Council budget delivers surplus; funding to be “rephased” on major projects

The City of Melbourne has announced a draft budget of $781 million, delivering a “modest surplus” of $101,000 after “difficult decisions” were made to “rephase funding” on major projects.

The surplus is the first time the council has returned to the black in five years, with surpluses forecasted to continue to 2028.

In handing down her final budget, outgoing Lord Mayor Sally Capp said a surplus was made possible after $42 million was made in spending cuts – most of which involved slashing operational costs, rephasing projects, investing in new technology, and improving efficiency across the organisation, along with reducing spending on consultants.

“To achieve surplus in the draft budget for next year, the difficult decisions have really been focused around cutting spending,” she said. “Deficit budgets are unsustainable. The great thing about returning to surplus budgets is that it gives future councils to continue to invest in what counts here in Melbourne.”

However, Cr Capp maintained that spending cuts would not impact major projects including Greenline and the Queen Victoria Market renewal, but funding would instead be “rephased”.

The $316m Greenline trail will deliver four kilometres of promenades, parks and open spaces between Birrarung Marr and the Bolte Bridge.

“The rephasing of the budget for Greenline doesn’t impact in any way the timing or finalising of Greenline and construction is under way,” she said. These works include building the Seafarers Park in Docklands, and Birrarung Marr precinct, all on the north bank of the Yarra River.

The budget has allocated $10m to Greenline in the next financial year, with a further $12.5m in grant funding. This would be followed by $12m and $2m in grants in 2026, $8m in 2027, and $10m in 2028.

Funding of $20 million from the Australian Government has been allocated across the delivery of the Greenline Project Masterplan and the site one works at Birrarung Marr.  

“We have every confidence that Greenline will be delivered. The business case presents a compelling case for why Greenline is important city-shaping project for Melbourne,” Cr Capp said.

Speaking about rephasing projects, she added, “These are difficult decisions, and it does show prudent financial management to make those difficult decisions to rephase funding on major projects.”

The budget, announced on May 14, will see rates increase under the state government’s maximum 2.75 per cent rate cap in the next financial year after being paused during the pandemic. Rates for property owners will increase by an average of $37.

Parking fees are also set to go up by 10 per cent to $54 million with more paid parking to be delivered outside of the CBD, while parking fines are forecasted to increase by 2.4 per cent to $40 million.

Waste charges for residents will be reduced by $15 up to $53 due to the municipality’s growing number of users.

For businesses, more than half of the council’s fees and charges will rise by less than five per cent. But $1.6m will be invested to expand the council’s business concierge program, which is expected to create 640 new jobs and inject $70m into the economy.

Business precinct associations will also get $1.2m, alongside small business grants of $500,000 and $150,000 Aboriginal small business grants programs.

Construction of the Make Room Project will be completed in August, which is repurposing a council-owned building at 602 Little Bourke St to address people experiencing homelessness by providing 50 studio apartments.

Overall, the budget will see $224.7 spent on infrastructure, $64.1 on cleaning and safety, and $49.8 million on open spaces and greening.

$13 million will also be spent on upgrading roads and footpaths.

Revenue from general fines including drinking alcohol in banned public areas, and dumping rubbish, is projected to jump from $2.3m to $3.7m.

The council’s finance, governance and risk portfolio lead Cr Philip Le Liu said returning to surplus was an important step.

“We’ve cleared an underlying deficit of $25.6 million by lowering operational costs, re-phasing projects, improving efficiency and doing more work in-house,” he said.

Public feedback on the draft budget will be open online until June 3 via Participate Melbourne. •

Caption: Cr Nick Reece, Lord Mayor Sally Capp and Cr Phil Le Liu announce the draft budget on May 14. Photo: Hanna Komissarova.