ALGA Analysis of the 2021-22 Federal Budget
Each year, ALGA provides an analysis of the Federal Budget with a specific focus on its impact on local government. The aim of the analysis is to provide local government with information on the total financial assistance it receives from the Australian Government as well as putting this assistance into context with the government’s overall budget priorities.
Individual fact sheets have been prepared on those topics most relevant to local government. Each fact sheet highlights major expenditures and policy initiatives.
Table of Contents
Page 1: Fact sheet 1 – Financing Local Government
Page 2: Fact sheet 2 – Transport – A Local Government Perspective
Page 3: Fact Sheet 3: 2021-22 Budget Overview
Page 4: Population Assumptions used in the Budget
Fact sheet 1: Financing Local Government
Financial Assistance Grants (FAGs)
- The 2021-22 Budget maintains the system of payments to support local government, through Financial Assistance Grants.
- In 2021-22 the Australian Government will provide $2.6b in Financial Assistance Grants funding. This includes $1.3b which was brought forward from the 2021-22 estimate and paid to State and Territory Governments in 2020-21.
- The Financial Assistance Grants as a proportion of Commonwealth Tax Revenue in 2021-22 is therefore estimated to be 0.6%. This is unchanged from 2020-21.
- Financial Assistance Grants continue to comprise two components: general purpose assistance grants; and untied local roads grants.
| Table 1: Commonwealth funding for local government 2021-22 | ($m) |
|
General Purpose Component |
918.5 |
|
Local Road Component |
407.6 |
| TOTAL LOCAL GOVERNMENT FUNDING | 1,326 |
| *Note $1.3 billion was bought forward into the 2020-21 financial year |
| Table 2: Outlines total Financial Assistance Grants (FAGs) for the period 2020-21 to 2024-25 | 2021-22 $m | 2022-23 $m | 2023-24 $m | 2024-25 $m |
|
General Purpose Component |
918.5 | 1,870.5 | 1,913.9 | 1,934.1 |
|
Local Road Component |
407.6 | 830 | 849.3 | 876.9 |
| TOTAL FINANCIAL ASSISTANCE | 1,326.1 | 2,700.5 | 2,763.2 | 2,811.1 |
| *Note a bring forward payment of $1.3B from 2021-22 was provided in 2020-21 (BP3 P89). |
| Table 3: Financial Grants 2021-2022 | NSW $m |
VIC $m | QLD $m | WA $m | SA $m | TAS $m | ACT $m | NT $m | TOTAL $m |
|
General Purpose Component |
291.5 | 239.4 | 185.6 | 95.3 | 63.3 | 19.4 | 15.4 | 8.8 | 918.5 |
|
Local Road Component |
118.3 | 84 | 76.4 | 62.3 | 22.4 | 21.6 | 13.1 | 9.5 | 407.6 |
| TOTAL | 409.8 | 323.4 | 261.9 | 157.6 | 85.7 | 40.9 | 28.5 | 18.3 | 1,326.1 |
| *Note a bring forward payment of $1.3b from 2021-22 was provided in 2020-21. (BP3 P89) |
Fact sheet 2: Transport – A Local Government Perspective
Commonwealth funding for Local Roads in 2021-22
| Roads to Recovery: | $499.5 million |
| Identified Local Road Grants: | $407.6 million |
| Black Spots: | $137 million |
| Bridges Renewal: | $88.5 million |
Total road funding allocation for councils by State/Territory in 2021-22 is set out in the table below:
| State | Roads to Recovery $m | Bridges Renewal $m | Identified Local Roads Grants $m | Black Spots $m | Total $m |
| NSW | $138.2 | $34.4 | $118.3 | $42.9 | $333.8 |
| VIC | $101.9 | $15.1 | $84 | $34.7 | $235.7 |
| QLD | $102.4 | $23.3 | $76.4 | $27.1 | $229.2 |
| WA | $72.4 | $5.6 | $62.3 | $14.8 | $155.1 |
| SA* | $45.1 | $4.1 | $22.4 | $8.8 | $80.4 |
| TAS | $16.3 | $2.6 | $21.6 | $3.8 | $44.3 |
| ACT | $8.3 | $2.1 | $13.1 | $2.2 | $25.7 |
| NT | $15 | $1.3 | $9.5 | $3.1 | $28.9 |
| TOTAL | $499.6 | $88.5 | $407.6 | $137.4 |
Note: South Australia also received $40 million over two years to continue supplementary local roads funding (BP2P156).
Sum of the components may not add to the total due to rounding, also noting that Financial Assistance Grant funding has been bought forward.
Fact sheet 3: 2021-22 Budget Overview
1. General overview and economic outlook:
Deficit will reach $161b this year
Forecast growth of 1.25% 2021-22, 4.25% 2022-23
5.6% unemployment falls to 5% in 2022-23
International border closures until 2022-23
2. Budget priorities:
Secure Australia’s economic recovery
Build for the future
Job creation
Infrastructure
3. Key initiatives and savings measures:
Health services – vaccine roll out
Tax relief
Housing and small business
Skills. training and childcare
4. ALGA Board priorities
| ALGA Board Priorities | Coalition Budget 2021-22 Measures |
| Financial Assistance Grants | In 2021-22 the Australian Government will provide $2,652.2b in Financial Assistance Grants funding. This includes $1.3b which was brought forward from the 2021-22 estimate and paid to States and Territory Governments in 2020-21. The remainder is $1.326.1b in 2021-22. (Budget Paper 3 p89)
Commonwealth estimated taxation revenue (on accruals basis) for 2021-22 is $445.6b (Budget Paper 1, Statement 5 Table 5.1 P129). The Financial Assistance Grants as a proportion of Commonwealth Tax Revenue in 2021-22 is therefore estimated to be 0.6 %. This is unchanged since 2020-21 because. In 2022-23 it is expected to be 0.6%. |
| Local Roads and Community Infrastructure Program | Local Roads and Community Infrastructure – extension – further $1b over two years, $400.7m in 2021-22 and $600.7m in 2022-23 (BP2 P161). Total expenditure is $2.5b.
Stronger Communities Program Round 7 for small capital projects – $28.2m over two years (BP2 P167) Building Better Regions Fund Round 6 – $256.5m over four years (BP2 P169) |
| Local Roads Investment Program | National Freight and Supply Chain Strategy – additional funding $28.6m over four years including end to end performance evaluation for freight system and $12.1m over three years to fund engineering assessments for local government roads. (BP2 P163) |
| Roads to Recovery | $499.5m in 2021-22 (BP3 P59) $499.5m in 2022-23 $476.7m in 2023-24 $499.5m in 2024-25 |
| Black Spot Program | Office of Road Safety – additional resources – $5.1m over four years (BP2 P165)
Road Safety Program – extension – $1b in 2022-23 includes small scale projects – primarily to State/Territory Governments (BP2 P166) $137m in 2021-22 (BP3 P55) |
| South Australia Road Funding | $20m per year over two years (BP2 P156) |
| Disaster Mitigation Program | Drought Response, Resilience and Preparedness Plan – $212.2m over four years including funding for local government (BP2 P56)
Building Australia’s Resilience – $1.2b over five years for improving preparedness and response to natural disasters (BP2 P65) – various measures including $4.5m over two years for resilience capability including at local level. Disaster Recovery Funding Arrangements – $275.9m over three years (BP2 P130) |
| Stronger Regional Digital Connectivity Package | Digital Economy Strategy – $1.2b over six years (BP2 P73) – includes Peri-urban mobile program of $16.4m over three years for bushfire prone areas (BP2 P74)
Regional Connectivity Program – $84.8m over 2 years (BP2 P169) |
| Local Government Arts and Culture COVID-19 recovery | COVID-19 Response Package – additional arts sector support – $229.9m over two years (no direct local government funding) (BP2 P148)
Indigenous Visual Arts Industry Innovation – $28.1m over five years (BP2 P150) |
| Circular Economy | Incentivizing recycling behaviors – $11m over 4 years (BP2 P57) includes $5.9m over four years for a further grant round of National Product Stewardship Investment Fund (BP2 P57) and $5m over three years for Recycling Label (BP2 P57) Organic waste – Food Waste for Healthy Soils Fund $59.8m over four years and $7.2m over four years for a community and education program (BP2 P53) $5.4 million towards the Southern Adelaide Materials Recovery Facility in South Australia (BP2 P147) |
| Local Government Climate Response Partnership Fund | See Disaster Mitigation Funding above |
5. Other measures of interest for Local Governments in the Coalition Federal Budget:
• Home Ownership – First Home Super Saver Scheme (BP2 P17) and First Home Super Saver Scheme (BP2 P17) Home Builder Extension (BP2 P187)
• Managing burden of feral animals, pests and weeds – $29.1m over four years (BP2 P52)
• EPBC Review Response – $29.3m over four years (BP2 P57) includes independent Envt Assurance Commissioner, extra resources and protection of indigenous cultural heritage.
• Murray Darling Basin, managing water resources – $1.5b over four years (BP2 P58)
• Oceans Leadership Package – $100.1m over five years (BP2 P59)
• Roadmap for respect – sexual harassment $9.3m over four years (BP2 P61)
• COVID-19 Response Package – aviation and tourism support $1.8b over four years (BP2 P69)
• Women’s Economic Security Package – $1.8b over five years (BP2 P81)
• Women’s Safety – $998.1m over four years to reduce and support victims of domestic violence (BP2 P83)
• Newcastle Airport Improvements – $66.1m over two years (BP2 P86)
• Addressing workforce shortages on key areas – Job Trainer Fund extension – $506.3m over two years (BP2 P88)
• Boosting Apprenticeships Commencements wage subsidy – $2.7b over four years (BP2 P88)
• Child Care – $1.6b over four years (BP2 P91)
• Aged Care – Royal Commission Response – $698.3m over five years (BP 2 P99)
• Aged care – home care – $7.5b over five years (BP2 P100)
• Guaranteeing Medicare – rural workforce strengthening – $80.9m over five years (BP2 P111)
• Mental Health – $2b over four years (BP2 P117)
• Emissions Reduction and New Investments – $1.6b over ten years (BP2 P138)
• Northern Australia – next five year plan $189.6m over five years (BP2 P142)
• Community Development Grants Program – $55.5m over three years – specific projects identified (BP2 P147)
• Infrastructure Investment – by State/Territory (BP2 P 151 – 160)
• National Water Grid – $160m over two years includes specified projects (BP2 P164)
• Registration of Remotely Piloted Aircraft Systems and Fee Reform – $28.3m (BP2 P165)
• Rebuilding Regional Communities – $6.1m over 2 years (BP2 P169)
• Scoping public service hubs in Regional Australia – $0.6m in 2021-22 (BP2 P169) and regulatory barriers for business relocation in regional Australia
• Indigenous Skills and Job Advancement – $243.6m over five years (BP2 P173)
• National Strategy to prevent and respond to child abuse – $146m over four years (BP2 P174)
• Cyclone and related Flooding Insurance Pool for Northern Australia – $2.4m in 2021-22 to establish a task force (BP2 P186)
• National Housing and Urban Research Program $5.8m over three years and Housing Data Dashboard (AIHW) – $1.2m over four years (BP2 P188)
Population assumptions used in the Budget 2021-22 (BP3, P103)
Net Interstate Migration (BP3 P105)
Net Overseas Migration (BP3 P104)
