The state government-approved rate increase of 5.55 per cent will not be charged in 2020-21 due to the high levels of external funding received for bushfire recovery efforts with the Upper Murray one of the hardest hit areas in the state.

Following the introduction of rate-capping in Victoria, Towong, due to its low rate base, successfully applied for a higher rate take of 5.55 per cent from 2017-18 to 2020-21 financial years.

Towong becomes the second North-East council to decide on a zero rate rise with Wodonga also making the call based on hardship associated with COIVD-19.

"Council recognises the impact the bushfires and COVID-19 are having on communities and is trying to avoid putting our ratepayers under further pressure by working hard to keep rate increases to a minimum," Towong mayor David Wortmann said.

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The council has budgeted for a capital works program of $12.1 million including the Colac Colac and Tallangatta caravan parks, Bullioh netball court upgrade and streetscape improvement works in Corryong, Dartmouth and Mitta.

The budget also funding for the newly created bushfire relief and recovery directorate and $6 million worth of carryover works from 2019-20 which were halted due to bushfires and COVID-19.

Other council charges including rubbish will remain at 2019-20 levels, but there is every likelihood it will need to apply for another rate cap extension to remain sustainable long-term.

Cr Jennie Star questioned whether any further state government support for bushfire recovery was expected and chief executive Juliana Phelps said additional funding was needed to support work in that area.

"We set up a recovery team and it is very hard to retain staff if they don't have any security beyond the first 12 months," Ms Phelps said.

"I guess the ball is in our court as far as putting a proposal back to government.

"I am confident there will be more funding, but at what level is the uncertain bit."