2025-26 State Budget

10 June 2025

The 2025-26 Budget, handed down by Treasurer Stephen Mullighan, is the final state budget before the 2026 election. While it contains some welcome initiatives, it falls short on key local government priorities.

There are positive commitments in areas such as planning reform and housing, but the budget lacks targeted investment in enabling infrastructure, circular economy transition, and addressing the growing road maintenance backlog.

LGA Chief Executive Officer, Clinton Jury, said while councils continue to partner with the state government, more alignment and investment is needed on the priorities communities are calling for.

“We welcome the inclusion of the State-Local Government Economic Partnership Accord, but this year we want to see that move beyond good intentions.

“We need joint action, particularly where infrastructure, planning and major investment are concerned – this has been a direct ask by LGA to strengthen state-local coordination for major reform and economic investment.

One of the few bright spots is the $131 million committed to Stage 1 of the Greater Adelaide Freight Bypass. While this partially complements the federal government’s $525 million pre-election pledge, it doesn’t deliver the full funding package needed to unlock the bypass' productivity and safety benefits.

“As a nationally significant project, we need to see the full funding package and move toward delivery. There is clear precedent for a federal-state 80/20 split on major freight corridors, and that’s the model we support.”

In contrast, regional road funding received only $7.5 million over three years – despite a known $2 billion maintenance backlog.

At the same time, primary producers, businesses and communities continue to struggle with ongoing drought conditions.

“On drought, we couldn’t be clearer that the current response doesn’t go far enough. We are now working together with the state’s peak agriculture body on how councils can help with relief to primary producers, and we hope the government takes that seriously.”

Key measures

Office of Local Government

The budget maintains support for finalising the 2022 review of council elections and the long-awaited Community Engagement Charter.

It also commits to completing the State-Local Government Economic Partnership Accord – an important mechanism to embed stronger collaboration between councils and the state.

Greater Adelaide Freight Bypass

$131 million has been committed for Stage 1 of the High Productivity Vehicle Network. This partially complements the federal government’s $525 million commitment. However, it will result in an ongoing stalemate on the funding split.

LGA continues to advocate for a federal-state 80/20 split to unlock the full benefits of the bypass.

Regional roads

With only $7.5 million over three years allocated, regional roads remain drastically underfunded despite a known $2 billion maintenance backlog.

Councils and regional communities are constantly being asked to do more with less, we need more funding for road safety and the local road network.

Housing

The budget confirms previously announced housing investments, including Playford Alive East ($270.1m), Onkaparinga Heights ($30.5m), Southwark Master Plan ($104.7m), and $135.1 million from the Housing Australia Future Fund.

LGA will continue to push for greater investment in enabling infrastructure, such as critical water futures, to enable liveable, well-serviced growth.

Planning reform

The budget supports continued investment in ePlanning and upgrades to the PlanSA platform, alongside planning system reform priorities. Funding for council engagement and regional planning capability is still lacking.

Climate and environment

Notable investments include $14 million for Adelaide beach sand replenishment, $8.3 million in COP31 planning, and $109.7 million for River Murray environmental flows. However, councils remain without dedicated climate adaptation funding.

Circular economy

LGA has previously advocated for tangible action to improve council waste management through legislative change, mandatory product stewardship options and expansion of the container deposit scheme in South Australia to include glass wine, spirit and cordial bottles.

A commitment to transitioning to circular economy principles is essential, to help keep kerbside services sustainable. This budget does not allocate adequate resources to action these important measures to create viable pathways for diversion and waste avoidance and minimisation.

Health

A New Mount Barker Hospital: $45 million over three years to support the delivery of the new Mount Barker Hospital providing 102 beds and other essential services.
Bordertown Memorial Hospital: $8 million over three years to support aged care infrastructure upgrades at Charla Lodge Bordertown Memorial Hospital (jointly funded by the federal government).

Domestic, Sexual and Family Violence

LGA welcomes $3.5 million in funding over two years to coordinate the government’s response to the Royal Commission into Domestic, Family and Sexual Violence.

We will continue to advocate strongly seeking fixed term funding for a minimum of 5 years for a dedicated domestic, family and sexual violence project officer based at LGA to assist councils support the state government response and implement the Our Watch local government toolkit.

Drought relief

The previously announced $73.4 million package is a step in the right direction, but LGA stands with the agricultural sector, peak bodies and councils across the state in calling for stronger, more immediate funding support.

Find out more

For detailed information, refer to the State Budget website.

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