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Federal Budget pressure builds to fix SA road funding gap

6 May 2026
With the Federal Budget set to be handed down next Tuesday 12 May, LGA South Australia is urging the Australian Government to address a long-standing imbalance in road funding, with South Australian councils warning the current funding inequity is creating increasing road maintenance backlogs.

LGA South Australia stepped up its push in Canberra over recent months, arguing that without reform to Supplementary Local Road Funding (SLRF), local road conditions will continue to fall further behind as construction and maintenance costs rise.

LGA President Mayor Heather Holmes-Ross said councils are clear that the status quo is no longer sustainable.

“South Australian councils maintain 76% of the state’s road network, yet we continue to receive the lowest level of federal funding per kilometre in the country,” Mayor Holmes-Ross said.

“That gap is widening in real terms, as costs rise while funding has effectively been standing still.”

SLRF was introduced to address historic inequities in federal road funding, yet has remained fixed at $20 million annually since 2017, eroding its real value and placing increasing pressure on council budgets.

LGA is calling on the Federal Government to:

  • Extend South Australia's Supplementary Local Road Funding beyond 2025–26.
  • Lift funding to $31.8 million in 2026–27 and apply indexation.
  • Provide funding certainty to support long-term financial and asset planning.
  • Invest $56 million in a one-off catch-up payment to address unindexed funding.

Mayor Holmes-Ross said the Federal Budget presents an important opportunity to reset long-term funding arrangements for local roads.

“We want to see the Federal Budget include ongoing, increased, indexed Supplementary Local Road Funding. This will result in a fairer deal for South Australian councils, road users and communities,” Mayor Holmes-Ross said.

“We’ve worked hard to advocate strongly in Canberra with Ministers and MPs, to put forward our case, and while these discussions have been positive, we now need to see this translate into funding in next week's Budget.”

LGA analysis shows that if SLRF had kept pace with road construction cost increases, it would now exceed $30 million per year, demonstrating the scale of the funding erosion.

Mayor Holmes-Ross said the consequences were most felt in regional areas, where councils manage extensive local road networks.

“Local roads are the backbone of the freight network and if they are not properly funded, the impacts flow directly through supply chains and regional economies,” Mayor Holmes-Ross said.

“Every dollar of federal road funding improves safety and productivity, the question for this Budget is whether South Australia will receive a fairer share of federal road funding.”