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Key points
- The City of Melbourne released its $850.7 million draft budget on Tuesday.
- The council’s draft budget delays a promised return to surplus for another two years, recording a $17.1 million deficit.
- The budget does not cut back on spending but increases rates and fees with revenue from parking fines budgeted to increase from $34 million to $39 million, a 12.6 per cent increase.
- Outdoor dining parklet fees in the city centre are set to double from $278 per square metre to $555 per square metre.
Ratepayers, motorists and even buskers will be charged more for life in the CBD after June 30, while the city council forges ahead on major infrastructure projects with rocketing construction costs.
The City of Melbourne’s draft budget released on Tuesday shows rates and charges will be increased in the coming financial year, and a promised return to surplus has not eventuated.
Lord Mayor Sally Capp and team arrive to deliver the City of Melbourne’s draft budget for the year. Credit: Chris Hopkins
The council will implement the biggest allowed increase in rates of 3.5 per cent in its $850.7 million draft budget released on Tuesday, but that is still not enough to get it in the black.
The council recorded a $17.1 million deficit and says it will not return to surplus for another two years.
The City of Melbourne is not cutting back on its expenses, pushing on with $60 million for the Queen Victoria Market renewal project and $17 million for the first stage of the Greenline Project.
The council’s staff numbers will swell further with 44 full-time staff to be added, lifting the total number of full-time staff to 1522.
Councillor and audit and risk committee chair Philip Le Liu said the council was “not immune to all the [financial] conditions out there” when asked to account for the fact the council wasn’t back in surplus after that was forecast in last year’s budget.
“The important thing is we are looking to get back in surplus in 2025. And we’re doing that prudent financial management,” he said. “I’d love to be in surplus right now, but it’s not something we can control”.
Le Liu said the majority of new staff would go to staffing a new library set to open at the Queen Victoria Market redevelopment.
“So we are investing in people because to deliver a capital project of this size, we do actually need people to manage it and deliver it,” he said.
City of Melbourne has allocated $2.1 million to Christmas lights in its draft budget.Credit: Simon O’Dwyer
The council’s overall expenses will increase by $32 million, a lift of 5.8 per cent from last year.
The budget for external audit fees has increased by 360 per cent from $57,000 for the year to $263,000.
“We always do internal audits on things,” Le Liu said. “We are just auditing as part of our internal audit plan.”
Although state projects like the Airport Rail have been put on ice in part due to inflation, Lord Mayor Sally Capp said all major infrastructure projects by the council were going ahead as planned.
“From our perspective, it’s important that we deliver on those commitments and that we understand the economic value that they will drive into the future,” she said.
Among new projects for residents are two new “pocket parks” in Chapman Street, North Melbourne and Miles and Dodds Street Reserve in Southbank at a cost of $16.5 million.
Those parks are in addition to a new park the size of two Olympic swimming pools on Bedford Street in North Melbourne, where construction will begin in the next 12 months.
In revealing ratepayers would be subjected to the maximum 3.5 per cent rate increase, Capp said the council had done “everything we can limit the amount of increased costs that we pass on to our ratepayers” and that the council had “absorbed as many financial pressures as we possibly can”.
One of the biggest forecast increases is the council’s maintenance budget, which is pitched to jump 50 per cent from $16.3 million last year to $24.6 million this year.
Contracts for picking up waste, maintaining parks and gardens, traffic management and events “will increase substantially,” according to the budget document. Among the maintenance budget is $2.1 million dedicated to Christmas lights – more than the $1.3 million dedicated to IT systems maintenance.
To cover these costs, the council is increasing its fees and fines, which include fines for animals, by 25 per cent, town planning fees by 36 per cent and permits revenue by 38 per cent.
Revenue from parking fines is budgeted to increase from $34 million to $39 million, a 12.6 per cent increase. Last week, the council revealed it was expecting to make an extra $2.7 million in revenue a year by removing free CBD parking on Sundays and operating parking meters until 10pm instead of 8.30pm.
The CIty of Melbourne has also increased fees for outdoor dining.Credit: Eddie Jim
Parking fees are budgeted to deliver $50 million, up from $47 million, a 7.2 per cent increase.
Outdoor dining parklet fees in the city centre are set to double, from $278 per square metre to $555 per square metre.
Buskers will also be slugged $207 for a busking application fee, which includes a safety assessment; previously, there was no charge for this.
Busking permit fees are doubling from $30 a year to $60 a year.
After previously pausing work on bike lanes in the Hoddle Grid, the council has set aside $4 million to spend on bike infrastructure, which includes the designs for bike lanes along Flinders Street.
“There will be extensive comprehensive consultation on those designs on Flinders Street,” Capp said. “As a capital city council, we are dedicated to continuing to invest in bicycle lanes in the city. This is an issue of safety. This is an issue of reducing congestion, and it is about making sure that everybody that wants to come into the city has options, no matter what form of transport they choose.”
Capp said the $4 million investment into bicycle lanes represented about 2 per cent of the City of Melbourne’s entire infrastructure spend.
“They are important to us, but it is important also to have perspective,” she said. “We’re spending $4.2 million on repair and renewing of our road system and almost $4 million on repair and renewing of our footpaths.”
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