Melbourne Council Week: Major Zoning Shake-up for Southbank as Budget Tensions Mount

Melbourne's local government landscape shifted sharply this week as the City of Melbourne planning committee approved a contentious zoning amendment for Southbank that will pave the way for residential towers alongside the cultural precinct, marking one of the most significant planning decisions in the area since the redevelopment of the arts district two decades ago.

The decision, which drew heated objections from heritage advocates and residents of nearby East Melbourne and Carlton, clears the path for up to 2,500 new residential units across five proposed sites along St Kilda Road and the Yarra riverfront. The approval came despite concerns about parking pressures and the potential loss of green space adjacent to the South Lawn.

"This will fundamentally reshape how people experience Southbank," said the planning committee chair at Monday's meeting, though residents have flagged complaints about inadequate consultation periods and the speed of the amendment process.

The zoning decision coincided with intensifying scrutiny of council spending patterns. On Wednesday, an independent audit revealed that Melbourne City Council's operating budget for the coming financial year will grow by 4.2 per cent to $834 million, with particular pressure on waste management and street maintenance programs across the CBD and inner suburbs including Fitzroy, Collingwood, and Docklands.

Key tensions have emerged around proposed rate increases, which will affect both residential and commercial properties. Business groups along Chapel Street in South Yarra and traders on Bridge Road in Richmond have expressed concern about the cumulative effect of rising council rates amid already-challenging trading conditions.

A separate motion regarding the restoration of the historic Princes Gate entrance to the Royal Park precinct narrowly passed the council chamber on Thursday, with a commitment of $2.3 million for heritage works. Local advocacy groups have campaigned for two years for the restoration project.

Meanwhile, negotiations continue between council and the state government over funding for the planned activation of the Abbotsford Convent precinct, with discussions expected to conclude by mid-July.

The council's planning decisions will be subject to a four-week public submission period, with final determinations expected in late July. Residents and affected stakeholders can lodge feedback through the Melbourne Planning Portal.

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