Everyday budgets shrink as local services struggle to keep up

When Fe and Eddie Monteiu used to meet friends for their weekly coffee in Monto, it wasn't just about the flat whites and lamingtons. It was their weekly ritual, a chance to catch up and feel connected to their small Queensland community.

Now, with council rates jumping 25 per cent and cost of living pressures mounting from every direction, that simple pleasure has become a monthly luxury they carefully budget for.

The Monteius aren't alone. Across Australia, seniors are finding themselves caught in an unprecedented financial squeeze between skyrocketing council rates and everyday expenses that seem to climb every week.

The pension boost that isn't enough

Recent pension increases might seem like good news—the Age Pension rose by $29.70 per fortnight for singles and $22.40 each for couples from September 2025. For a single pensioner, that's an extra $773 per year.

But when you're facing an $800 annual rates increase like the Monteius, that pension boost barely covers the council bill, let alone other rising costs.

The situation is even more complex for the 470,000 part-rate pensioners. Many will find their pension increase offset by changes to deeming rates, which rose by 0.5 per cent for the first time in four years.

Some will receive an overall increase and others an overall decrease, depending on their asset levels, homeownership status, and employment income.

It's not just Queensland—the crisis is nationwide

The North Burnett's 25 per cent rate hike might be Queensland's steepest, but don't mistake this for a regional problem.

The peak body for local government has acknowledged a financial sustainability crisis that is threatening the viability of the sector, and it's happening across the country.

Monica Krueger discovered this firsthand when she moved to Macleay Island in Queensland's Moreton Bay four years ago, drawn by the promise of lower rates. Her quarterly rates have jumped from $550 to $780 since 2021—a 42 per cent increase that's forced this retiree to consider returning to work.

'We didn't plan for that kind of rate rise,' she says, echoing the sentiments of countless seniors who thought they'd factored in all their retirement costs.

The services seniors rely on are at risk

When councils tighten their belts, it's often the community services that seniors depend on most that get the axe first.

Bundaberg Council's approach offers a telling example—before passing on a 6.49 per cent rate rise, they sold surplus land, offered redundancies, and crucially, reduced non-essential services including aged care, childcare and social housing.

As councils struggle financially, they've had to deal with the state government freezing developer fees they can charge and taking over assets like caravan parks that were significant income streams.

Mayor Helen Blackburn captures the dilemma perfectly: 'The difficulty is that the more we do, the less those other levels of government will do.'

Why the funding model is broken

Here's the thing that might surprise you: councils across Australia get just three cents of every tax dollar we pay.

The federal government takes about 80 cents, states get 17 cents, and local councils—who manage everything from your rubbish collection to the local library where you might attend that book club—get the remaining three cents.

This funding model hasn't changed since 1974, when councils' responsibilities were vastly different. Back then, they handled 'roads, rates and rubbish.'

Today, they're running aged care facilities, childcare centres, libraries with computer classes for seniors, and managing complex infrastructure that was once the responsibility of state and federal governments.

With cost-of-living pressures continuing to drive up expenses for all Australians, and the federal government facing a deficit of $26.9 billion in 2025-26, there's limited financial room for any level of government to provide relief.

The waste levy 'black hole'

Queensland councils face an additional burden that's hitting ratepayers hard. The state's Waste Disposal Levy, introduced in 2019, was designed to reduce landfill waste. Initially, the government offset 100 per cent of the cost for councils, but this is being gradually reduced.

By 2030-31, councils will only receive a 20 per cent offset, leaving them to fund the remainder through rates. Rockhampton Mayor Tony Williams calculates this will create a '$2.9 million black hole' his council will need to fund every year by 2030.

For regional councils, meeting waste reduction targets is particularly challenging due to what Mayor Williams calls 'the tyrannies of distance, competitions in the market and volumes that we're dealing with.'

What's being done and what you can do

A federal review into local government sustainability began last year but lapsed when parliament was dissolved for the May election.

The good news is that Federal Minister Kristy McBain has committed to re-establishing this inquiry, acknowledging the 'critical role councils play in providing services and infrastructure to all Australians.'

There are signs of progress, with calls for Financial Assistance Grants from the Commonwealth to return to 1 per cent of Commonwealth taxation revenue, and the establishment of an Expert Advisory Panel to shape reforms.

As a ratepayer and community member, you're not powerless. Contact your local council to understand where your money goes and what services matter most to you. Many councils hold budget consultation sessions where community input is genuinely valued.

Consider attending council meetings—they're public, and your voice as a senior member of the community carries weight when discussing service priorities.

The reality is that this crisis won't resolve quickly. Councils are managing decades of underfunding while demand for services continues to grow.

The federal funding model needs fundamental reform, but that takes time.

In the meantime, seniors like Fe and Eddie Monteiu are making difficult choices between their weekly coffee catch-ups and paying the bills.

It's a reminder that behind every budget decision and rate rise are real people trying to maintain their quality of life and community connections on fixed incomes.

The challenge isn't just financial—it's about preserving the community bonds and services that make our towns and suburbs places worth calling home.

Have you noticed changes in your council services or struggled with recent rate increases? What community services matter most to you, and how are you managing the rising costs? Share your experiences and thoughts in the comments below—your voice helps us understand the real impact of these changes on Australian seniors.