Rate Rises & Rate Arrears: What the RBA's Decision Means for Local Government
Australia's cash rate reached 4.10% in March 2026, with CPI climbing back toward 4%, driven by housing costs up 6.8%, electricity up 32.2%, and an oil shock pushing Brent crude to $103/barrel. For local governments, this isn't just a macroeconomic headline - it's a direct threat to revenue, community wellbeing, and financial sustainability.
Councils are already feeling the pressure: rates arrears are rising, inbound hardship calls are increasing, and ratepayers are deprioritising council bills over other expenses. Victorian guidelines now mandate flexible payment plans, lower hardship thresholds, and no penalty interest - with other states expected to follow within 12-18 months.
This executive summary, prepared by Payble Chief Economist Dailius Wilson, outlines the economic forces at play, what they mean for the LGA sector long-term, and how councils using Payble have achieved dramatic arrears reductions with an average ratepayer satisfaction rating of 4.66 out of 5 - live within 6-12 weeks.
What this means for Local Goverment
A wave of inflation is inevitable
In the next 4-6 months, our Chief Economist is predicting a 1%-1.25% increase in rates.
Ratepayer pressure is only going to grow
Ratepayers are already asking for more time to pay, and that volume is only going to continue to increase with stagflation on the horizon resulting in higher council arrears.
Early action is paying off
Councils that use Payble have changed their arrears levels, with a 4.66 out of 5 satisfaction rating - allowing ratepayers to suggest what they can afford.
