How high are Port Phillip rates compared to neighbouring councils?
Spoiler Alert: Port Phillip council has significantly higher rates than neighbouring councils. Read below to understand why using average rates per property cannot be used to compare councils, and why more relevant metrics, such as unitising, reveal that a Council can be higher taxing.
Some groups in our community are claiming that rates in Port Phillip are lower than neighbouring councils. They like to use the following graph of “Average Rates Per Residential Property vs Councils” which positions Port Phillip City (CoPP) fairly low on the scale.
However, have they used the correct units on the Y scale and is this misleading information when comparing average rates against other Councils?
So, let’s fact check that. It is important that you have the facts. The numbers below are our own analysis based on 2019-20 Council budgets which are available in the public domain.
Firstly, let’s look at how much council collects in income. In 2019-20, Port Phillip collected $129 million in Rates & Charges, and $95 million in other charges such as fees, fines and grants, that’s much higher than neighbouring councils (See bar chart below: 2019-20 Total Income).
So, what is the reason for this? There are a few reasons why Port Phillip might need to collect higher rates, let’s look at each:
- Coverage area & length of local roads
- Population
- Total number of properties
1. Coverage area
The larger a municipality is, the more money needs to be spent on maintaining roads, footpaths, parks, streetlights, stormwater pipes etc. Does this explain the high rates?
|
Port Phillip |
Bayside |
Glen Eira |
Stonnington |
|
|
Coverage area (square km) |
20.7 |
37.2 |
38.7 |
25.7 |
|
Rates ($mil) / km2 |
$6.24 |
$2.63 |
$2.95 |
$4.48 |
|
Length of local roads (km) |
215 |
355 |
433 |
261 |
|
Rates ($K)/ km |
$602 |
$276 |
$264 |
$442 |
No, it doesn’t. Port Phillip has the smallest area and the shortest length of roads, but the highest rates. Port Phillip spends more than double some neighbouring councils based on these metrics.
2. Population
Council services are most fairly compared based on population. This is because council provides services like libraries, parks, activity centres, childcare, customer service centres, parking permits etc. based on how many people they need to service. Does this explain the high rates?
|
Port Phillip |
Bayside |
Glen Eira |
Stonnington |
|
|
Population |
110,634 |
104,274 |
151,439 |
113,737 |
No, it doesn’t. Port Phillip has higher rates & charges per resident than neighbouring councils, and there is an interesting reason for that. City of Port Phillip employ more staff than neighbouring councils and pay their staff more than neighbouring councils. The cost to ratepayers was in that year, almost $100 million:
|
Port Phillip |
Bayside |
Glen Eira |
Stonnington |
|
|
Staff numbers (FTE) |
883 |
440 |
860 |
642 |
|
Average staff cost |
$109,442 |
$106,619 |
$94,477 |
$104,850 |
|
Total staff cost |
$96.6 million |
$46.9 million |
$81.3 million |
$67.3 million |
Each resident in the City of Port Phillip pays $873 for council staff costs, whereas for the other three councils, the cost ranges from $450-592. See figure above.
The City of Port Phillip say that because they choose to provide services that others may not. And yes, one may agree to an extent.
Port Phillip state that the extra staff they employ are for council-run childcare centres, parking enforcement, for street / beach cleaning, and for teams to run South Melbourne Market and major festivals like St Kilda Festival. But even when these additional staff costs are removed, Port Phillip remains the most expensive council compared to its neighbours.
3. Total number of properties
For a minority of services, like collecting rubbish, the number of properties does influence cost. But in the City of Port Phillip, waste management only accounts for 5.3% of the total spend, according to the Essential Services Commission.
Some groups interested in keeping rates high, have claimed that average rates per property should be used to compare the rates charged by different councils. Let’s look at why that is not a valid way to compare rates (and why those groups use this metric to not properly inform the public):
Reason 1 – Port Phillip has a higher number of residential properties
We know that most services council provides depend on the number of people they provide services to and the infrastructure they service (see sections above).
Using the average to compare rates between councils is fundamentally flawed.
Average residential rates are calculated using two elements:
- Total $ amount of residential rates charged
divided by - Number of residential properties.
So right away, we can see that a council with a higher number of residential properties will result in a lower average.
Port Phillip has a high number of residential properties. Or alternatively, you could say that there are less residents per property as shown in the diagram below labelled:
“2019-20 Budget: Average number of residents per residential property”.
Whether residents live in large properties together, or in small properties alone, this doesn’t change the total amount of rates being charged by a council; it only changes the average rates per property.
Average residents per residential property is used here to show that average rates per property is not a good metric. Average residents per property by itself is not meaningful. That’s why average rates per property is a poor measure of whether council rates are comparatively high or low. The fact is, that given we have so many residential properties in a small area, rates should be a whole lot lower.
What then, is a fairer way to compare rates?
Simple: on a unitised basis i.e. per population
Two examples of unitised data (data per resident) are
- The chart above labelled: “2019-20 Budget Total residential rates and chargers per resident”
- The chart below labelled “Total Council expenditure per resident 2019-20 budget”
By unitising the data according to population size, both charts show CoPP has higher rates and chargers and expenditure per resident, whereas the average rates per residential property ignores the variables of different sized properties, different property values and different numbers of residents per property. By ignoring these variables, it means that the average rates per property is not a relevant metric when comparing councils.
Reason 2 – Not all properties are the same.
We have a progressive rates system whereby the level of rates you pay is proportional to your property value. While there are many small apartments paying rates like neighbouring councils, the brunt of high rates is borne by those with higher property values, many of whom may not have the propensity to pay (the value of your property does not always indicate your income).
As stated earlier, the average residents per property by itself is meaningless. It is used here to show the statistical positive skew (see diagram below) and how averages work. The reason average rates in Port Phillip are the same, or even slightly lower than, neighbouring councils, is because of the positive skew in property values.
Port Phillip has many apartments which are lower in value than the median (middlemost) property value. The diagram below is an example of a positive skew. This results in a statistical deception – the average (mean) rates per property does not reflect why rates are so expensive overall, especially for many ratepayers in Port Phillip.
As stated above, average rates per property ignores the variables of different sized properties, different property values and different numbers of residents per property. By ignoring these variables, it means that the average rates per property is not a relevant metric when comparing councils.
Conclusion
Port Phillip council has significantly higher rates than neighbouring councils based on all relevant metrics except average rates per residential property, which is not useful in making comparisons between councils. Groups with vested interests will try to convince you that there is no problem with Port Phillip council rates – and try to wave the graph of “Average Rates Per Residential Property vs Councils” to support their claims. Hopefully this response explains why one shouldn’t believe such claims.
Four years later, since 2019-20, the population of CoPP has decreased from 110,624 to around 104,000 in 2024; and the total rates and charges have increased. So, it is very likely that the unitised costs have increased for our Council total rates and charges costs per resident and total expenditure costs per resident, even if slightly offset by the introduction of the waste charge. See NOTE below. The above still holds true and averages per residential property are not suitable.
The above analysis of financial metrics clearly shows that average rates data is false and misleading. Instead, rates data should be unitised for population differences.
For the 2023-24 financial year, Port Phillip rates and charges continue to be much higher compared to Stonnington, Bayside and Glen Eira for a property of the same value.
For example, the rates and charges for a house priced at $1.9M in Port Phillip are $3,483 which is $1,150 more than Stonnington, $1,000 more than Bayside and $580 more than Glen Eira. See https://ropp.org.au/property-rates-calculator-copy-2324/
In the above example, the State Government valuation of a property is used to show the rates and charges for property of that value in CoPP which is factual, along with being higher than the neighbouring properties. Average rates per property will not provide this detail.
For the latest Property rates calculator 2025-26, visit
Property rates calculator 2025-26 – Residents of Port Phillip
Disclaimer:
All figures stated in this article are taken from the 2019-20 council budgets. Rates & Charges quoted include the fixed per property charges that almost all councils charge (75 of the 79 Victorian councils charge for waste services on a per property basis).
NOTE: In 2022-23, City of Port Phillip followed suit, with separated waste charges from rates revenue charges.
Sources:
https://www.propertyandlandtitles.vic.gov.au/valuation/council-valuations
http://www.portphillip.vic.gov.au/ICP_2017-27_COUNCIL%20PLAN_year%203_Complete.pdf
https://www.gleneira.vic.gov.au/media/4649/2019-20-annual-budget.pdf
https://haveyoursay.portphillip.vic.gov.au/budget-20202021/online-budget-session-4-may
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