THE Victorian government is reportedly considering reforms to the council rate cap that could see the annual limit imposed on councils removed or restructured.
The rate cap, introduced in 2016, sets a maximum annual rate increase for all municipalities across the state, decided by the Minister for Local Government. This financial year the cap is set at 2.75%.
The Mornington Peninsula Shire’s 2026/27 budget lifted rates by the maximum amount allowed but also contained a 17% jump in kerbside waste fee from $433 to $507 per annum.
This amount was down from the $570 kerbside waste fee initially proposed in the draft budget (Ratepayers foot the bill for public waste costs, The News 21/4/26).
The impact of user and other charges on the shire’s annual budget is, despite a 2.75% rate cap, annual income set to rise 4.41% from $298.99m to $312.18m.
During the same period, wages have dropped from $104m in financial year 2025/26 to $99.9m in financial year 2026/27 after an organisation restructure last year saw staff levels drop by 18 full-time equivalent staff (Jobs lost in major shire restructure, The News 19/8/25).
The Australian Services Union, which represents thousands of council workers across the state, has welcomed the move, stating, “The people who collect the bins, staff the local library, mow the parks and care for children and older Victorians have watched their pay slide backwards in real terms for years, in part because the rate cap has left councils unable to fund fair wage rises”.
The ASU claims the average council worker in Victoria earns around $70,000, and since 2021 their pay has gone backwards by as much as 12 per cent in real terms.
“Council jobs used to be good jobs. Council workers could raise a family and pay off a home while serving the community they lived in,” said ASU Victoria and Tasmania Branch Secretary Tash Wark.
“That has changed, and the rate cap is a big part of why that’s changed.
“Ultimately, this is about a liveable wage for workers, plain and simple. Modest reform to the rate cap is the practical way to fix it, and it would let councils properly pay the people who keep our suburbs and towns running.”
Figures from the Mornington Peninsula Shire 2026/27 budget state that projected wages for this financial year at the shire will be just under $100m, with a “full-time equivalent” workforce of 759.2 staff members.
That equates an average full-time wage at the shire of $131,606, compared to the average full-time wage in Victoria, according to the Australian Bureau of Statistics data from November 2025, of $104,712.
Member for Nepean and former shire councillor Anthony Marsh told The News, “As a former mayor, I know firsthand the pressures facing councils. But charging ratepayers more isn’t the answer”.
“Families and businesses are tightening their belts. Councils should too. At a time when Victorians are struggling with the cost of living, removing the incentive for councils to improve efficiency sends exactly the wrong message.
“The answer isn’t higher rates. It’s better financial discipline.”
First published in the Mornington News – 28 July 2026
