The council earlier this week revealed it planned to lift rates by two per cent, the maximum allowed under the state government's cap.

The two per cent comes after the council last year lifted rates by 4.25 per cent having received permission from the Essential Services Commission. The council had also received the green light to lift rates by 4.25 per cent next financial but it has instead opted for two per cent.

The council argued it needed the higher lift last year to tackle an asset renewal backlog.

But this week's disclosure comes at a terrible time with the impacts of COVID-19 restrictions hitting businesses and livelihoods hard.

The region's charities are handing out food parcels in record numbers.

The council was pillared for the 4.25 per cent rise this year, alongside a raft of increases in fees, including pet registrations. Some, including pet registration fees, are earmarked to jump again.

City officials are between a rock and a hard place. They need to provide services, upgrade ageing facilities and provide a stimulus after we emerge from COVID-19 social restrictions. But to do that, the council needs revenue.

State treasurer Tim Pallas believes councils shouldn't hit ratepayers.

"We are advocating councils look at their balance sheets to see what they can do," Mr Pallas said. "Anyone who thinks the way of managing their way out of this is to try and balance budgets will cause hardships right across their communities."

Neighbouring Moyne and Corangamite shires are planning to keep rates at this year's level with no increase planned. Why can't the city? Is it looking at tightening its belt? The council committed to an organisational review in July last year after the contentious debate around the 4.25 per cent rise. So what's happened with that? Has anything changed? The council needs to heed Mr Pallas' advice.