Whats in 202122 Budget for cities and urban development

What’s in 2021–22 Budget for cities and urban development

Significant announcements made for Australian economic and infrastructure themes

27 May 2021

The 2021-2022 Budget contains funding for a number of economic and infrastructure themes relevant to Australian cities and surrounding urban areas and here are some of the significant announcements. If you are interested in the key housing policy announcements you can read our overview from Managing Director Michael Fotheringham.

Digital connectivity

An important Budget initiative is the Digital Economy Strategy, an investment of $1.2 billion in Australia’s digital future that is ‘laying the foundations for Australia to be a leading digital economy by 2030’.

The Strategy bundles together a number of streams ranging from cyber security to emerging aviation technologies, to changes to the way businesses can depreciate intangible assets like intellectual property and in-house software. It also includes issues relating to urban infrastructure such as:

  • $40.2 million over four years (and $6.3 million per year ongoing) to enhance the Australian Government's location based data infrastructure to create a secure, dynamic and three-dimensional Digital Atlas of Australia's geography, to support business investment, environmental management and natural disaster responses. The initial version of the Digital Atlas will be available in late 2022.
  • $16.5 million over four years from 2021-22 (and $0.2 million per year ongoing) to identify Australian Government data assets and establish a searchable data catalogue
  • $53.8 million over four years to create a National AI (Artificial Intelligence) Centre and four AI and Digital Capability Centres to drive and support small and medium enterprises to adopt and use transformative artificial intelligence technologies
  • $16.4 million over three years to establish a Peri-Urban Mobile Program to improve mobile phone reception in peri-urban fringe areas that are prone to bushfire.

With digital connectivity widely recognised as an important mechanism for economic growth by linking people and activities in cities across the world, funding for digital initiatives is likely to be a feature of future budgets. Our AHURI Brief on Digital Transformations considers the current status of the digitisation of Australia, presenting key issues including the digital infrastructure, smart cities technologies, data governance and digital inclusion.


The Australian Government is providing $3 billion over 11 years to enhance capacity and improve transport infrastructure in Sydney’s western suburbs. This includes infrastructure to support the planned Western Sydney airport at Badgerys Creek.

The Budget will fund an additional $1 billion to extend the Local Roads and Community Infrastructure Program, supporting councils maintain and upgrad community assets and local roads. The Road Safety Program is being extended to 2022-23 with additional funding of $1 billion. This brings the total investment by the Government in these two stimulus programs to $5.5 billion since the start of the COVID-19 pandemic.

The Government will provide $28.2 million over two years from 2021-22 for round seven of the Stronger Communities Programme which provides funding of between $2,500 and $20,000 for small capital projects that deliver social benefits for local communities across Australia.

Resilience to disaster

Cities and urban policy responses are increasing being adapted to respond to changing climate conditions, natural disasters, mitigating climate related risks and reducing greenhouse gas emissions. Our AHURI Brief on Environmental Sustainability examines how urban policy strategies have addressed the resilience of Australia’s cities to climate change, the environmental impact of urban growth and the sustainability of the built environment.

In this policy area, The Government has established the National Recovery and Resilience Agency (NRRA) to support the Australian community prevent and prepare for natural disasters and respond to those events.

The NRRA will merge existing specialist functions to oversee the new Preparing Australia program, a $615.5 million investment by the Government to mitigate disaster risks before they materialise. It implements recommendations from the Royal Commission into National Natural Disaster Arrangements.

For Australians living in areas impacted by cyclone and flooding the Government has created the Cyclone and Related Flooding Reinsurance Pool to reduce the rising cost of insurance premiums associated with cyclone damage. The reinsurance pool will be backed by a $10 billion government guarantee, and will start on 1 July 2022. The Budget has allocated $2.4 million to Department of Treasury to implement the project. The Government expects the Pool will help half a million households, strata units and small businesses across Northern Australia to save over $1.5 billion over 10 years in reduced premiums.

City Deals

The Australian Government is continuing or establishing funding for the ongoing City Deals program including:

  • the Adelaide City Deal, including the development of a new innovation and cultural precinct in the city centre
  • funding to support an Albury Wodonga Regional Deal
  • the Darwin City Deal, including an education and civic precinct in Darwin’s city centre
  • the Geelong City Deal, including the Shipwreck Coast Master Plan, Great Ocean Road projects and projects in the Geelong city centre
  • the Launceston City Deal
  • the Perth City Deal
  • the Townsville City Deal, including the port of Townsville channel capacity upgrade
  • the Western Sydney City Deal to deliver improved community facilities and urban amenities, and to cut development costs and boost housing supply.

For more analysis on key policy areas relation to Australian cities, visit the Cities and Urban hub of the AHURI website.

AHURI is hosting a hybrid National Cities Conference – Uncharted Urban Futures: Australian cities post pandemic on 29 July in Melbourne and online.