Budget needs to present "bang for their buck"

by Courtney O'Brien
How will ratepayers receive bang for their buck? That's the question that has been raised as Baw Baw Shire Council develops its 2026/27 budget, in the face of escalating costs, rising inflation and economic uncertainty.
Inflation is predicted to rise higher than previously forecast, with economists from the big banks predicting it may reach 5.4 per cent by mid-June, before easing in 2027.
This is based on a barrel of oil being $170 to June and then dropping to $113 in the following months.
Some economists, however, are reportedly suggesting inflation could reach as high as seven per cent, because of uncertainty around oil and fuel supplies beyond mid-May.
Warragul resident Don McLean, during the March council meeting, asked if council could be specific on the inflation rate built into the framework for the 2026/27 budget.
"The 2026/27 budget has been developed using February Reserve Bank of Australia inflation projections, which indicated inflation was expected to fluctuate between 2.9 per cent and 4.2 per cent, with an average assumption of approximately 3.6 per cent for the year used as the base," council wrote in response to Mr McLean's question.
"In developing the budget, existing contractual increases have been incorporated, supported by historical trend analysis across key expenditure categories."
Council stated that cost escalation risks, particularly those associated with fuel prices and broader global economic conditions, had been identified and were being closely monitored as the budget was developed.
A more conservative outlook and revision of the Long-Term Infrastructure Plan (LTIP) will be considered, due to a forecasted reduction in government grants.
"The forecasted reduction in grant income is primarily linked to capital grant funding," acting strategy and organisational performance director Dean Sutton said.
"This reduction reflects a range of factors, including unsuccessful grant applications for planned projects, delays in funding decisions by state and federal governments, shifts to the timelines of capital projects due to broader economic, social and legal forces."
"As this shortfall relates to capital grant income, it does not impact council's underlying operating surplus or deficit."
Mr Sutton said council also ensured priority projects could proceed by redirecting council cash and grant funding where required. $4.8 million is available in unbudgeted grants, which can partially offset the impact of unsuccessful or delayed funding.
In regard to what could be dropped from the LTIP, council stated it was not in a position to comment yet.
However, using shared procurement arrangements, accessing lower interest rates through Treasury Corporation of Victoria, focusing on financial sustainability measures, including additional revenue streams and ongoing reduction in expenses are all part of council's 2026/27 budget strategy.
Sustainability measures include installing solar panels on 81 council buildings with energy cost savings estimated to be $195,000 to $215,000 per year.
Rate revenue will increase by 2.75 per cent, under the maximum rate cap recommended by the State Government, and council will not consider reducing the rate to ease the financial burden on Baw Baw ratepayers.
There may be an operational efficiency measure in terms of a percentage reduction of employee expenses.
The Gazette asked council to expand on this point. "Until the budget is finalised and formally endorsed in June, it would be inappropriate to comment further on this. The budget currently remains in draft form and can change leading up to the final adoption," Mr Sutton said.
A review of service programs will be undertaken to consider the current state and future demand to determine which services to provide in the most efficient and effective manner.
Council also stated that material and services budgets had fixed percentage increases with an assumption that any increased costs would be absorbed or dealt with at a mid-year budget update and depending on the scale and duration of global events, state or federal government assistance may be required.
The draft budget will be presented to council at its meeting next week, ahead of public consultation from April 23 to May 14.