07/05/2026
Budget Submission
Strzelecki Ward Citizens Assembly Budget Submission
On South Gippsland Shire’s Draft 2026/7 Budget
Recommendations
In light of the global economic and financial outlook Council approve a one-year rate freeze that is more than affordable with projected surpluses and reserves whilst maintaining its services and facilities as per their draft budget and that it reconsiders continuing such a freeze in second and third years of the proposed budget
That Council seriously consider reverting to at least a 4-week consultation period to allow groups to meet to discuss the budget and respond to it if they desire as an act to restore confidence in Councils consultation and engagement which is standing at only 46%. Three weeks is manifestly inadequate and runs against the community comment period of at least 28 days under Victoria’s Local Government Act requirement for public exhibition of a draft budget before adoption.
That South Gippsland Council provide an open community/council workshop where residents can speak to their budget submission and Council can respond to them in finalising the budget.
That South Gippsland Council restore the detailed 3-year capital works budget and the notional 15-year budget so that people are actually aware and informed about what Council is doing including in the capital works budget rather than just aggregated figures.
Introduction
Criticism can be dealt with in a number of ways. It can be taken as genuine feedback on what people’s real needs and priorities are and whether you are addressing them. In other words, constructive criticism. Or it can be denied, deflected, or belittled with organisations becoming closed and defensive. Sometimes defenders of organisations can fall prey to their own PR believing all is ‘hunky dory.’
There is widespread resident dissatisfaction across the South Gippsland shire about inadequate consultation processes and the absence of genuine opportunities for feedback. Effective Council leadership requires feedback to be viewed as a positive benefit - for feedback to be weighed up, understood and responded to. Feedback gained through commissioned customer market research is also particularly valuable to give insight into resident perceptions of Council’s performance and on where to focus improvement efforts.
Resident Rates Freeze Petition
In collecting the 2000 plus signatures for a 3 year rate freeze what was evident that 10-20% didn’t care or weren’t interested; a good 20-30% didn’t require any convincing; but dangerously for our Shire 30% of respondents didn’t see any obvious value of the shire to them, notwithstanding the road, pools, libraries, preschools, halls, parks etc available to them. Of particular concern would be 10-20% highly vehement and critical verging on aggression. This was quite startling for people who actually believer in Council’ role and functions and wish to improve its performance and perception in the community.
The world is a less trusting place today with declining standards of living and the reality of an untamed social media creating dysfunctional rabbit holes that many succumb to. All democracies are in crises which is not healthy for our communities or governance. It behoves all of us to take a constructive approach to what we can all do.
We all are suffering from a cost-of-living crisis where incomes have failed to keep up with the full costs of living. This has been heightened by the current Middle East crisis where fuels costs have risen and will according to analyst likely remain high until at least 2027, when replacement for damaged Middle Eastern oil assets could have been made. We believe that what we are asking for is affordable and doable.
Positives and Negatives in the draft budget
The positives in the draft budget are the maintenance and continued funding for services and facilities notwithstanding the deteriorating economic environment. The negative is its failure to address the growing disquiet in the community and the strong desire for some form of rate relief.
Benefits of Rates Freeze
Providing rate relief for our community would strongly communicate to the community that:
Councillors are really listening and genuinely care.
That Council is empathetic with not only their situation but also ours and will act.
Would begin restoring trust in Council with more than 50% believing positively in its overall performance.
Rate relief would join with prudent financial management to provide a strong positive message to the community. Council has the opportunity to address the reality that only one in two people have a positive view of it. Or it could simply deny the message!
Discussion
South Gippsland Shire has claimed it has made a budget for Council and the community that recognises the current global economic crisis and that it has been financially prudent. Yet the proposed simply assumes that it requires the implementation of the State Government limited rate rise of 2.75%. The budget expenditure is projected to rise in 2026/7 by 5.7%, not a real ‘tightening of the belt’. This unnecessary rate rise provides no relief for ratepayers let alone apparent empathy and recognition for the dire financial position of families, business, and farmers. It is a budget cast from the narrow perspective of the organisation and not immediate needs of the wider community.
A full-time worker in Australia on average earnings has lost around $8,000 in living standards over the past three year, when mortgages and cost of living are included (Richardson & Jerico, Australia Institute 2026). Australian households experienced the largest fall in disposable incomes across the OECD over the past two years, and economists forecast it will take another two years for purchasing power to recover to pre-pandemic levels. (Australian Financial Review Michael Read Aug 24)
We all are suffering not just Council!
We already have above $3 for diesel and it is possible if a solutions is not found soon that petrol is likely to move towards $3 per litre. Economists are already predicting.
an estimated 5% inflation rate. Our personal incomes in the Shire are roughly 15–25% lower than Australia and our family incomes are roughly 20–30% lower than Australia Source ABS). We are less able than most Australians to deal with a rapid spike in the cost of living. Our Councillors need to show some compassion and empathy for all of us?
Councils proposed budget has not been cut back at all. Its expenses are predicted to rise by $4.281m. Its staffing remains the same; its capital works is virtually unchanged; it surpluses decline by $5.934m, but it remains at a health $ 6.443m.
South Gippsland is still underperforming with an average key performance indicators in the State Governments Customer Satisfaction Survey for Councils of only 49%. This has been on a declining path since 2012 and has declined by 7.4%. Our group over a month collected over 2000 signatures for a petition to freeze rates for 3 years. This would cost around $1.04m in the first year and some $3.5m over three years which would more than be met by existing reserves without any cut back to services and facilities.
State Government Customer Satisfaction Survey of Councils
South Gippsland Shire 2012 2025 % change
Overall performance 50 45 -10.0
Consultation & Engagement 53 46 -13.2
Customer Service 65 57 -12.3
Overall Direction 43 44 2.3
South Gippsland Shire Avg 52.4 48.5 -7.4
Large Rural Shire 56.5 47.75 -15.5
SGS vs large rural shires -7.3 1.6 -51.9
Its overall Council performance has had declined by 7.4% since 2012 and its consultation and engagement by 12.3%.
South Gippsland Shire has the fourth highest rates per its peer group of large rural shires. In the latest data for 2024/5 its average rates per assessment vs Large Rural Shires Group was $2004 and South Gippsland Shire $2280. South Gippsland in comparison with its group of large rural Shires is 13.7% above the average cost of rate per assessment and is 4th highest of 19 similar Councils.
Rather than benchmarking and managing performance and costs and emulating the best practice performance Council has taken the easy path out and has historically increased rates above cost-of-living costs (see table and graph below). Between 2006 and 2016 Council increased rates by 41.7% above cost of living. State government rate capping has cut this but still remains 27% above cost of living between 2006-26, People are paying $711 above the cost of living of this period.
Council is ‘crying poor,’ but its budget and accounts suggest otherwise, Council draft budget sees healthy surpluses from 2026/7 to 2029/30 averaging $10m. Council in its balance sheet on page 27 of the draft budget has ‘Other financial assets’ (read reserves) of $24.983m and no change on balance from 2025/6. The average reserves for the next three years are $28.483m. The budget fails to provide any detail of what these funds are allocated for if anything.
Council has in the light of increased costs of natural disasters has a provision of $3m to reserves. It has paid out $24m in the past four years but been reimbursed $19m.
In the past ten years it has become increasingly difficult to analyse the budget with information that was once provided deleted including the 3 year and 15-year capital works budget and the nature of reserves. It is clear with the continued surpluses and reserves provide the flexibility for Council to provide rate relief. Given the declining global outlook and financial position after the Petition was launched it may well be prudent to consider at least one year’s rate relief. It is more than affordable and would provide Councillors with an opportunity to really listen and be genuinely empathetic in responding to the community.
From the available information Council has reserve of $24.98m in 2027 and the next three years of $28.483m. The balance of reserves over Commitments is $16m in 2026/7 budget (see appendix below). If a one-year rate freeze were implemented the reserves after allowances would remain at nearly $15m.
Improving Council level of satisfaction in the Customer Satisfaction Survey
State Government Customer Satisfaction survey has as reported a decline across the board in Overall Performance, Consultation & Engagement and Customer Service for our Shire. While correlation is not causation or definitive proof the decline has been associated with when Council has progressively reduced opportunities for genuine engagement and consulting and reduced budgetary information. Open question time has been dispensed with and replaced with a very limited and pre vetted questions only abut Council business on the day. What used to be participatory collaborative workshops on Council’s budget, plans and policies (IPA2 Spectrum level 4) has been replaced with one-to-one comments and feedback (IPA2 Spectrum level 2) that is a superficial and according to IPA2 Participation spectrum at the lower levels and not open to genuine community discussion as occurred previously.
IPA2 Spectrum of public participation
Level 1 Level 2 Level 3 Level 4 Level 5
INFORM CONSULT ENGAGE COLLABORATE EMPOWER
Current limited Council level Previous Council Level
Council’s engagement with the community using the IPA2 spectrum is really primarily operating at low levels one and two and fails clearly to operate at higher levels and only at levels two.
In order to be accountable and transparent lesson should be learned that when these things were done Council had much higher levels of satisfaction.
Extracts for Council’s Draft 2027/229 budget
Surpluses 2026-2027 $10.67m (p6)
Balance Sheet
Reserves
Other Financial Assets (p27)
2025 2026 2027 2028 2029
$24.98m $24,983 $27,983 $27,983 $32,983 Avg 26-29
Commitments
Carried forward works(p9) $2.16m (p9)
Trust Fund $2.82m (p27)
Emergency Funds $3.00m (p 5)
Total $8.96m
Balance Reserves vs Commitments $16.02m
Proposed rates increase $ 1.039
Balance after zero rate rise 26/7 $14.981m
Surpluses Deficits (p83)
2026 2027 2028 2029 2030
$16.6m $10.67 $11.92 $8.44m $9.010
Comprehensive Income Statement (p26)
Surplus/(deficit) for the year
2026 2027 2028 2029 2030
$16,602m $10,668m 11,924m $8,436m $9,01m
Rates (P26)
2026 2027 2028 2029 2030
$54,420 $56,570 $57,575 $59,070 $60,603
Increase $1,039 $1,00 $1,496