"There are widespread and increasing skills and labour shortages in the ACT and across Australia, as a result of the prolonged international border closure and decreased labour mobility," Graham Catt, chief executive of the Canberra Business Chamber said.

There was a risk of skills shortages holding back growth, particularly in hotels and restaurants where students and other workers from outside Australia usually worked. He recognised that money was being spent on training Australians but said that shortages were still emerging.

"When the last budget was handed down in October, the government assumed that international borders would begin to gradually reopen towards the end of this year. But given the issues with the vaccine rollout and ongoing international outbreaks, the government now says the border won't open until at least mid-2022.

"There is little good news for tourism operators who rely on international visitors. While the government announced just under $60 million in last year's budget to help some of these businesses diversify their markets, there's little extra support this year.

"Universities that rely on international students will also be impacted by the delay on borders reopening, the slow COVID-19 vaccine rollout and no clearer picture on the future of hotel quarantine.

"To make matters worse for Higher Education, there is no specific funding for universities in the budget.

Mr Catt was pleased, though, that Mr Frydenberg recognised the importance of small businesses in economic growth.

The ACT's Chief Minister also broadly welcomed the federal budget but said he would wait to see how Treasurer Josh Frydenberg's promises were delivered.

"This is an election budget. Big on announcements but it remains to be seen if the Commonwealth's delivery will match," Andrew Barr said.

But he praised Mr Frydenberg on a number of points.

"I have been heartened over the past few months that the Commonwealth has begun to recognise how important Canberra is for our region - we are the major health, education and economic hub for the ACT and southern NSW, as well as the focal point of our nation.

"I also appreciate the Commonwealth government's recognition that Canberra's light rail system is one worth investing in. Let us all hope that the light rail wars that have been a feature of Territory politics for decades are now finally over.

"The Commonwealth government's commitment to fund some long overdue capital works upgrades our national cultural institutions is a long overdue step in the right direction."

The federal government is committing more than $167 million for major capital works for critical Canberra roads and has lodged funds for the southern light rail expansion as part of a multi-billion dollar national infrastructure spend in the federal budget.

Earlier, Prime Minister Scott Morrison said the ACT projects 200 support more than 200 direct and indirect jobs across the territory.

"Our record funding commitment is creating jobs, boosting business investment, while securing Australia's Covid recovery," he said in a statement.

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