THE financial strain on Queensland households is reigniting calls for rate capping – a policy used in other states to limit annual increases to council rates.
But local government leaders warn that without a broader funding overhaul, rate capping could make a bad situation worse.
With households under pressure from mortgages, grocery bills and insurance premiums, the rising costs have renewed debate about whether Queensland should follow NSW and Victoria in introducing rate capping.
Brisbane City Council says it already has measures in place to soften the impact of State Government land valuations on rates.
It uses an average of the past three valuations and caps annual increases at 7.5 per cent for owner-occupiers.
In Redlands, where rates and charges rose 10.68 per cent in 2025-26, Councillor Rowanne McKenzie said capping rates without addressing structural issues would only worsen the crisis.
“If the State and Federal Governments want to start adequately funding local governments to deliver all the services we’re expected to, then they can consider rate capping,” Cr McKenzie said.
She said councils were being asked to do more with less, as state and federal contributions stagnate and local options remain limited.
Redlands had accrued more than $218 million in accumulated losses over 20 years by keeping rates low despite rising costs.
“These ongoing losses are not sustainable,” she said.
Redlands also has a limited commercial rate base, with about 90 per cent of rate revenue coming from residential ratepayers – including many on islands that are more expensive to service.
Cr McKenzie said declining state waste levy rebates, outdated federal Financial Assistance Grants, and broader cost-shifting from other levels of government were pushing councils to the brink.
Deputy Mayor Julie Talty also rejected rate capping, pointing to caps on infrastructure charges for new developments.
“One of the biggest pressures council faces is the cap on infrastructure charges for new developments,” she said.
She said the charge was cut from about $58,000 to $28,000 per lot.
“Current infrastructure costs now range from $60,000 to $110,000 per lot, meaning councils are left to cover shortfalls of $30,000 to $50,000 each time a new home is built,” she said.
“No developer dropped their prices to match that change – the market set the price of new homes, not the infrastructure charge.”
Cr Jason Colley agreed rate capping was not the solution.
“There is no doubt this year’s budget was a tough one to stomach,” he said.
“I have no doubt we’ve been left to clean up the mess from previous iterations of Council, going back as far as 20 years – but the buck stops with us now.”
Cr Peter Mitchell warned that rate capping “would only drive Queensland councils into an unrecoverable debt spiral”.
“To ease cost of living, Council’s only sustainable tool is to reduce services – but this is neither fair nor what our community expects,” he said.
Council Watch President Dean Hurlston disagreed.
“Rate capping is the only mechanism that can save the self-indulgent, bloated Queensland council bureaucracy,” he said.
“It is the most blunt instrument that ratepayers can demand to ensure highly paid council executives actually reduce costs and find more efficient ways of running council business.”
