Big losers in Shearwater collapse
BUSINESSES in and around Mullumbimby are seething about bearing the brunt of the financial collapse at Shearwater school.
The school has gone into administration, owing $10.7 million.
About half of this debt is to creditors such as Westpac, the Australian Tax Office for teachers’ salary schemes and superannuation, and the Federal government for building grants that were diverted.
But unsecured creditors, including local businesses and tradesmen, are owed a colossal $5.7 million and look like recovering no more than 10 or 15 cents for every dollar owed.
The longstanding debts are creating widespread resentment in the community.
“It’s all very well the school being happy for the children, but what about the poor small businesses,” said one trader, who has been owed $600 since August.
“We called the school twice a week for the past two months asking when we are going to be paid. Each time they told us we should have payment in our account by the end of the week or the following week.
“Obviously these were lies.”
On Friday, March 19 he was told he would get his money on the following Monday. Instead he received a letter from the administrator PPB, outlining the school’s financial woes.
“We’ve spent all our lives in Mullumbimby and business at the moment is a bloody struggle. It looks like we will get almost nothing.”
Mark Thomas of Mullum Hire, who is owed about $2000, said the school would find it difficult to find local traders who would do business with them in the future.
He said the school’s ‘extravagance’ compared with public schools had contributed to the crisis.
“I can’t understand how there could have been such poor financial governance,” he said.
Mr Thomas has come to terms with the situation by putting it in the context of what the school had provided him with for the past three years.
“I’m not happy, but it’s not my first bad debt,” he said.
Not so philosophical is Mark Ware, head of Ware Building, based in Tweed.
He is furious at being left with $460,000 unpaid after the school reneged on a $1.8 million contract to build six new classrooms.
“The school told me halfway through that they had no money to pay me,” he said
“They asked us to cancel the contract and set up a payment schedule that was never ratified.”
The next thing Mr Ware knew, the school had gone into administration and any money it had was frozen.
Shearwater had behaved shamefully by entering into a contract it knew it couldn’t honour, he said.
School board member Ian Howden said: “Our aim is to be in a position to be able to trade our way out of this. We have processes in place that will satisfy these creditors but we will have to work hard and creatively to regain the confidence of the larger community.”