Hepburn Shire Council has received approval from the Essential Services Commission (ESC) for a 10 per cent rate rise in 2025–26—comprising the state-imposed 3 per cent cap plus a 7 per cent variation sought by Council to address what has been described as an “unsustainable financial position.”

The increase, which equates to an average of $2.20 per property per week, will generate approximately $1.36 million in additional revenue. According to the ESC, this was necessary to avoid further service cuts and enable the Council to “achieve sustainable outcomes in the delivery of services and critical infrastructure.”

Mayor Don Henderson said the decision provides critical support for the delivery of services without imposing more severe budget cuts. “Without this approval, additional service cuts would have been required,” he said.

In their decision summary, the ESC acknowledged Council’s “proactive approach to its long-term planning” and praised its community engagement. “Hepburn’s decision to apply for a higher cap … is consistent with its long-term planning outlined in its Financial Vision,” the decision letter noted. “The council is currently in an unsustainable financial position and has a financial need for the proposed higher cap.”

The decision was informed by Council’s detailed financial modelling, including $2.53 million in identified operational savings and a commitment to a $9.5 million+ capital renewal program.

CT Management Group, which was commissioned by the ESC to independently assess the application, supported the higher cap. Their analysis highlighted that Hepburn’s cash reserves have been depleted and operational costs have risen significantly since 2018–19. The report noted that between 2018 and 2024, Council increased borrowings, operating costs and capital investment while significantly reducing renewal investment, cash and working capital. The report noted that “Council was clearly living beyond its means” and the financial decisions between 2018 and 2024 established the need for a rate variation.

Despite recent savings, CTMG noted that ongoing savings “remain minimal” and additional strategies, including extended loan repayments and service reviews, may be needed. They estimate potential additional savings of up to $1 million per year if loan repayments are extended for another five years.

Council also announced a doubling of its local rebate for eligible pensioners—from $21 to $42—under the State Government’s Pensioner Rate Remission Scheme.

Cr Henderson acknowledged the financial pressure on ratepayers but stressed the importance of long-term sustainability: “We understand that no one likes paying rates or taxes, however this outcome supports our commitment to maintaining the services and infrastructure our community needs.”

Related stories:

Council Tightens Belt, Boosts Surplus in Latest Quarterly Financial Report

Hepburn Shire Council Seeks 10% Rate Rise Amid Financial Pressures

This article is based on a media release from Hepburn Shire Council and documents published on the Essential Services Commission website.