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City of Yarra Mayor, Stephen Jolly, is sounding the alarm over a financial burden of $10 million in services that his city must now fund alone, after previously sharing the costs with the state government.
“This situation is one of sheer desperation,” Jolly expressed.
“Our finances are being impacted severely, as if shot through with holes like Swiss cheese,” he added.
In response, Jolly has proposed a bold plan: merge the cities of Melbourne, Yarra, and Port Phillip into a single, larger municipal entity to encompass inner Melbourne.
“The aim isn’t to cut services, but rather to broaden and enhance them,” Jolly explained.
But Premier Jacinta Allan says councils shouldn’t be crying poor.
“[Local governments] get a sizeable revenue support from the state government as well to deliver services into their local community and it is my expectation that they focus on that,” Allan said.
Council Watch president Dean Hurlston said councils could cut their own waste.
“What Victorians want councils to do is focus on a very defined, clear set of local priorities – your bins, your footpaths your parks,” Hurlston said.
“Beyond that, councils are actually the ones spending the money doing all those other things that we didn’t ask them to do. “
In the early 1990s the number of Victorian councils shrunk from 210 to 78.
Municipalities like Brighton, Sandringham, Mordialloc and Moorabbin merged into Bayside Council, while Geelong went from six councils -including Newtown and Geelong West – to just one.
The man behind that, Jeff Kennett, says it might be time for a repeat.
“There are 30 council areas in the metropolitan area. I’d like to see five,” Kennett said.
The Yarra mayor fears that the way things are going, some inner-city councils, including his, could go bankrupt in just two years unless “some sort of deal” with the state government is reached.
“I’m trying to have this debate before we get to one minute to midnight,” Jolly said.
Glen Eira Council yesterday announced it would become the first council to apply to exceed the state government’s suggested rate cap of 2.75 per cent in order to keep its head above water.
The council, which covers inner south-east suburbs including Bentleigh, Carnegie, Caulfield and Elsternwick, is seeking to increase the residential rate cap to 5 per cent.
“Council modelled several options. The evidence showed that an additional 2.25 per cent above the rate cap is the minimum increase that meaningfully stabilises Council’s financial position,” the council said in a statement.
“Without action, Council’s cash reserves — which help us cover day‑to‑day costs and respond to emergencies — are forecast to fall from $67.4 million to $10.9 million by 2034–35.
“This is an unsustainable position for any council, and it would place pressure on every service we deliver.”
It is up to the Essential Services Commission to approve the change.
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