President Brian Kelson said the Essential Service Commission's decision to allow a 4.5 per cent increase over two years would "impact every ratepayer in Warrnambool".

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"It's simply not fair," he said.

"The Warrnambool City Council's inability to work within a budget has now impacted on all ratepayers."

He said the council had "shown no restraint in their spending and had pushed ahead with upgrades to roundabouts, new entrance signage, toilet blocks, a $75,000 contribution to Sharp Airlines and increasing staff numbers".

"It's crazy," he said.

"It has to stop. They don't understand what is going on.

"Almost 95 per cent of people said they didn't want the rate rise and couldn't afford it.

"People are trying to work out if they pay for their medication or their rates.

"Every little impost adds extra pressure."

Mr Kelson said he was bitterly disappointed with the outcome.

"I can't understand how the ESC could have the audacity to allow this to happen," he said.

"We believe that council has not developed and applied rigorous and consistent internal policies, plans and processes to ensure efficiency and value for money. The council-stated efficiencies have a relatively minor impact on the budget and are not part of an overarching long-term service/financial plan.

"Proper efficiencies and value for money come from robust and rigorous long-term financial planning. WCC have failed to demonstrate that it has undertaken that planning."

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