Independent review raises questions about transparency and reliability of MPSC’s 10 Year Plan
Mornington Peninsula Shire Council says it has dramatically improved its long-term financial position, shifting a projected ten-year deficit from $296 million to just $3 million. But an independent review sought by STPL News has found the improvement relies on assumption changes, unconfirmed asset sales and optimistic forecasts, rather than clear evidence of financial recovery.
The review examined the Council’s Financial Plan 2025–2026 to 2035–2036, along with public statements surrounding it. The findings show the turnaround is a projection, not an achieved result.
Modelling, not money, drives the improvement
The Plan compares two different sets of assumptions:
- A “do nothing” scenario forecasting a –$296 million deficit
- A revised scenario forecasting a –$3 million deficit
The independent accountant noted this is a modelled outcome, not a reflection of actual financial performance.
They also pointed out that long-term financial plans are not binding budgets, and changes to assumptions can significantly alter results.
Savings claims lack detail
The Plan incorporates $7.2 million in earlier savings and a further $10 million in new, ongoing savings for 2025–2026. These savings play a major role in improving the forecast.
However, the review found the Plan does not explain where these savings come from or how they will continue over the decade.
The accountant wrote:
“Any savings are not clearly explained. Comparison needs to be made to previous Financial Plans.”
Treating the $10 million as “recurrent” suggests the Shire will save around $100 million over ten years, yet no supporting information is provided.
$32 million in asset sales with no assets identified
A key assumption is that Council will raise $32 million by selling assets between 2026 and 2034.
The Plan does not identify which assets could be sold.
It instead states that an “asset utilisation analysis” will need to be completed in future. This means the projected revenue depends on decisions that have not yet been made, and outcomes that may not be achievable.
The independent review found this creates uncertainty for the long-term forecast.
Higher fees and strong demand assumed
The Plan assumes:
- A one-off fee increase above CPI in 2025–2026
- Fees rising at CPI + 1 per cent each year
- Stable or growing demand for services despite higher prices
The adviser noted the Plan does not test how fee revenue would change if demand drops or if households reduce their use of paid council services.
Major financial risks left out of the projections
The Plan does not include several significant risks faced by Victorian councils, including:
- Possible waste-charge reforms that may reduce Council revenue
- A potential defined-benefit superannuation call
- Market and construction cost volatility
- Cost shifting from other levels of government
The accountant noted that these risks could significantly change the Shire’s financial position if they eventuate.
Service expectations do not match the rate cap environment
The Plan says the Shire will continue to deliver core services and respond to growing demand.
At the same time, it acknowledges that the state rate cap will constrain revenue growth.
The adviser found this contradictory:
“Service expectations and revenue constraints do not align.”
Employee costs are forecast to grow below CPI, despite rising wage costs.
Materials and services are also modelled to grow only at CPI, which the review found optimistic given current market trends.
Public messaging presents a simplified version of the plan
The Council’s messaging promotes the forecast as evidence of strong financial management.
The review cautioned that public statements have not clearly explained the assumptions behind the projection or the risks that remain unaccounted for.
This, the adviser said, may give residents the impression of an achieved financial improvement that has not yet occurred.
Community input numbers need context
The Plan states that more than 3,500 people contributed feedback during its development.
However, Council records show that 262 of those contributions were postcards completed by primary school children.
The adviser noted that including these within the overall engagement figure may make participation appear broader than it was.
They said separating child engagement from formal submissions would provide clearer transparency.
Financial outlook depends on all assumptions holding
The Plan forecasts a positive cash position of $67.2 million by 2035, compared with $3 million in earlier modelling.
This depends on:
- Savings being fully achieved
- Asset sales going ahead
- Fee increases delivering expected income
- Costs staying within CPI
- No major external financial shocks
The independent adviser said earlier financial plans may have used more conservative assumptions, while the new Plan “paints a prettier picture”.
“The numbers look good because the assumptions were changed,” they said.
Further disclosure needed
The review suggests Council could improve transparency by releasing:
- A full breakdown of the $10 million in recurrent savings
- A list of assets under consideration for sale
- Modelling that includes potential superannuation and waste-charge impacts
- An explanation for static financial asset values over several years
- A comparison with assumptions used in earlier long-term plans
Until these details are provided, the Shire’s projected financial turnaround remains a best-case scenario, not a confirmed financial recovery.
Overall assessment: confusing, contradictory and optimistic
After reviewing the full 10-year document, the accounting firm concluded the plan is “confusing and riddled with contradictions.”
They noted the modelling appears designed to make future outcomes look more favourable, despite there being no clear evidence, detailed savings breakdown or identified asset sales to support the improved projections.
The forecast depends on best-case assumptions, and that several parts of the plan “lack grounding in reality” when compared with typical cost pressures facing Victorian councils.
