A general rate cap of 3% has been set by the state government for the 2025/26 financial year. That’s 25 basis points higher than the current year (2.75%) and comes as annual inflation for the 12 months to December dropped to 2.4%.
Nick Staikos, minister for consumer affairs and local government, wrote to Hume City Council saying his decision aims to balance cost-of-living pressures with financial stability.
“It is an expectation that councils carefully consider all aspects of their revenue, balancing the competing priorities of council expenditure with the ability of their community to pay,” he wrote.
According to council figures rate arrears across Hume are at “an all-time high, affecting council’s cash flow”.
On 31 January, overdue rates stood at $43m. There are 26,620 properties in rate arrears, and of these 8,733 (33%) are on a payment plan to clear their debts. (Struggling? Click here or here for help).
Council states its financial performance is above budget, primarily due to additional grants and contributions.
At the Monday 10 February council meeting Cllr Sam Misho won support to investigate a differential rating system for the 2026/27 financial year.
He said: “Currently we use a blanket approach when applying rates across our four classes of properties.
“It is based on a capital improvement value, so if a ratepayer lives in a million dollar property [home] and another ratepayer owns a commercial or an industrial property valued the same, both pay the same amount of rates.”
Officers are preparing a report on introducing a differential rating system for councillors to consider.
