Four Economic Pressures Behind Council Rates Arrears
Australians now owe their councils $2.4 billion in unpaid rates, and four separate economic pressures, rising interest rates, ending fuel relief, oil prices and falling house prices, are converging to push that arrears figure higher over the next 12 months. This economic brief sets out what is driving the pressure, and what your council can do before it lands on rates teams.
Nationally, 8.3% of all rates now go unpaid, a share that is growing faster than the rates being charged. Victoria remains the biggest single exposure at $918 million owing, but every state and territory is now feeling some version of the same squeeze.
Inside this brief: the four economic pressures driving arrears higher, the four practical moves councils are using to get ahead of it (including how Whitehorse City Council and the City of Greater Dandenong did it), and what happens if councils wait.
How we put this together
This brief draws on Payble's national arrears analysis of 507 councils' 2024/25 financial statements, cross-referenced against RBA cash rate forecasts, fuel excise relief costings, oil price movements and residential property data. It was prepared to accompany Payble's National Arrears Report webinar, held 14 July 2026.
4.85% forecast cash rate by September 2026
Further interest rate rises will leave less of every household's income available for rates, at the same time as the $4 billion fuel excise relief scheme is due to end.
8.3% of all rates go unpaid nationally
Roughly double what most states consider a healthy benchmark, and rising faster than the rates councils charge each year.
Four moves that are already working
From bill smoothing to letting ratepayers suggest what they can afford, Whitehorse City Council and the City of Greater Dandenong are both holding arrears below their state averages.
Learn from experts
This brief was prepared by Lee-Roy Chitambira, Marketing & Growth Lead at Payble, drawing on analysis and commentary from Dailius Wilson, Chief Revenue Officer and Chief Economist at Payble. For the full state-by-state rankings and case studies, read the National Arrears Report.
