Federal Budget Snapshot 2026-27

A significant announcement for the sector is the continuation of federal support for local roads, following sustained advocacy from LGA South Australia, calling for the Supplementary Local Road Funding to be continued and indexed.

The Budget also includes a new $2 billion Local Infrastructure Fund aimed at supporting enabling infrastructure such as roads, water, sewerage and power connections needed to accelerate housing development. The fund is expected to support up to 65,000 homes nationally over the next decade, with dedicated funding for regional communities.

The investment aligns strongly with LGA's advocacy, councils and ALGA, which have consistently argued that local government cannot unlock new housing supply without significant upfront infrastructure funding support from the Federal Government.

Details on key South Australian outcomes include:

Supplementary Local Road Funding

A key win for South Australian councils in the 2026–27 Federal Budget is the continuation of Supplementary Local Road Funding (SLRF), which remains central to addressing long-standing inequities in local road funding across the state.

The budget has allocated $230.8 million over ten years from 2026-27 (and $25.7 million per year ongoing and indexed) to continue supplementary local road funding for South Australia. In 2026-27, South Australia will receive $20.6 million.

This is a direct result of the strong advocacy from LGA South Australia over many months, engaging with both State and Federal MPs and Ministers to highlight the need for road maintenance to be increased and securely funded over long-term budget cycles.

This is a positive budget win for SA councils and their road maintenance budgets, recognising long-standing inequity in federal local road funding allocations for South Australia.

“Historically, South Australia has missed out on our fair share of road funding – this budget goes some way to addressing that and means we are able to get on with serving our communities and delivering important infrastructure” said LGA President, Mayor Heather Holmes-Ross.

“LGA South Australia and our members have sought to work constructively with the Federal Government on finding a workable solution that responds to the needs of South Australian communities to have safe, well-maintained local roads. We put forward fair and reasonable solutions, and we are pleased that the Federal Government has listened.”

“We extend our thanks to Minister Catherine King and Minister Kristy McBain who have understood the important role that local councils play in delivering infrastructure for local communities.”

Local Infrastructure Fund

LGA South Australia welcomes the Federal Budget allocation of $2 billion over 4 years from 2026-27 for the Local Infrastructure Fund, enabling infrastructure including roads, water, sewerage and power connections needed to deliver up to 65,000 new homes nationally over the next decade.

LGA President Mayor Heather Holmes-Ross said the announcement was a major win for local government and reflected advocacy from local governments across the country.

“For years, local government has been calling for greater investment in the enabling infrastructure needed to unlock housing supply,” Mayor Holmes-Ross said.

“Councils know first-hand that housing growth cannot happen without the roads, stormwater, water, sewerage and community infrastructure that support new communities.”

Community infrastructure funding

The Budget includes investment in community infrastructure through a continuation and expansion of key grants programs that directly benefit local government including:

• $781.6 million over four years from 2026–27 for further rounds of the Thriving Suburbs program and the Growing Regions program to deliver community infrastructure projects in urban and regional Australia.

• $30.1 million over three years from 2026–27 for round ten of the Stronger Communities Programme to support small capital projects that deliver social benefits for local communities across Australia.

Financial Assistance Grants

The Budget also outlined the Federal Government’s plan to bring forward $2.9 billion under the Financial Assistance Grant program from 2026–27 for early payment in 2025–26, to ensure that local councils have funds to deliver essential services in their communities.

Disappointingly, the total of these grants is estimated to be 0.49% of Commonwealth Taxation Revenue. LGA will work with ALGA to ask that Treasury provide further details on the timing of FA Grant payments to help the local governments with budget setting.

Active Transport Fund

The Budget provides $500 million over ten years from 2026–27 (and $50.0 million per year ongoing) to continue the Active Transport Fund, supporting the construction and upgrade of walking and cycling paths across Australia. This funding is delivered through a competitive grant process, meaning councils will need to apply to secure funding for eligible projects.

Roads to Recovery Funding

The Budget continues Roads to Recovery funding for councils and forecasts its commitment to bring total funding to $1 billion each year from 2027-28. A total of $74.1 million allocated to SA in 2026-27 and approximately $431.3 million over five years. This funding will continue to support councils to deliver local road upgrades, bridge works and road safety improvements.

Black Spot Program

Funding for the Government’s Black Spot Program, which funds safety improvement works in places where there have been serious crashes or where serious crashes are likely to occur, has slightly increased from $150 million in 2025-26 to $157.4 million per year.

The Budget allocates $11.5 million to South Australia in 2026-27.

Safer Local Roads Program

Funding for the Safer Local Roads and Infrastructure Program (SLRIP) will continue, helping address current and emerging priorities in road infrastructure needs. The SLRIP consolidated the previous Bridges Renewal Program and Heavy Vehicle Safety and Productivity Program into a single application-based ongoing funding stream.

South Australia's indicative allocation of the program in 2026-27 is $20.4 million.

Local Roads and Community Infrastructure Program

As anticipated, funding for LRCIP has ceased, with only minimal amounts allocated for unfinished projects.

Fuel Security

The Budget is responding to the current global oil crisis by introducing a $14.8 billion Strengthening Australia’s Fuel Resilience package. This includes:

• $7.5 billion Fuel and Fertiliser Security Facility to build long term fuel resilience

• $3.2 billion Australian Fuel Security Reserve to build long-term fuel resilience

• $1 billion in interest-free loans to help manufacturing and logistics businesses

• Reserving 20 per cent of gas exports for Australians.

Environmental Recovery Funding

The Budget also includes a significant response package to address the harmful algal bloom impacting South Australian coastal waters and marine industries, with $66.3 million committed to environmental recovery, scientific monitoring and community support measures.

The package is expected to support ongoing monitoring and management of the bloom, which has affected marine ecosystems, fishing activity, tourism operators and coastal communities across parts of the state. Funding will also assist research into the causes and long-term impacts of the bloom, alongside measures aimed at improving preparedness and response capability for future marine environmental events.

National Solar Panel Recycling

As previously announced, the Budget commits $24.7 million over three years from 2025–26 to deliver a national pilot for recycling solar panels, including establishment of up to 100 pilot collection sites nationwide, aimed at reducing waste and recovering valuable minerals to support the energy transition.

AUKUS and defence investment

South Australia was also a big winner in the defence cash splash, with major investment for AUKUS, submarine construction, defence industry expansion and workforce development centred around Osborne and Adelaide’s northern industrial corridor. The Federal Government has delivered a major long-term national defence spending uplift, with total defence investment projected to reach $887 billion over the decade.

Other measures for South Australia

• $409 million to support the Whyalla Steelworks and local jobs, along with $6.2 million for Whyalla Airport upgrades.

• $57.5 million to support transformation projects linked to Nyrstar smelter operations in Port Pirie and Hobart.

• $101 million for the Adelaide City Deal including the development of a new innovation and cultural precinct in the city centre.

• $62 million for a Comprehensive Cancer Centre in Adelaide.

• Continued funding for the Regional Road Australia Mobile Program – Pilot Program, with $2.6 million over 2026-27 and 2027-28 allocated to South Australia.

• Continued funding support for the Australian Space Agency, with $21.7 million allocated for ongoing operations.

For more information about support for local Government in the 2026-27 Federal Budget, visit Factsheet: Budget 2026-27 supporting local government