$21 million deficit | Whitsundays News | Local News in Whitsundays

WHITSUNDAY ratepayers can expect a hefty rate increase this year as the Whitsunday Regional Council tries to reduce its debt.

Mayor Mike Brunker and CEO John Finlay held a press conference on Tuesday announcing that the former Whitsunday Shire Council was in debt to the tune of $17 million externally and $16 million internally.

The Whitsunday Regional Council, formed by the amalgamation of the Bowen and Whitsunday Councils in March, will continue to operate with separate budgets for the next financial year. Cr Brunker said they had already slashed millions of dollars from the draft budget for 2008/09 but were still predicting an operating deficit for the Whitsundays of $21 million in the next financial year.

He said that in contrast, the budget for Bowen would be balanced.

The new budgets are not expected to be finalised for about another two weeks.

However, Cr Brunker predicted that general rates in the Whitsundays would rise by between 5 and 10 per cent. He could not confirm whether or not the same rate increase would apply in the former Bowen Shire.

It is expected the new budgets, still in draft form at this stage, will be adopted at the July 9 ordinary meeting of Council.

It was originally planned to adopt the budgets at yesterday's meeting but councillors and staff needed more time. Cr Brunker said it was a priority to keep everyone employed but that there would be "no stone unturned" to ensure the best result.

"We have to live within our means," he said. He said there needed to be a 3-5 year strategy to turn the situation around and that Council would be looking at all council businesses the airport, the caravan park, the quarry.

"All Council businesses will have a forensic check on them can we do this smarter, better and be more profitable?" he said.

He admitted there would be less infrastructure work done this year than was anticipated.

He said there was light at the end of the tunnel because the Whitsundays was continuing to have positive growth which meant increased revenue.

Mr Finlay, who was the former CEO of Bowen Shire, said the new Council was trying to separate the general, water and sewerage funds and that had not been done in the former Whitsunday Shire Council.

He said the general rate base for the Whitsundays was about $14 million and that about $12 million of that was spent on wages.

"Expenditure is more than revenue in the general fund," he said. "We need to reduce our dependency on future loan borrowings."

"We need to try to contain our operating expenditure."

As well as general rates, Council expects to receive about $3.8 million from water rates and $3.8 million from sewer rates in the 2008/2009 financial year.