Councillor Matters | Cr Jenny Greenberger, June 26, 2026

Published on 26 June 2026

It’s budget time at council, as I’m sure it is for everyone in business. Times are tough – we all know that – and tightening the belt is a reality.   

Council finances are complex and I don’t want to bore you with the details.  But I think it’s important for people to know where the money comes from to provide council services.   

Everyone knows about rates. In Victoria, rates are capped.  In other words, the Victorian Government sets a maximum percentage by which councils can increase their rates. 

In the current financial climate, we wouldn’t want to increase them any more than is absolutely necessary anyway. It is important to know that government rate capping is about total rate revenue, not a per household cap.  

In 2026/27, council is permitted to raise the overall rate income by 2.7 per cent. Your individual household, business, or farm rate might change by less or more, depending on the annual valuation of your property, but all up, that’s how much more money council can collect from rates.  

Given inflation is currently higher than four per cent, you don’t have to be Einstein to work out what that means for council finances.  

The other source of council funds is state and federal government grants.  

There are Tied Grants for specific purposes, for example ‘Safe Local Roads and Streets Program’ and Untied Grants that can be used for any purpose. Tied grants, for which there is a competitive application process, are getting harder and harder to get. 

Untied grants are annual grants provided to councils, via the state, from federal taxes. At a meeting to explain how this works, the Victorian Local Government Commissioner explained that when this system was set up, local governments were to receive 1.5 per cent of total income tax revenue. Now, councils receive less than 0.5 per cent. If the original allocation was maintained, instead of Victorian councils sharing in $800 million in 2025/26, they would have shared $2 billion. We hear all the time that all levels of government are short of money, but ultimately, it is all about priorities.  

Another situation that makes me cross about how little funding local governments receive is how multimillion dollar, multinationals pay next to no tax, yet we can’t seem to get enough funding to keep basic services in our towns going. It just doesn’t seem fair to me. What do you think?   

Council’s expenses continue to rise, especially the cost of managing our road network. No one loves potholes. Natural disasters too, seem to be a constant in our environment now. Floods, fire, heat, and drought all cost council money to deal with.