Victorian Referendum on Local Council Powers Set for November: What Melbourne Voters Need to Know

Victoria is heading to a referendum in November on whether to restore local council autonomy after a decade of state government intervention in local government. The ballot will ask voters whether councils should have stronger protections against forced mergers and be able to set their own rates more freely. For Melbourne residents, the outcome will reshape how planning approvals work, what residents pay in council rates, and whether suburbs retain separate local representation.

The referendum stems from the Local Government Act changes of 2020, which gave the state government power to merge councils without voter consent. The state government merged nine councils into four across Melbourne's outer suburbs and imposed rate-capping legislation that limited how much councils could raise from property taxes. The changes were intended to reduce administrative costs and streamline services. But councils and local government advocates have argued for nearly six years that the caps have starved services and planning departments.

What Changes for Your Council and Your Rates

If the referendum passes, Melbourne residents would see the power to merge councils shift back to the local level. Currently, the state government can initiate a merger and proceed unless a majority of affected residents vote no in a poll. The proposed change would require state approval before any merger could proceed. For Greater Geelong, Glen Eira, and other councils affected by the 2020 mergers, this could eventually mean demerger options, though any actual split would still require separate processes.

The second major change relates to rate-capping. Under current rules, councils can only raise rates by a fixed percentage each year, set by the State Revenue Office. In 2024-25, that cap was 3.75 per cent. The referendum would restore councils' ability to set their own rates, provided they publish the decision publicly and consult residents. This does not mean rates will automatically rise. Instead, it means councils like Melbourne City Council, Moreland, and Darebin would have more flexibility to fund services like planning assessment, library hours, and road maintenance without seeking state permission first.

Evidence on Service Gaps and Planning Delays

Local Government Victoria has documented the impact of rate-capping. Between 2020 and 2024, councils reported staffing freezes and delayed hiring in planning departments. The City of Melbourne, for instance, reported in its 2023-24 budget papers that planning assessment times had stretched beyond statutory targets due to resource constraints tied to rate-cap limits. Planning delays directly affect new housing approvals, which matters in Melbourne's context of tight rental markets and density reform policy.

The Victorian Auditor-General's office noted in a 2023 report that rate-capping had constrained councils' ability to fund infrastructure maintenance and forward planning. Melbourne Water and councils jointly fund stormwater and drainage assets; rate-capping reduced councils' capacity to contribute. The Financial Management Association of Australia has argued that rate-capping limits councils' long-term financial planning, particularly as populations grow and ageing infrastructure requires replacement.

The referendum is scheduled for 22 November 2026, with early voting to begin in October. The Victorian Electoral Commission will provide a referendum guide to all households. Voters do not need to be enrolled in a particular council area to vote; any enrolled Victorian can vote. The government says the referendum will help clarify whether Victorians support local government autonomy or prefer the state-directed model established in 2020.

Councils across Melbourne are preparing voter information campaigns. Local government bodies argue restoration of rate-setting powers would allow them to fund service improvements without state approval. Residents interested in the details can find the full text of the proposed amendments through the Victorian Parliament website and council websites in their area.