Australia's $2.4 Billion Rates Crisis: Council Arrears Study
Australia enters 2026 with local government finances under the heaviest strain in more than a decade. Across 507 councils, unpaid rates now total $2.4 billion, an increase of roughly $210 million, or 9.6%, in a single year. Over the same period rates revenue grew just 6.2%, which means arrears are now rising materially faster than the revenue base itself.
Drawing on publicly available 2024/25 financial data, this national study ranks councils on their arrears, breaks the crisis down state by state, and puts a real dollar figure on what unpaid rates cost communities: roughly three major hospitals, 160 primary schools, or 30 regional aquatic centres.
Inside you will find the full national rankings, a state-by-state breakdown, the regulatory reforms reshaping how councils collect, two case studies of councils that reversed their trajectory, and the proven strategies that reduce arrears growth.
How we put this together
This report uses publicly available financial data for the 2024/25 financial year, drawn mainly from councils' published financial statements and annual reports. For each of the 507 councils we recorded total rates revenue and outstanding rates for both 2024/25 and the prior year, then derived three measures: the arrears rate, the dollar value outstanding, and the year-on-year change. No figures were estimated or modelled.
The study spans all six states and the Northern Territory, and is supported by a survey of more than 160 local government practitioners conducted ahead of the ALGA National General Assembly. Population and property data are drawn from the ABS, the Queensland Government Statistician's Office, SQM Research, Ray White and CoreLogic.
$2.4 billion in unpaid rates
National council arrears grew by roughly $210 million, or 9.6%, in a single year, and are on track to approach $2.6 billion within twelve months.
Arrears are outpacing revenue
Rates revenue rose just 6.2% while arrears grew 9.6%. The share of all rates going unpaid now sits at 8.3% nationally, and it is climbing rather than holding steady.
9.08% at Whitehorse, against an 11%+ state average
By auto-approving payment plans, Whitehorse City Council improved its arrears position while the rest of Victoria declined, and recorded a resident satisfaction score of 4.63 out of 5.
Learn from experts
This study was prepared by Dailius Wilson, Chief Revenue Officer and Chief Economist at Payble, who has tracked council arrears across Australia for five years. The research was compiled by Payble's in-house research team and presented at the ALGA National General Assembly.
The case studies feature Whitehorse City Council and the City of Greater Dandenong, two Victorian councils that improved their arrears position while the rest of the state declined. Explore more council payment resources at payble.com.au/resources.
