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APRIL 10 2011 Page 9 ST thesundaymail.com.au 9 NEWS thesundaymail.com.au SPECIAL INVESTIGATION Mergers under fire as rates, debt soar Councils hit credit limits Kelmeny Fraser RATES have jumped by up to 30 per cent since Queens- land’s controversial council amalgamations, defying prom- ises of cost savings. And debt has leapt to record levels, with struggling councils approaching their maximum credit limit three years after the State Government pushed through its controversial council reforms against wide- spread community opposition. While some mayors said benefits 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 of words over whether the Bligh Government’s plans to dis- mantle the southeast’s water distribution system will cap steep water price rises. Natural Resources Minister Stephen Robertson said estab- lishing the retailers had cost $80 million, and he did not believe it would be as expens- ive to dissemble. But councils estimate scrap- ping the three retailers and returning water to councils could cost at least $300 mil- lion. Councils have reached bor- rowing limits, with loan repay- ments expected to chew-up about 30 per cent of their revenue. Council debt will have tripled from $2 billion to $6 billion by June next year, hitting $8.5 billion by 2014. Financial documents for a dozen merged councils show they have become mired in debt since the amalgamation, with an average debt per capita of $1153. Borrowings by the 12 merged councils rose from about $880 million be- fore the amalgamations to $1.7 billion this financial year. Townsville City Council loans soared by more than $200 million since 2008 to $390 million – more than $2000 of debt per person. Local Government Associ- ation of Queensland executive director Greg Hallam said councils would soon be forced to stop borrowing and ration spending as they grew close to reaching their credit limits. He blamed population growth and the need to upgrade infra- structure in areas neglected by councils over past decades for driving up debt. Council rates comparison P10-11 Rising bills mean extra work shifts Doing it tough: Simmone Miszuk, with children Alek, 6, and Lily, 8, and mother Pauline has had to take on extra shifts to make ends meet. RISING rates and fees have forced Simmone Miszuk to take on extra shifts at work. Both Simmone and husband Walter work, but with two primary school-aged children, Mrs Miszuk said she had been forced to take on an extra shift to make ends meet. The couple, who live in Margate in the Moreton Bay Regional Council area north of Brisbane, pay $1200 a month in mortgage repayments, $300 a month on school fees for Alek, 6, and Lily, 8, and $325 a quarter just on their water bills. The Miszuk family had an annual rates bill of $1729 in 2007-08. Their total bill for this financial year, including water, will come to $2651.60 – mostly driven by increases in water and sewerage. Mrs Miszuk said rising rates bills had added to the rising living costs, forcing her to ‘‘scrimp and scrape’’ to afford the basics. ‘‘It is quite a lot extra you have to find and we have had mortgage increases as well,’’ she said. ‘‘We still want to do school holidays and have a lifestyle as well, so to do that and pay all the extra rates I have had to pick up an extra day’s work.’’ Mrs Miszuk’s mother Pauline McDonnell, 72, who also lives at Margate, is refusing to pay the increase in sewerage and water fees. 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An extra $20 per passenger will apply for domestic bookings and $45 extra per passenger for international bookings through telephone 131 538. Flights depart Brisbane airport. *For travel from 16 May to 16 June, 12 July to 14 September and 4 October to 14 December 2011. #For travel from 16 May to 20 June, 26 July to 14 September and 18 October to 14 December 2011. †For travel from 2 August to 14 September and 18 October to 8 December 2011. Fares are one-way and non-refundable. Limited changes are permitted, charges apply. Availability is limited (not available on all flights or days). Limited availability on public holiday weekends. ^Carry-on baggage limits, including size restrictions, will be strictly applied. Passengers with more than the applicable carry-on baggage allowance will need to check in baggage, and charges will apply. See jetstar.com for more details. Before you book your international flight, and before you travel, check current Australian Government travel advisories on www.smartraveller.gov.au. Jetstar Airways Pty Ltd – ABN: 33 069 720 243 JET4349/B10 GROWING PAINS ■ Rate rises of up to 30% since mergers ■ Water bills jumped up to 40% in one year in southeast ■ Council debt tripled in four years – to hit $6 billion by 2012
