Local councils warned they risk suspension if rubbish rip off continues

More than half of Victoria’s councils are adding “fake costs” to waste and recycling levies, “gouging” up to $200m from ratepayers.

Local Government Minister Melissa Horne says councils can no longer include the cost of graffiti removal in their bin tax. Picture: Alison Wynd

Victorian councils have been busted “gouging” up to $200m from their communities through controversial bin taxes.

A Council Watch investigation has revealed that more than half the state’s 79 councils are adding “fake costs” to waste and recycling levies.

The levies are paid in addition to general rates and are meant to recover costs related only to kerbside collections.

However, many councils are using the levies to pay for other services such as street sweeping, drain clearing, beach cleaning, graffiti removal and street tree maintenance.

New state government guidelines are restricting services local councils can fund via waste service levies. Street sweeping is on the hit list. Picture: Andrew Henshaw

President Dean Hurlston has called on all councils to stop “making up their own rules” and refund ratepayers.

“Gouging residents with fake costs is disgusting,” he said.

Local Government Minister Melissa Horne released bin tax guidelines in December 2023 in response to many councils adding costs that were “not consistent with best practice” and “eroded public transparency and trust in local government”.

The guidelines came into force on March 1 and Ms Horne said she expected councils to act promptly.

“Failure to adopt good practice as per the Guidelines may necessitate further action,” she said.

In 2023, the Herald Sun revealed that councils were slugging Victorians with sneaky new bin taxes of up to $179, and raising rubbish rates between 10 and 20 per cent.

A recent survey by Local Government Finance Professions (FinPro) revealed that at least 43 councils were charging for activities that should not be included in the waste service fee.

Of the 55 councils that took part in the survey, only one council did not have a waste service fee and 11 believed they complied with the guidelines.

The survey did not name individual councils but revealed the extra charges totalled $103.2m across 39 councils.

Estimates varied from $63,000 for a small rural council up to $14m for a metro council with a median cost for all councils of $1.5m.

Council Watch president Dean Hurlston is calling on councils to sop using waste levies to “gouge” ratepayers Picture: Kiel Egging.

Mr Hurlston said the total amount Victorian ratepayers were being “overcharged” was likely to be closer to $200m.

FinPro president Bradley Thomas said the guidelines were “inappropriate and counter-productive” and most councils would not be able to absorb the extra costs into their general rates revenue.

However, in a letter to FinPro, Ms Horne said the government expected councils to exercise “prudence in expenditure, avoiding unnecessary financial burdens on their ratepayers”.

She acknowledged that councils were limited in their ability to raise rates revenue by the rate cap – which has been set at 2.75 per cent for 2024/25.

Ms Horne pointed out that while individual councils could apply for a higher rate cap through the Essential Services Commission, none had done so since 2019.

FinPro has sought legal advice in relation to the new guidelines and was told the rules were not “legally binding”.

The legal advice warned that councils would be subject to criticism for refusing or failing to comply with the guidelines.

It also pointed out that Ms Horne could recommend the suspension of councillors who failed to comply with a written direction issued under the Local Government Act 2020.

Mornington Peninsula Shire came under fire for slugging ratepayers $45 after adding more services onto its bin tax, including extra ‘free’ green waste weekends. Picture: supplied

Mornington Peninsula mayor Simon Brooks said if the guidelines were legislated they would have a multimillion-dollar impact on the shire’s budget.

“The sector as a whole would be significantly affected,” he said.

“This levy is one of the few areas councils can attain actual cost recovery as opposed to the negative impact of rate capping,” he said.

“The levy is independently audited and is cost neutral.

“Being able to charge cost recovery means we can fund tasks such as beach cleaning, the green teams and extra services over the summer period with the spike in visitors.”

Mornington Peninsula Shire came under fire in 2023 for adding a string of new services costing $45 to its waste charge, including tip vouchers for renters, more patrols by the council’s clean team and chasing illegal dumpers.

The total waste services charge was $446 and residents opting in to the council’s green waste collection had to pay a further $150.

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