Hepburn Shire Council adopted its 2026/27 Budget at a Special Council Meeting on 30 June, following a public exhibition period and community submissions. The vote was not unanimous: Cr Brian Hood opposed the Budget, citing concerns about the Shire’s long-term financial sustainability. Cr Tim Drylie also opposed the budget.
The division at the Council table reflects a wider debate about the Shire’s financial position. The adopted Budget provides for an underlying operating deficit of $679,000, which the Council attributes to significant increases in annual depreciation expense in recent years. An underlying deficit means the Council’s day-to-day revenue is not covering the full cost of its operations, including the wearing out of its roads, buildings and other assets. While the deficit is modest in dollar terms, it follows a very substantial run of deficits over the past 7 years and comes despite a budget the Council itself describes as focused on restraint and “getting back to basics”.
Mayor Cr Tony Clark defended the Budget as disciplined and financially responsible, saying it balances community needs against a difficult financial environment. He thanked community members who made submissions on the draft, and Council staff and Councillors for their work in preparing it.
Cr Hood noted that Council had deficits of a total of $45 million in recent years, funded by borrowings and a reduction in net assets, and that a deficit for 2026/27 was avoidable. He argued that the budget contained no strategy to reduce overdue rates debt of $3m and the inability to match renewal works on existing assets falls $2m to $3m short each year – a factor that signifies increased risk and questions longer-term viability.
What’s in the Budget
The Budget commits $10.5 million to capital works, funded from Council cash, rate-funded reserves and $2.8 million in grants and contributions, with no new borrowings. The program prioritises renewal of existing assets and completion of current projects over new works, with $4.83 million — nearly half the program — allocated to roads.
On the positive side of the ledger, the Budget includes an improved unrestricted cash position, and all of the Council’s financial reserves are fully cash-backed — sound practice that is not legislatively required, and an improvement on prior years.
Ratepayers will see the Victorian Government’s 2.75 per cent rate cap applied to general rates. The average waste charge will fall by $70, from $610 to $540, which Cr Clark attributed to residents sorting their waste streams more effectively and reducing the Shire’s waste management costs.
The Council also added a new part-time grants officer position to the Budget at adoption, aimed at improving the Shire’s success in securing state and federal funding for services and projects.
The sustainability question
The Council’s media release points to external pressures, arguing that a decade of insufficient state and federal support has left councils managing rising costs with constrained revenue. Cr Clark warned that without better support from other levels of government, councils “will have little choice” but to reduce services in future budgets. By contrast Cr Hood pointed out that federal and state governments had provided over $102m cash in the past 7 years, one third of all inflows, demonstrating strong support of Council.
That argument has genuine force — cost-shifting and the erosion of untied grants are well-documented pressures across the sector, and they fall hardest on small rural shires like Hepburn with limited rate bases and large road networks. But it is not the whole story. Hepburn’s underlying deficits, its depreciation burden and its asset renewal backlog are also matters within the Council’s own control, and they are precisely the concerns that led Cr Hood to vote against adoption. The Budget was prepared under the Council’s Financial Vision 2024–2027 and Financial Plan 2025–2035, which may chart a path back to sustainability — but the 2026/27 result suggests that path remains a work in progress, and the Council’s own exhibition material conceded that further reform is essential to secure long-term sustainability.
The Budget lands at a difficult moment for the organisation, with CEO Bradley Thomas’s resignation taking effect in August and an interim leadership arrangement yet to be announced. Responsibility for delivering the Budget — and for the deeper financial reform it acknowledges is still needed — will fall substantially to whoever occupies the CEO’s office over the coming year and to a councillor group willing to make strong strategic decisions.
Changes to the budget process
In a notable procedural shift, the Council is reviewing how it prepares future budgets, including moving community engagement to the beginning of the process rather than consulting on a near-final draft at the end. That change would address a long-standing community criticism — that by the time a draft budget is exhibited, the substantive decisions have already been made.
The full 2026/27 Budget will be available in coming days at participate.hepburn.vic.gov.au/budget.
