A new swimming pool complex in Sunbury may be further out of reach than many residents hope, with Hume City Council warning that Victoria’s strict 3% rate cap is crippling its ability to fund major community facilities.
In a submission to a parliamentary inquiry into local government funding, the council said escalating construction costs and shrinking state government grants are making it impossible to deliver infrastructure such as aquatic centres, which can cost between $50m and $70m to build.
“Councils cannot deliver this type of infrastructure alone,” the submission said, pointing to the abolition of the $50m Growing Suburbs Fund and cuts to Sport and Recreation Victoria grants. Funding for aquatic centres, once worth $3m, has dropped to just $500,000.
Sunbury residents have long pushed for a modern aquatic and leisure facility to replace the aging Ligar St pool and sports complex, but the council’s report suggests hopes for a new centre may be unrealistic without major state or federal backing.
The council’s broader message is that Victoria’s Fair Go rate cap is squeezing council growth at the very moment it is being asked to deliver more.
Tied to the Consumer Price Index, council states the cap does not reflect rising costs in construction, wages and compliance. It wants a new Local Government Cost Index and an additional allowance linked to housing targets, which in Hume’s case will add nearly 80,000 new homes by 2051.
The council is not directly pushing for an immediate rate hike above 3%, but does want reforms to make applying for a higher cap easier. Currently, the process through the Essential Services Commission is described as “resource-intensive, time-consuming and politically fraught,” with no certainty of approval.
Council figures show how fast costs have risen. A sports pavilion in Kalkallo cost $1.7m to build in 2020; a similar one in Mickleham four years later cost $3.3m. Those pressures have already forced Hume to delay [unnamed] projects across the city.
Developer contributions are also falling short, states the council report. The funding gap in the Sunbury South and Lancefield plan has blown out from $32.5m to more than $80m in less than five years, leaving the shortfall to be covered by capped rate revenue.
Hume Council warned that unless the system changes, it will face tough choices: cut services, delay infrastructure, or take on more debt.
The report said councils are already absorbing cost-shifting from state and federal governments, including in libraries, school crossings, and maternal health.
While the council supports protecting residents from sudden rate hikes, it said the current cap is “inappropriate” for fast-growing municipalities.
“Despite demonstrating restraint and efficiency, the financial pressures created by the current rate cap framework remain unsustainable,” the submission concluded.
Figures released by the council February 2025 showed it was staring down the barrel of a $54m shortfall in rates take, with $43m owed by residential property owners across the city. Half the city is not paying its rates on time (or at all).
Council released a quarterly financial report in May (covering the period to 31 March). We are still waiting to see the report covering the period to 30 June.