A major new national report has found Australia’s councils face up to $280 billion in infrastructure renewal and upgrade demand over coming decades, including a $65 billion to $68 billion replacement task for assets already assessed as being in poor to very poor condition.
The 2026 National State of the Assets Report, commissioned by the Australian Local Government Association (ALGA) and based on data from more than 460 councils, found assets currently assessed as fair represent a further $173 billion to $212 billion in future renewal and upgrade demand.
The report, launched at the local government National General Assembly in Canberra, found that while approximately 64 to 69% of local government infrastructure assets were in good condition, function and capacity, a further 22 to 27% were assessed as fair, and 9% were found to be in poor condition.
ALGA President and Gladstone Mayor, Matt Burnett said the findings highlight the scale of the infrastructure challenge facing councils across Australia.
“Local government manages infrastructure that communities and businesses rely on every day, and these assets need ongoing renewal and investment to remain fit for purpose,” President Burnett said.
“Assets in poor condition represent an immediate challenge, and then councils also need to tackle the much larger task is planning for and funding the renewal and upgrade of assets that are currently assessed as fair.
“Councils work hard to maintain and improve their assets, but the scale of future demand highlights the importance of long-term funding certainty.”
President Burnett said local government infrastructure underpins productivity, housing growth and community wellbeing across Australia.
“Australia’s local infrastructure was largely built for a 20th century economy, but today it’s asked to support 21st century productivity,” he said.
“A bridge can be structurally sound but still struggle to meet modern freight requirements. A road can be in reasonable condition but no longer be suited to the traffic volumes and vehicle types using it today.
“Freight vehicles are becoming longer and heavier, communities are growing and changing, and infrastructure is being asked to do more than it was originally designed for.
“Condition alone no longer tells the whole story. The question is whether infrastructure remains fit for purpose.”
The report shows council-managed assets are becoming less capable of meeting modern freight demands, population growth and community expectations, even where physical condition remains sound, the Association says.
“In many communities there is no alternative route, no alternative bridge and no alternative facility.”
“When local infrastructure cannot keep pace with demand, there are real impacts on connectivity, economic activity and community resilience.
“If Australia wants infrastructure that can support future growth and productivity, councils need to be funded to plan for the long term.”
President Burnett said the report reinforces ALGA’s call for Financial Assistance Grants to be restored to at least 1% of Commonwealth taxation revenue.
“Infrastructure has a lifespan measured in decades,” he said.
“Councils need sustainable funding to plan, build, maintain and renew the infrastructure communities and businesses rely on every day.
“Restoring Financial Assistance Grants to at least one percent would help councils invest according to local priorities and ensure infrastructure remains fit for purpose into the future.”
