State can’t wish away the financial problems of local councils

February 27, 2026 — 7:30pm

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When the Kennett government moved to amalgamate Port Melbourne, South Melbourne and St Kilda councils into a single City of Port Phillip, one of the steps taken was to transfer Fishermans Bend to the City of Melbourne, almost halving Port Melbourne’s rate base and rendering it unsustainable on the remainder.

That 1993 statewide process that reduced 210 councils to just 79 sparked fierce resistance. At the Port Melbourne protests, one sign read “BIG IS NOT BETTER”.

Our reporting this week that the mayors of Port Phillip and Yarra have raised the prospect of a fresh round of amalgamations in response to acute budget pressures revived memories of those days.

For Yarra Mayor Stephen Jolly and his Port Phillip counterpart Alex Makin, rates are again an issue, but these days it is a decade-long cap on increases under the state government’s Fair Go Rates legislation, that is in their sights as the demand for and cost of services continue to rise.

The federal government is running an inquiry looking at “how funding arrangements, including indexation freezing, influence the financial sustainability, service delivery capacity and infrastructure investment of local........

© The Age