Rate cap variation sought to ensure ﬁnancial sustainability

Published on 12 March 2025

Hepburn Shire Council is seeking approval for a higher rate cap for the 2025/26 ﬁnancial year to secure its long-term ﬁnancial future. The proposal, which has recently been submitted to the Essential Services Commission (ESC) aligns with the Financial Vision 2024-2027, which was endorsed at the Special Council Meeting on 10 September 2024.

Council is applying for a total rate cap of 10% for 2025/26 which includes a 7% increase to the existing 3% rate cap that was announced on 23 December 2024 by the Minister for Local Government. This move is being made to ensure the ﬁnancial viability and long-term sustainability of Council.

Mayor, Councillor Don Henderson, said that Council is committed to ensuring that we can continue to provide essential services for the community in the years ahead.

“General rates and charges are Council’s biggest revenue stream, making up 66% in the ﬁnancial year 2024/25. Operating in a ﬁnancially sustainable way can be challenging when we have a smaller population size than the average council and when we are working from a historically low-rate base. In 2023/24, we were ranked 60th out of 79 Councils for average rate per property assessment (79 being the lowest rate per property) and when compared with other small shires in Victoria, Hepburn Shire ranked 12th out of 19 (19 being the lowest rate per property).”

An additional 7% rate rise would be on average equal to $2.20 per property per week but will generate $1.36 million to invest in programs and services.

"This proposed rate cap adjustment will form part of ensuring we meet our regulatory requirements and help guarantee the ﬁnancial stability of Council, which is crucial to delivering services and infrastructure for our residents,” said Cr Henderson.

Council implemented permanent operational efficiencies in the 2024/25 year totalling $1.5 million to assist in securing its long-term ﬁnancial future and continues to explore ways to improve service delivery while reducing costs.

“Despite the $1.5 million in permanent savings in 2024/25, and the application for the rate cap variation, Council will need to identify a further $2.6 million in savings for 2025/26 and ongoing through increased revenue and additional operating efficiencies, and reduction in services.”

Council is working on the development of the draft Council Plan 2025–29 and the 2025/26 Budget which will detail these service changes, and savings. These draft documents will be available for public comment in May and will be developed with input from previous community engagement, our community-based deliberative engagement panel and many Councillor workshops.

“Councils, and especially rural councils, do not have enough revenue sources, and this has been acknowledged by both state and federal governments who have current parliamentary enquiries into the sector’s ﬁnancial sustainability and service delivery.”

"We understand that there are many in the community struggling under cost-of-living pressures and this decision is not being made lightly. Rest assured, we are continuously seeking efficiencies to minimise the ﬁnancial burden on ratepayers to ensure that we improve our ﬁnancial position to support our community," said Cr Henderson.

The rate cap application for 2025/26 will now be assessed by the independent Essential Services Commission, and we expect to know the outcome towards the end of April. The application will be available on the ESC website.