Discover what the last three council budgets reveal …
We asked AI to compare Port Phillip’s last three council budgets — 2024/25, 2025/26 and the proposed 2026/27 budget — to see what has changed, what has stayed the same, and what it means for residents, businesses and community groups.
This is a reporting exercise, not an audit, but the pattern is clear: Council is constrained by rate capping and is shifting more pressure into waste charges, fees, savings and tighter project choices.
The big picture
Across the three budgets, the core story is financial discipline under pressure. Council stayed within the Victorian Government rate cap each year — 2.75 per cent in 2024/25, 3 per cent in 2025/26 and 2.75 per cent in 2026/27 — and did not budget for new borrowings.
But the budgets also show the squeeze getting harder. Operating revenue rises from $266.3 million in 2024/25 to $288.8 million in 2025/26 and $317.4 million in 2026/27. Operating expenditure also rises, from $255.8 million to $273.8 million and then $279.9 million.
The operating surplus increases from $10.5 million in 2024/25 to $15 million in 2025/26, before jumping to $37.5 million in 2026/27. That does not mean Council is awash with spare cash. Much of the surplus is tied to capital grants, contributions and asset investment, not day-to-day discretionary spending.
Rates: steady, but still rising
For households, the most familiar number is rates. Total rates and charges increase from $150.9 million in 2024/25 to $158.7 million in 2025/26 and $165.6 million in 2026/27. General rates rise from $135.4 million to $141.3 million and then $144.4 million.
The rate rises are not dramatic year to year because Council is sticking to the cap. The bigger issue is that Council says its costs have risen faster than the cap. In the 2026/27 papers, it says it has absorbed an 8.6 per cent gap between inflation and the rates cap over five budgets.
That helps explain why each budget leans on efficiency savings, fee reviews and careful project staging rather than rates increase.
Waste: the fastest-growing household charge
The sharpest local contrast is waste. Net waste service charges rise from $15.07 million in 2024/25 to $16.99 million in 2025/26 and $20.65 million in 2026/27.
The default waste charge tells the same story. It was $203.60 in 2024/25, rose 13.1 per cent to $230.30 in 2025/26, and is proposed to rise another 20.7 per cent to $278 in 2026/27. The latest increase is driven by a new waste contract, state landfill levy increases, four-stream waste reforms and the transfer of dumped rubbish and public litter bin costs from general rates into the waste charge.
Capital works: down, then back up
Capital spending has swung around more than the rates bill. The capital program was $109.8 million in 2024/25, dropped to $74.1 million in 2025/26, and rises again to $106.6 million in the proposed 2026/27 budget.
The 2026/27 program points to a return to big-ticket infrastructure and renewal, including South Melbourne Town Hall, South Melbourne Market, St Kilda Pier landside works, the Elwood Masterplan, childcare centre upgrades, public toilets, road renewals, bike and pedestrian projects, foreshore assets and St Kilda Marina transition work.
The local question is not just how much Council spends, but whether it can deliver the projects on time. The budget papers repeatedly refer to project deferrals, updated delivery timelines and the need to match ambition with delivery capacity.
Community additions: from small grants to bigger policy shifts
Each budget was amended after community consultation, but the scale and character of the changes differed sharply.
In 2024/25, the changes were relatively modest: $85,000 for Elwood Park Tennis Club and $9,000 a year for three years for the South Melbourne Symphony Orchestra.
In 2025/26, the first budget of the current council, the additions were much larger and more diverse, including $40,000 for the Clarendon & Coventry Street Business Association, $15,000 for the Fishermans Bend Business Forum, up to $295,000 for the Port Melbourne Bowls Club (contingent on matching funds), $250,000 ongoing for social connection and combating discrimination, $250,000 ongoing for community safety, $5.3 million over 10 years for affordable housing, $200,000 ongoing for city amenity, $400,000 for greening, and a $450,000 transfer from the St Kilda Festival to local arts.
In 2026/27, the direct post-consultation package is smaller — $135,000 — but targeted: $70,000 for the National Theatre facade and restroom project, $60,000 for St Kilda PCYC transitional youth programs and $5,000 to examine year-round accessible beaches. Other additions include crime prevention design works, transport safety, Fishermans Bend business support and Special Olympics funding.
Staffing: growth is not linear
Staffing numbers show how service choices affect the budget. The 2024/25 budget planned for 820 full-time equivalent staff after Council exited in-home aged care. The 2025/26 budget rose to 842 FTEs, reflecting extra investment in amenity, local laws, compliance, childcare and the Emergency Services and Volunteers Fund.
For 2026/27, staffing falls to 831 FTEs. Council attributes the reduction to the new Positive Ageing operating model, reduced long day care staffing and operational efficiencies, partly offset by safety, compliance and crisis management roles.
Financial health: low risk, but not stress free
All three budgets use the same Victorian Auditor-General’s Office financial sustainability indicators and all target a “low” risk rating. That is important: on paper, Port Phillip remains financially sound, with no new borrowings and strong working capital.
But the trend is more complicated. The 2024/25 budget identified a 10-year rate cap challenge of $106 million. The 2025/26 budget put the deficit before efficiencies at $80 million. The 2026/27 budget puts it at $88 million. In other words, the headline risk rating is low, but the pressure to keep finding savings and new revenue is ongoing.
The efficiency target also tells a story. The 2024/25 budget used a 1 per cent annual efficiency target. The 2025/26 and 2026/27 budgets temporarily reduce that to 0.7 per cent for this council term, acknowledging that easy savings are harder to find after years of rate capping and inflation.
What it means locally
For residents, the most visible change is not the rate rise itself but the growing waste bill. For community groups, the comparison shows that Council is still responding to local asks, but the scale of new discretionary allocations is much smaller than in 2025/26.
For traders and local precincts, the budgets show continued support for activation, business groups and public realm improvements, but also higher costs flowing through parking, permits and state-imposed levies.
For the broader city, the real test is delivery. The 2026/27 budget returns capital spending close to 2024/25 levels, but that comes after a lower 2025/26 year and continued project deferrals.
Locals will judge the budget less by the spreadsheet and more witnessing their streets, parks, toilets, childcare centres, libraries, foreshore assets and facilities keeping pace with expectations and populations.
