“It’s time we started making the big decisions”: South Gippsland council debates whether to begin selling 400 buildings to solve financial woes

A vacant building in Foster has become the first test case for how South Gippsland will tackle its "eye-watering" infrastructure funding gap with councillors split on whether to sell or maintain council assets.

What happened: Councillors were divided at a South Gippsland Shire council meeting on December 10, debating whether to sell or lease vacant council-owned properties in Foster. 

Initially, council staff had recommended selling its Foster properties at 4-6 Power Street as well as part of 5 Simpson Street. 

However, councillor Scott Rae brought an amended motion to look at the cost of repairing and then leasing the property first, kicking off a debate over the council’s property management strategy.

What do council staff think?

A report put forward by council staff recommended starting the process to sell the land, giving the community time to provide submissions and feedback before finalising a sale.

• South Gippsland Shire is facing a significant shortfall in its 10-year asset management plan, with more than 400 buildings to maintain.

Why should the council lease the property?

Rae told the council chamber exploring the commercial leasing of the properties first would be better financial management, saying: "[If] you sell everything, one day you'll have nothing left to sell".

Rae’s alternate motion requested council staff put together a report into the cost of repairing the buildings to a standard where a tenant could be sought. The report would also investigate the possible income from leasing the land.

• When queried about income from the property, South Gippsland Shire CEO Allison Jones said she wouldn’t be able to say how much the council could make “without understanding the investment council is able to put into the building to get it [up to] standard”.

South Gippsland Shire mayor Nathan Hersey argued the council needed to look into leasing council properties as an alternate way of generating income.

Why should the council sell the property?

Councillor Sarah Gilligan said leasing the property contradicted the council's sustainable building and asset management plan.

• Gilligan described the financial hole the council has in its 10-year asset management plan as “eye watering”, saying: “We are trying to find a way to reach that balance of what is really optimal across the whole shire and what is manageable within our resources.”

Councillor John Schelling said “the building has already been sitting idle for a number of years now” and noted the previous owners had tried to find a tenant and failed.

• “It’s time we started making the big decisions,” Schelling said. “We need to put it on the market to relieve our budget. We can’t just keep hanging on to something and trying to make something out of it.”

Mayor’s casting vote breaks the tie

The vote was split 4-4 before mayor Hersey used his casting vote to carry the alternate motion which will lead to council staff looking into the profitability of leasing the Foster properties.

Council staff will report back by April 2026 on the viability of leasing the property.