Council rows, density fights and a CFMEU standoff: Melbourne's week in city politics

Melbourne City Council voted 6-5 on Tuesday night to defer a contentious decision on increased building height allowances along the Swanston Street corridor, pushing any final determination past the August council recess and handing housing reform advocates their third procedural defeat in four months. The margin was tight, the chamber was packed, and the arguments were the same ones that have stalled Melbourne's densification agenda for the better part of two years.

The timing matters. The Allan government is applying visible pressure on councils to accelerate infill development under its Housing Statement targets, which require metropolitan Melbourne to absorb roughly 70 per cent of the state's projected 800,000 new dwellings by 2051. Every deferral at council level makes that arithmetic harder. The state's planning department has already placed Merri-bek and Bayside councils on notice over slow local housing scheme updates, and City of Melbourne is now watching its own record closely ahead of a ministerial review flagged for September.

In Footscray, the Maribyrnong City Council passed its 2026-27 budget on Wednesday with a 3.5 per cent rate rise — just above the state government's rate cap of 2.75 per cent, which requires a formal exemption process. The council cited $14.2 million in deferred maintenance across its parks and drains network as justification. Locals near the Maribyrnong River Trail, which council documents show has not received a resurfacing contract since 2021, will notice the difference if the works program proceeds on schedule from October.

CFMEU shadow hangs over inner-north construction sites

Construction activity in Brunswick and Fitzroy North slowed noticeably this week as subcontractors on three separate residential projects reported work stoppages linked to ongoing CFMEU industrial disputes. None of the sites — two on Lygon Street and one off Nicholson Street — are operating under formal enterprise agreements that have been finalised since the federal government's administration of the union began in 2024. Developers privately say the uncertainty is pushing financing timelines out by at least a quarter, which compounds the already elevated holding costs in the current interest rate environment.

The Victorian government has declined to step directly into the subcontractor disputes, pointing instead to the Fair Work Commission as the appropriate venue. That position is becoming harder to hold as project delays ripple into the council's own affordable housing pipeline. The City of Yarra's affordable housing contributions policy, adopted in December 2024, is supposed to deliver 76 social housing units across three inner-north sites by 2028, but two of those sites are among those experiencing stoppages.

What the budget season means for residents

Across the broader metropolitan area, July 1 marked the start of a new council financial year, and rate notices are already landing in letterboxes. Port Phillip residents face the steepest rise among inner-city councils at 4.1 per cent, adding roughly $95 to the median residential rates bill. Knox and Whitehorse are holding increases to 2.5 per cent, in line with a more conservative approach to discretionary spending after last year's state government audit of council financial sustainability.

The City of Melbourne's own draft budget, presented to the finance committee on June 26, includes $4.8 million for the continuation of the Greenline project along the Yarra's north bank — a program that has already attracted $225 million in combined state and federal funding since its announcement in 2022. Works between Birrarung Marr and the Footbridge near Olympic Park are expected to reach practical completion by mid-2027, though the council's own project risk register, tabled publicly last month, flagged procurement delays as a medium-level concern.

The next full council meeting is scheduled for July 22. The Swanston Street height decision, along with a fresh report on the Fishermans Bend urban renewal area, is expected back on the agenda. Planning advocates, including the Victorian Planning and Environmental Law Association, have formally requested that the deferral not extend beyond that date. Whether the numbers have shifted on council will be the question when the chamber fills again.