Council is moving to address its looming deficit in the Draft Budget for 2025/26.

The budget outlines a strategy to address ongoing financial challenges through a combination of increased rates and substantial operational savings. The draft documents, which include the Council Plan, Financial Plan, Revenue and Rating Plan, and Asset Plan, are now open for public consultation until 5 June.

At a Special Council Meeting held on 13 May, Council formally endorsed the draft budget and a 10-year financial plan for public exhibition. The documents are underpinned by a focus on core service delivery, asset maintenance, financial sustainability and a shift in how services are managed and delivered.

Council is forecasting total revenue of $43.9 million for 2025/26, including $11.42 million in state and federal grants. However, it faces a structural funding shortfall of approximately $4 million annually. To address this, the budget includes a 10 per cent increase in general rates, comprised of the standard 3 per cent State Government rate cap and a 7 per cent variation approved by the Essential Services Commission.

This rates increase is expected to generate an additional $1.36 million in revenue. Even with the rates adjustment, average residential rates in Hepburn Shire—estimated to rise from $1,701 to $1,820—will remain below the Victorian average of $1,907, placing the Shire 46th of 79 councils in terms of rate burden.

Council has also opted to maintain current waste service charges and kerbside collection fees, while residents using food and garden organics (FOGO) services will see a $40 reduction in their annual charge. A doubling of the local pensioner concession, from $21 to $42, is also proposed. (Pensioners are also eligible for a state government rebate up to $259.50 in 2024/255.)

The budget outlines $2.54 million in operational savings, equating to an 8 per cent reduction in recurrent spending. This follows $1.5 million in permanent savings achieved in 2024/25. Overall, Council will have reduced operational costs by $4.04 million (11.4%) over two years.

Savings have been realised through a restructure of executive and leadership roles, a reduction in full-time equivalent (FTE) staff from 174 to 156, and service realignments across all departments. Areas experiencing the largest budget cuts include:

  • Executive and Leadership: $505,000 reduction (28%)
  • Inclusive Communities: $264,000 reduction (36%)
  • Information and Communications Technology (ICT): $258,000 reduction (14%)
  • Recreation and Sport: $229,000 reduction (26%)
  • Waste, Sustainability and Circular Economy: $212,000 reduction (3%)

Many of these changes reflect a strategic shift from direct service delivery to a model focused on partnership and advocacy, particularly in community wellbeing, the arts, inclusion, reconciliation, sustainability, and youth services.

Despite cost-cutting measures, Council has committed to maintaining investment in core areas such as roads, facilities, asset maintenance, and waste operations, with $11.08 million allocated for these services. Notably, the capital works program for 2025/26 totals $13.07 million, with nearly $4 million funded externally.

A significant component of the capital program includes $6.59 million for road upgrades, more than double the average spend over the past five years. Strategic planning initiatives are also supported with over $1 million allocated for the Township Structure Plans, Rural Strategy, Integrated Transport Strategy, and funding to complete the Environmental Effects Statement to oppose the Western Renewables Link.

Importantly, the budget includes no new borrowings and Council forecasts both an operating surplus and an adjusted underlying surplus for 2025/26. It also expects to maintain a positive unrestricted cash position (money for discretionary spending) by June 2026—an improvement on recent financial years.

The draft budget and financial plan are informed by Council’s Financial Vision, adopted in September 2024 and shaped by feedback from the Deliberative Engagement Panel, Shire-wide surveys, and input from staff and councillors.

While all service areas have experienced some form of budget reduction, Council has sought to protect frontline services where possible. Some changes, such as the likely closure of the Duke Street Customer Service hub in Daylesford, are being aligned with the rollout of digital access and hub-style service delivery elsewhere in the Shire.

Council acknowledges that not all decisions in the draft budget will be popular but argues that they are necessary to ensure long-term financial sustainability and the continuation of essential services.

Residents are encouraged to review the draft documents and provide feedback before Thursday 5 June. Documents are available at Council’s Participate Hepburn portal and hard copy surveys can be found at libraries and customer service hubs.

The Draft Budget is open for public comment until June 5. For more information or to provide feedback, visit: https://participate.hepburn.vic.gov.au/hepburn-together-2025-2029