Federal Budget falls flat for South Australia
While the Budget has a focus on cost of living relief through income tax reductions, it offers little in the way of broad investment for South Australia’s infrastructure and communities.
The government’s confirmation of Roads to Recovery funding increases is simply more of the same, without addressing the growing need for significant, new infrastructure and road funding projects that will genuinely support regional and local priorities.
We acknowledge the government's investment in stage one of the High Productivity Vehicle Network, including important upgrades between the South Eastern Freeway and Sturt Highway, such as the duplication of the Swanport Bridge and the Murray Bridge Township Bypass at Monarto. This follows ongoing advocacy from LGA, councils and industry groups to get this important project moving.
We also acknowledge a $219.3 million investment in the Whyalla Steelworks, which is strongly welcomed, aimed at supporting the local economy and securing jobs in the region.
Financial Assistance grants continue to remain stagnant at just half a percent of national taxes, a far cry from the 1% councils have been asking for.
Here's a look at the key details local government should be across.
Overview
The Budget shows the government's fiscal strategy seeks to combat inflation, deliver responsible cost of living relief and build a stronger economy and stronger budget.
Since the 2022 Pre-Election Economic and Fiscal Outlook, the Government has:
- improved the underlying cash balance by a cumulative $207 billion over the seven years to 2028-29
- avoided around $60 billion in interest costs in the 11 years to 2032-22
- $94.1 billion in savings and reproritisations
- returned 69 per cent of tax receipts to the budget over the seven years to 2028-29.
Cost of living and housing
Measures to support cost of living include:
- Energy bill relief –$1.8 billion over two years from 2025-26 to extend energy bill rebates.
- New tax cuts – from 1 July 2026, the 16% rate will be reduced to 15%. From 1 July 2027, the 15% rate will be further reduced to 14%.
- Housing support measures - $58.8 million over five years from 2024–25. Support for modular housing construction, certification schemes, and continuation of the Regional Home Guarantee and Family Home Guarantee streams.
- $800 million Help to Buy scheme expanded to broaden criteria.
- Childcare and education support - $5 billion towards a new universal early childhood education and care system.
Inflation has moderated to 2.4% over the year to December 2024, with projections to remain around 2.5% by 2025. The unemployment rate remains low at 4.25%.
Financial assistance grants
In 2025-26, the Australian Government will provide $3.45 billion in Financial Assistance Grants, representing 0.51% of Commonwealth Tax Revenue. This is consistent with the level of Financial Assistance Grant funding from the 2024-25 Budget of 0.51%.
This comprises:
- General Purpose component – $2.39 billion.
- Local Road component – $1.06 billion. South Australia will receive $222.8 million in Financial Assistance Grants, including $164.5 million for general purposes and $58.3 million for local roads.
Road and infrastructure funding
The federal government is maintaining several key road funding programs:
- South Australia will receive $20 million supplementary road funding in 2025-26.
- Roads to Recovery – $821.1 million in 2025-26, increasing to $1 billion per year by 2027-28. South Australia will receive $75.6 million.
- Safer Local Roads and Infrastructure Program – $310 million annually. South Australia will receive $29.5 million.
- Black Spots Program – Increased to $150 million annually from 2025-26 to 2028-29. South Australia will receive $10.4 million.
- Active Transport Fund – continuing program for bicycle and walking paths, South Australia will receive $1 million in 2025-26.
- Regional Roads Australia Mobile Program – $50 million over two years to improve mobile telecommunications on major roads. South Australia will receive $2.3 million in 2025-25.
- The Budget papers also note the government’s $17.1 billion Infrastructure Investment Program – which provides funding over 10 years from 2024-25.
Major infrastructure projects
- Curtis Road Level Crossing Removal – $125 million allocation
- Whyalla Airport Upgrades – $6.2 million in 2025-26 to strengthen the Whyalla Airport runway
- Port Augusta Wharf Refurbishment – $12 million over two years from 2025–26.
Additional measures
- $132 million in 2025–26 to improve health outcomes through preventive health and other health initiatives.
- $29 million over two years to improve Australia’s resilience to natural hazards. This includes $17.7 million for the Bushfire Community Recovery and Resilience Program and $5.4 million for National Emergency Management Agency engagement with states on emergency response capability.
- Remote Airstrip Upgrade Program – extended with $50 million over three years.
- Regional Airports Program – extended with $40 million in competitive grants over three years.
- $219.3 million over two years from 2024–25 to support the Whyalla Steelworks.
- $723 million over four years for increased support for apprentices.
For more information on how the Federal Budget impacts local governments, visit the Australian Local Government Association website.
LGA South Australia’s engagement with federal MPs will continue to ensure local government interests are represented.