Council Rates Arrears & Budget Pressures: What to Do Now
Costs are climbing fast, but rate caps keep council income well below inflation. Rising interest rates are squeezing households too, leaving communities frustrated and disengaged. Infrastructure costs haven't come down since COVID, and traditional payment plans are failing, with success rates well below 50%.
This summary unpacks the four federal budget measures compounding the pressure: the 32c/L fuel excise cut, a 50% capital gains concession cut, $2.9bn in Financial Assistance Grants paid early, and a $2bn Local Infrastructure Fund for housing growth. It then sets out the four levers councils can act on now, drawing on a live roundtable featuring Patrick Dillon (General Manager Innovation & Engagement, Bass Coast Shire Council), and Tony Rocca, Director Corporate Services at Maroondah City Council and President of FinPro moderated by Payble Chief Economist Dailius Wilson.
Inside: what each budget measure means for local government, the four levers (service planning, revenue diversification, community transparency, and proactive arrears management), what happens if councils don't act, and how rolling arrears into one manageable plan keeps ratepayers on track before hardship deepens.
How we put this together
This summary is drawn from Payble's Post-Budget, Post-Hike webinar, prepared by Chief Economist Dailius Wilson and released 29 May 2026. It combines economic analysis of the federal budget with practitioner insight from senior council leaders on how to protect financial sustainability as rate caps trail inflation and arrears continue to compound.
Payment plan success rates sit below 50%
Councils facing rising arrears can't overcome them with traditional payment plans, given resource constraints and success rates averaging under half, so arrears left unaddressed compound year on year.
Four federal budget measures are squeezing councils
A 32c/L fuel excise cut, a 50% capital gains concession cut, $2.9bn in grants paid early, and a $2bn infrastructure fund all add pressure while rate-capped income stays well below inflation.
Target 45%+ recurring payment adoption
The councils getting ahead are auto-approving affordable plans, getting ratepayers onto them before they fall behind, and offering advance-payment options to build a cash buffer.
Learn from experts
This resource was prepared by Dailius Wilson, Chief Economist at Payble, with contributions from Tony Rocca, Director Corporate Services at Maroondah City Council and President of FinPro, and Patrick Dillon, General Manager Innovation and Engagement at Bass Coast Shire Council. Their combined experience spans two decades of rates, revenue, and financial sustainability leadership in Victorian local government.
