Sophie Foster
Updated 20 Apr 2026, 10:44pm
First published 20 Apr 2026, 10:19pm
Aussie councils are facing a budget squeeze - with one flagging diesel charges doubling just as ratepayers take a $1m hit off loss of government funding.
Local government administrations across the country are bracing for difficult decisions as they tighten spending and review budgets, raising concerns about the impact on households - and while no rate rises have been announced, councils warn rising costs and funding cuts mean every dollar is now under review.
All costs are now under careful review as councils look to balance their books as funding sources take a hit. Source: Mackay Regional Council.
Mackay Regional Council Mayor Greg Williamson said the scale of cost pressures meant councils could no longer absorb the blow alone.
“In just diesel alone, our costs have doubled to $4 million. These kinds of cost increases are not something councils can fully absorb,” he said.
Mackay Regional Council Mayor Greg Williamson. Picture: Michaela Harlow
He said changes to government funding - including waste levy arrangements and the end of a major federal infrastructure program - were compounding the pressure.
“For the Mackay Regional Council, that’s a loss of $1 million in funding that our ratepayers now have to cover,” he said.
“Like every business and council in Australia, we are looking at significant cost increases.”
Mr Williamson said councils were now undertaking weekly budget reviews as global pressures, including volatility linked to the war in Iran, drive uncertainty.
“We are having weekly budget balancing exercises to respond to the changing global conditions,” he said.
He warned councils would be forced to prioritise essential services such as roads, water, sewerage and waste, with discretionary spending under scrutiny.
“Rising fuel costs impact everything that we do and council will have to make tough decisions about what we can sustainably provide for the community,” he said.
This as the Local Government Association of Queensland, which represents 77 councils, urged the Federal Government to maintain vital infrastructure funding in its upcoming May budget.
Mayor Greg Williamson said like every business and council in Australia, Mackay was looking at significant cost increases.
President Matt Burnett warned smaller communities would be hardest hit if support was not extended when a vital program ends on June 30.
“This program has been used to build roads, sporting grounds and other vital community facilities, and it’s our smallest communities who stand to lose most,” he said.
Mayors across Queensland echoed the concern, warning that without continued funding, councils would struggle to maintain infrastructure and keep pace with growing communities.
Ipswich Mayor Teresa Harding said councils were already stretched.
“Without a replacement for this vital program … our resources will continue to be stretched to unsustainable levels,” she said.
Western Downs Mayor Andrew Smith said the loss of funding threatened critical local projects, while Mareeba Mayor Angela Toppin said councils relied on the program for essential upgrades.
In remote areas, the stakes were even higher, with Longreach Mayor Tony Rayner warning communities could face stalled projects and declining infrastructure without continued investment.
“This isn’t just about roads and facilities - it’s about sustaining our communities,” he said.
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