Hepburn Shire Council has secured approval from Victoria’s Essential Services Commission to impose a one-off 10 per cent increase in property rates for the 2025–26 financial year. The decision, announced late this week, has sparked widespread community anger in the region that encompasses the spa town of Daylesford and surrounding rural districts. While council representatives insist the rise is “regrettable but necessary” to address a $4 million budget shortfall, ratepayers and local business owners are demanding greater accountability and improved public consultation.
Context: Rates Caps and Additional Increases
Under Victorian government policy, most local councils are capped at a 3 per cent general rates increase each year. In special circumstances—such as significant infrastructure deficits or natural disaster recovery—councils may apply to the Essential Services Commission for an “above-cap” variation. Hepburn Shire lodged its application earlier this year, seeking an extra 7 per cent on top of the standard 3 per cent cap. In its submission, the council cited compounding financial pressures, including debt from failed development projects and costs associated with emergency repairs following severe storms.
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Council Finances: Addressing a Chronic Shortfall
Over the past decade, Hepburn Shire Council has grappled with a series of financial challenges that have eroded its reserves and placed pressure on service delivery. In 2016, council-backed plans to redevelop a Daylesford art-deco building into a multi-use community centre fell through, leaving a $5.65 million loss. More recently, extreme weather events in 2021 and 2022—particularly intense storm systems that inundated parts of Trentham and Creswick—forced the council to expend approximately $3.5 million on emergency cleanup and infrastructure repair. These unforeseen liabilities, combined with rising costs for routine maintenance of the region’s extensive heritage building stock, contributed to an annual cash shortfall estimated at $4 million.
Mayor’s Explanation: A “Once-Off” Measure
Hepburn Shire Mayor Don Henderson has defended the rate rise as a targeted, one-year solution. Speaking to the ABC, he said, “We’ve had to find some more money, and that’s what we’re attempting—to do it as a once-off. We had to show the Essential Services Commission that we’d explored other methods, whether selling assets, taking on loans, or cutting costs, but we still needed to plug the gap.” According to council projections, the 10 per cent uplift will generate an additional $1.36 million, earmarked for core services such as road maintenance, waste management, and heritage building restoration.
Community Reaction: Frustration and Calls for Accountability
Ratepayers across Hepburn Shire have reacted with dismay and disbelief at news of the above-cap rates rise. Many argue that ongoing financial mismanagement should not be shouldered by residents—particularly when the region is already grappling with cost-of-living pressures. At a public information session in Daylesford on Thursday night, dozens of residents voiced their concerns:
• Cameron McPherson, a Blampied resident, warned of a combined “double whammy” once the new Fire Services Property Levy is factored in. “Between this rates increase and the fire levy, my wife and I will face an extra $2,000 to $3,000 a year,” he said. “They’ve wasted an immense amount of money, and now we’re paying the price for their incompetence.”
• Business owners Deborah Clarke and Louise McLachlan said their Daylesford café would incur an additional $300–400 in rates, cutting into already tight profit margins. “We would be more understanding if the community was consulted and if the money were reinvested into projects we actually want—like an indoor pool, which we’ve been asking for 25 years,” Clarke told the meeting. “Instead, we feel sidelined.”
• Local pensioners expressed fear that the increase would force some long-term residents to consider selling up. “This town is changing fast, and now they’re squeezing us again,” said 72-year-old retiree Margaret Ellis. “I can’t afford more hikes—I don’t know how the younger families will manage.”
Heritage and Storm Costs: Complex Pressures
Mayor Henderson emphasized that the shire’s heritage listing requires regular, specialised maintenance of historic buildings—an expense not faced by many neighboring councils. He also reminded ratepayers of the “fairly devastating” storms that damaged roads, bridges, and public reserves in recent years. “We do have these pressing capital works needs,” he added. “We’re not simply raising rates for the sake of it—we have a responsibility to keep our townships safe and our heritage sites intact.”
Comparison with Other Councils
Despite the steep increase, Hepburn Shire’s overall rates remain lower than those in many parts of regional Victoria. Council data indicate the shire holds the 60th-lowest average rates out of 79 Victorian councils. Henderson stressed that the 10 per cent variation applies only to 2025–26; the following year, rates will revert to the government’s standard 3 per cent cap unless another exceptional variation is approved.
Next Steps: Draft Budget and Public Consultation
The council’s draft budget, including the proposed rates rise, is now open for public feedback until June 5. Residents can make submissions via the council website or attend scheduled drop-in sessions in Creswick and Clunes next week. After considering community input, councillors will vote to finalize the budget at the June 26 ordinary meeting. If approved, rate notices will be issued in August, with the first quarterly installment due in September.
Calls for Improved Governance and Transparency
Opposition councilor Elise Thompson, who voted against seeking the above-cap variation, has called for an external audit of the council’s financial management. “Our shire deserves better stewardship,” she said in a council briefing paper. “We need to rebuild community trust through transparent reporting and by prioritizing projects that have clear cost–benefit outcomes.” Thompson has proposed a series of cost-saving measures, including better procurement processes, shared services agreements with neighboring councils, and a review of high-cost heritage contracts.
State Government Response
A spokesperson for the Victorian Local Government Department acknowledged the Essential Services Commission’s role in regulating rate variations and noted that such approvals are “limited to cases of genuine financial hardship or extraordinary circumstances.” The department reiterated that councils remain accountable to their constituents and must demonstrate robust community consultation when seeking above-cap increases.
Impact on Local Services and Infrastructure
The additional $1.36 million revenue will be allocated across several critical areas:
• Road Repairs: An estimated $500,000 will fund urgent patching of rural roads and bridges damaged by recent flooding.
• Heritage Structures: Approximately $300,000 is earmarked for repainting and structural reinforcement of the Daylesford Town Hall and the Hepburn Mineral Springs Pump Room.
• Waste Management: A $200,000 allocation will upgrade recycling facilities and expand the kerbside green-waste collection service.
• Emergency Services Support: The council will contribute $150,000 to support local CFA brigades, complementing the state’s new fire services levy.
• Community Grants: A $100,000 boost to the Small Towns Community Fund will support grassroots events and improvements in outlying villages like Glenlyon and Rocky Creek.
Long-Term Financial Strategy
Council CEO Emma Richards has outlined a Long-Term Financial Plan (LTFP) aiming to eliminate the structural deficit within three years. Key strategies include diversifying revenue through tourism-related initiatives, such as a proposed day-use carpark fee for non-resident visitors, and pursuing grant funding for major infrastructure—particularly in resilience projects that mitigate storm damage. “We recognise the need to shift from crisis funding to sustainable financial health,” Richards said.
Resident Groups Mobilize
In response to the rates notice, local advocacy groups have formed the “Hepburn Ratepayers Alliance,” which plans to hold a peaceful protest outside council chambers on June 3. Spokesperson Lydia Thornton said, “We’re not opposed to paying our fair share, but we reject fee hikes that lack transparent justification or genuine community input.” The alliance is also gathering signatures for a petition calling for a full audit and a moratorium on further above-cap requests.
Conclusion
Hepburn Shire’s decision to press ahead with a one-year 10 per cent rates increase has laid bare the tension between fiscal necessity and community expectations. As residents bristle at the impact on household budgets and small businesses, council leaders underscore the urgent need to address chronic shortfalls and safeguard vital infrastructure. With public feedback due next week and a final council vote looming, the coming weeks will test both the shire’s financial resilience and its ability to restore public trust through meaningful consultation and long-term financial discipline.
