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February 25, 2026 \u2014 12:51pm<\/p>\n
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Remove items from your saved list<\/a> to add more.<\/p>\n Save this article for later<\/p>\n Add articles to your saved list and come back to them anytime.<\/p>\n Got it<\/p>\n AAA<\/p>\n Glen Eira City Council will try to become the first municipality in Melbourne to hike rates above a statewide cap to avoid running out of cash.<\/p>\n In a 6-1 vote on Tuesday night, councillors endorsed applying for an exemption to raise rates to 5 per cent in the coming financial year \u2013 almost double the 2.75 per cent cap set by the state government in December<\/a>.<\/p>\n Council officers who recommended the move warned that the council\u2019s cash reserves were otherwise forecast to fall from $67.4 million to $10.9 million by 2034-35 as costs and rising debt repayments outstrip revenue.<\/p>\n \u201cAt this level, we would not have enough short-term funds to meet day-to-day costs or maintain essential services and infrastructure,\u201d the officers\u2019 report said.<\/p>\n The City of Glen Eira covers suburbs in Melbourne\u2019s south-east including Caulfield, Bentleigh and Glen Huntly.<\/p>\n Deputy Mayor Li Zhang moved the motion for a 2.25 per cent rate cap variance and said the council had already tried to reduce costs elsewhere, including by closing early learning centres<\/a> and exiting in-home aged care<\/a>.<\/p>\n<\/p>\n \u201cBut there comes a point where you can\u2019t keep cutting without starting to cut into the basics,\u201d she said.<\/p>\n The independent state body Essential Services Commission will decide on Glen Eira\u2019s application for a higher rate cap later this year.<\/p>\n Councils across Victoria have long warned about their parlous finances<\/a> as costs soar and rate-capped revenue fails to keep up.<\/p>\n Glen Eira has historically had some of the lowest rates in Melbourne, which became locked in when the Andrews government introduced a rate cap for the 2016-17 financial year.<\/p>\n<\/p>\n The cap is linked to consumer price index (CPI) estimations to stop excessive increases, but the Municipal Association of Victoria says this does not accurately reflect council expenses from sectors such as construction, which have increased at a faster rate<\/a>.<\/p>\n Inflation also greatly exceeded forecasts \u2013 and thus the rate cap \u2013 after the pandemic hit, and that caused a $55 million impact on Glen Eira and opened up a \u201cstructural gap\u201d in council finances.<\/p>\n During Tuesday night\u2019s debate, councillors also blamed cost shifting from the state government and a budget blowout in the $75 million Carnegie swimming pool redevelopment.<\/a><\/p>\n A rate rise of 5 per cent in the 2026-27 financial year would generate about $3 million in extra revenue annually, officers said, and would equate to about $37 extra per year for the average rated property \u2013 although the most valuable properties could be charged hundreds of dollars more.<\/p>\n<\/p>\n Councillor Sam Parasol, however, voted against the extra rate hike, citing cost-of-living concerns.<\/p>\n \u201cI feel the community is \u2013 as a whole \u2013 really suffering and hurting,\u201d he said. \u201cI think somehow we need to find other ways to raise our income.\u201d<\/p>\n Seventeen Victorian municipalities have applied for higher rate caps since the system was introduced, but most were smaller rural councils tasked with maintaining vast swaths of infrastructure and services with limited populations.<\/p>\n The City of Monash, which neighbours Glen Eira, is the only metropolitan council to win a rate cap exemption, but ultimately did not utilise it in 2018-19.<\/p>\n<\/p>\n Start the day with a summary of the day\u2019s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter<\/a>.<\/p>\n Save<\/p>\n You have reached your maximum number of saved items.<\/p>\n![\"Glen](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/02\/2e22506148319500764b0aacee33ab5246a0bc00.jpeg\")
Glen Eira City Council has voted to apply for a rate cap exemption in the upcoming financial year.Joe Armao<\/p>\n