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Page 1: Debt soars

APRIL 10 2011 Page 9ST

thesundaymail.com.au 9NEWSthesundaymail.com.au SPECIAL INVESTIGATION

Mergers under fireas rates, debt soar

Councils hitcredit limitsKelmeny Fraser

RATES have jumped by up to30 per cent since Queens-land’s controversial councilamalgamations, defying prom-ises of cost savings.

And debt has leapt to recordlevels, with struggling councilsapproaching their maximumcredit limit three years afterthe State Government pushedthrough its controversialcouncil reforms against wide-spread community opposition.

While some mayors saidbenefits had emerged, rate-payers have complained sky-rocketing rates and fees,mounting debt and staff blow-outs paint a different picture.

It comes amid a war ofwords over whether the BlighGovernment’s plans to dis-mantle the southeast’s waterdistribution system will capsteep water price rises.

Natural Resources MinisterStephen Robertson said estab-lishing the retailers had cost$80 million, and he did notbelieve it would be as expens-ive to dissemble.

But councils estimate scrap-ping the three retailers andreturning water to councilscould cost at least $300 mil-lion.

Councils have reached bor-rowing limits, with loan repay-ments expected to chew-upabout 30 per cent of theirrevenue. Council debt willhave tripled from $2 billion to$6 billion by June next year,hitting $8.5 billion by 2014.

Financial documents for adozen merged councils showthey have become mired indebt since the amalgamation,with an average debt percapita of $1153. Borrowings bythe 12 merged councils rosefrom about $880 million be-fore the amalgamations to$1.7 billion this financial year.

Townsville City Councilloans soared by more than$200 million since 2008 to$390 million – more than$2000 of debt per person.

Local Government Associ-ation of Queensland executivedirector Greg Hallam saidcouncils would soon be forcedto stop borrowing and rationspending as they grew close toreaching their credit limits. Heblamed population growth andthe need to upgrade infra-structure in areas neglected bycouncils over past decades fordriving up debt.

Council rates comparisonP10-11

Rising billsmean extrawork shifts

Doing it tough: Simmone Miszuk,with children Alek, 6, and Lily, 8, andmother Pauline has had to take onextra shifts to make ends meet.

RISING rates and fees have forcedSimmone Miszuk to take on extrashifts at work.

Both Simmone and husbandWalter work, but with two primaryschool-aged children, Mrs Miszuksaid she had been forced to take onan extra shift to make ends meet.

The couple, who live in Margatein the Moreton Bay RegionalCouncil area north of Brisbane, pay$1200 a month in mortgagerepayments, $300 a month onschool fees for Alek, 6, and Lily, 8,and $325 a quarter just on theirwater bills.

The Miszuk family had anannual rates bill of $1729 in2007-08. Their total bill for thisfinancial year, including water, willcome to $2651.60 – mostly drivenby increases in water and sewerage.

Mrs Miszuk said rising rates billshad added to the rising living costs,forcing her to ‘‘scrimp and scrape’’to afford the basics.

‘‘It is quite a lot extra you have tofind and we have had mortgageincreases as well,’’ she said.

‘‘We still want to do schoolholidays and have a lifestyle aswell, so to do that and pay all theextra rates I have had to pick up anextra day’s work.’’

Mrs Miszuk’s mother PaulineMcDonnell, 72, who also lives atMargate, is refusing to pay theincrease in sewerage and waterfees.

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GROWINGPAINS■ Rate rises of up to 30%since mergers

■ Water bills jumped up to40% in one year insoutheast

■ Council debt tripled in fouryears – to hit $6 billion by2012

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