City of Melbourne tipped to be back in the black after four years of Covid deficits

Melbourne council’s coffers are finally tipped to be back on the right side of the ledger after four years of pandemic-related deficits totalling more than $130m.

A return to a “modest surplus” is being forecast by Melbourne City Council after four years of pandemic-related deficits totalling more than $130m.

Town Hall’s coffers are tipped next financial year to recover from the impact of Covid bailouts when the council tried to kickstart the city’s economic recovery.

Lord Mayor Sally Capp, who will deliver her seventh and final budget on May 14, said the city’s economy was on track for the Gross Local Product to reach $120 billion by the end of this financial year.

“This growth is a testament to council’s prudent financial management, and investment in business, activations and infrastructure that has retained confidence in Melbourne as a great place to do business,’’ Cr Capp said.

Lord Mayor Sally Capp’s final budget is expected to have the council back in the black. Picture: David Crosling

“We invested strongly and boldly to help kickstart Melbourne following lockdowns, which came at a significant cost and multiple deficit budgets.”

But it’s not yet clear how much Melbourne household rates will increase, after the state government capped rate rises at 2.75 per cent for all Victorian councils for 2024-25.

Cr Capp said reductions at Town Hall were being sought to return the council back to the black.

“We’re working to find savings within our organisation, without compromising the services people rely on.”

The Herald Sun earlier this year revealed that cuts were being expected as part of the budget process.

Cr Philip Le Liu, the head of the Finance, Governance and Risk portfolio, said returning to surplus was an important step.

“Giving us greater capacity to deliver what matters to our traders and residents, while setting up the City of Melbourne’s financial future.

Cost cutting is expected to be a feature of the Town Hall budget.

“We’re making a number of prudent financial decisions without reducing council’s core services – including lowering operational costs, re-phasing projects, improving efficiency across our organisation, investing in new technology and doing more work in-house.”

The City of Melbourne’s deficit for this financial year was forecast to be $17.5 million, and followed shortfalls of $11.7 million, $26.9 million and $57.4 million in the years before.

In the past year, the council has hit motorists with more Sunday and after-hours parking to help the budget repair.

Town Hall is also heavily committed to major infrastructure projects such as the Queen Victoria Market revamp and the development of the Greenline project along the northern bank of the Yarra, a scheme championed by Cr Capp since her election in 2018.

Greenline, expected to cost more than $300m, has already cost ratepayers $15m even though only preliminary works have begun at Birrarung Marr.

Cr Capp announced that she would hang up the mayoral robes at the end of June after six years in the city’s top job. Her deputy Nick Reece will take over until Victoria’s local council elections are held in October.