We agree with Councillor Davies; the draft budget is financially unsustainable. The surplus has been cut to $10 million, half the usual $20 million, which isn’t enough to cover contingencies for a budget of $260 million.
Council is facing several big challenges, including:
- upcoming Enterprise Bargaining Agreement
- implementation of the new ‘TechnologyOne’ IT system
- continuing increases in waste costs
- blowout in costs for the trial of free 1-hour parking
- continuing inflation exacerbated by the Iran War
With that context, it isn’t prudent to continue to spend, or more accurately, to forgo revenue, by choosing:
- not to increase the waste levy in line with waste costs
- to offer free parking on shopping streets
If those two choices were reversed, we’d be much closer to a $20 million surplus.
In addition:
- the state government’s congestion levy is delivering $3 million each year to Yarra to fund active transport; the budget should clarify which projects (from the Transport Action Plan) will be delivered in 2026/27 using that funding
- the budget document should be expanded to include a visual representation of cash flows, such as a Sankey diagram, that more people would find easier to understand
Financially unsustainable
We agree with Councillor Davies; the draft budget is financially unsustainable. We can see that the budget is ‘right on the edge’ by looking at the surplus, which has been halved to $10 million, which isn’t enough contingency for a budget of $260 million.
The problematic expenditures, or revenues forgone, are:
- choosing to increase the waste levy by the rate cap, instead of increasing it in line with waste disposal costs, which have increased faster than the rate cap. This means that a portion of waste costs have to be paid out of general rates, which imposes a burden on apartment dwellers who don’t get their waste picked up by Council. A key point of separating waste charges from general rates was to ensure that apartment dwellers didn’t have to pay twice, i.e. subsidise home owners. That principle is now being undercut, and the problem will only increase over time.
- choosing to offer free parking on shopping streets, especially on Swan Street, which is thriving. If a Council wished to offer free parking for people who just need to ‘drop in’ to a shopping street, then they should consider aligning with the City of Melbourne, which offers 15 minutes free. This would enable the ‘15 minutes free’ message to be aligned across two council areas.
- offering free all-day parking on tens of thousands of parking spaces across Yarra, via 2P and 4P zones that can be gamed by drivers pulling out, then reversing back into the same parking space.
Considering that our budget is ‘on the edge’, this sort of reckless spending must stop.
What Council should do
We recommend that revenue be increased, by:
- increasing the waste levy in line with waste charges
- charging to park at the kerb on shopping streets
- charging non-resident commuters a reasonable fee to park all-day, i.e. extending parking meters (which sell daily tickets) to many more streets in Yarra, especially ones in commercial areas, and also to streets in residential areas where residents report being overwhelmed by commuters (because the system can limit the number of daily tickets sold on each street)
If Council wishes to reduced expenditure on waste charges, we recommend:
- reducing the red bin to fortnightly collection
- reducing the purple bin to monthly collection
Visualising the budget
We recommend that the budget document should be expanded to include a visual representation of cash flows, such as a Sankey diagram, that more people would find easier to understand.
Use the revenue from the congestion levy
The state government’s congestion levy costs Yarra $636k per year, but also returns $3,000k per year, i.e. it delivers a benefit of $2,400k per year. Funding is on a ‘use it or lose it’ basis, so we recommend that the budget be revised to clarify which initiatives from the Transport Action Plan will be funded.
Stop misleading readers
The cover of the draft budget shows a piece of infrastructure, the Gipps Street ramp, which wasn’t paid for by the City of Yarra. That misleads readers, suggesting that the improvement came from Yarra’s budget. We ask that photographs included in the budget focus on items that were paid for out of Yarra’s budget.
Conclusion
We’re calling on Yarra City Council to adopt a budget that is financially sustainable in the face of identified risks, with a larger surplus to deliver a prudent contingency.
This can be achieved by:
- cancelling the trial of free parking
- increasing the waste levy to match actual waste costs
- charging non-resident commuters a reasonable fee to park all-day
Published 13 May 2026