
The Budget unveiled an additional $316 million in direct funding for councils, with a $144 million increase in Financial Assistance Grants and a $172 million increase in Roads to Recovery funding. Councils will share $821 million in Roads to Recovery funding next year, compared with $649 million this year.
“We welcome an extra $172 million for the Roads to Recovery program in this year’s Budget, as the next step in their commitment to increase funding to $1 billion per year over the forward estimates,” said President Burnett.
“This will help to significantly improve the safety and effectiveness of the roads Australians use every day.
“Councils maintain more than 75% of Australia’s local roads, and it’s fantastic to see the Government recognising the importance of our local infrastructure, and the key role it plays in building more resilient and connected communities.
“We also welcome an extra $114 million in the Safer Local Roads and Infrastructure Program to enable councils to play an important role in supporting the efficient movement of freight around our nation.
“We are fully committed to partnering with the Commonwealth, and state and territory governments, to achieve national priorities through effective local solutions.
“But we can’t achieve this without greater support and sustainable funding to help build more connected, liveable and productive communities.”
In total, local governments will receive $3.453 billion in Financial Assistance Grants in 2025-26 – an increase from $3.309 billion in 2024-25, in line with the legislated indexation formula. The Government noted it “will continue to work with states in relation to the financial support of the local government sector, including advancing funding earlier than would usually occur”.
Other key funding announcements in the Budget relevant to local government included:
- An increase in Black Spot Program funding, from $131 million in 2024-25 to $150 million in 2025-26;
- An increase in the Safer Local Roads and Infrastructure Program, from $196 million in 2024-25 to $310 million in 2025-26;
- $506 million over five years to achieve better outcomes for First Nations people under the National Agreement on Closing the Gap;
- $132 million for preventative health, including support for sporting facilities;
- $29 million over two years to improve Australia’s resilience to natural hazards;
- $723 million over four years for increased support for apprentices.
Ahead of this year’s election, ALGA has outlined five key funding priorities to provide a significant uplift to council budgets, including:
- $1.1 billion per year for enabling infrastructure to unlock housing supply;
- $500 million per year for community infrastructure;
- $600 million per year for safer local roads;
- $900 million per year for increased local government emergency management capability and capacity; and
- $400 million per year for climate adaptation.
President Burnett said councils were calling on all parties and candidates to put communities first and provide significantly increased funding to local government.
“We want these new programs distributed across all councils, on a long-term, formula-basis, similar to federal Financial Assistance Grants and Roads to Recovery funding, which has been successfully delivered for many years,” he said.
“This would provide a much-needed boost to the sustainability of this sector, and importantly, ensure every community benefits.”
