IF SOUTHERN Downs Regional Council was a private business, it would be bankrupt by now, according to the chairman of the Save our Shire Action Group.

As residents face the prospect of a rate rise in the upcoming budget, questions are being asked about just how bad was the council's financial state.

Bob Johnson, from the Save our Shire Action Group, was scathing of the council's spending and called on the council to cut their capital works spending.

"We have evidence our debt is at $36 million," he said.

"We believe we should be getting back to basics - despite what the mayor says roads, rates and rubbish isn't actually dated.

"We've got to cut out this large capital works spending."

Southern Downs Mayor Peter Blundell said the council debt at the end of last financial year was more than $30 million.

"The figure as at the end of June 2014 was $31,863,000," he said.

"We are expecting a slight decrease in this figure at the end of this financial year."

Cr Blundell said Southern Downs ratepayers needed to understand the financial situation had changed in the past seven years, especially as support from other levels of government continued to fall.

"Grants from other governments used to make up 40% of our budget," he said. "Now it's only making up 10-15 %

Mr Johnson has called for the council to abandon the idea of a rate rise and is demanding an explanation for why previous rate rises have well above CPI.

"Ever since councils have been amalgamated, the rate rises have been above CPI," he said.

"If someone can explain to me why that's the case I'll be very pleased."

Council rates had indeed been higher than CPI, Cr Blundell conceded.

"The rate rises have been higher than the CPI index because the consumer index for council is marginally higher," he said.

"The index is higher because of the range of services we provide - certainly for things such as bitumen in building roads."

The Save our Shire Action Group believes councillors and council officers should take responsibility for the council's financial problems, according to Mr Johnson.

"I worked for years in private business and if I did what the councillors and officers have done I'd be sacked," he said.

"If they (councillors) do not pull their horns in then we'll sack at them at the next election.

"We're looking for responsible people to stand at the next election."

Cr Blundell said he accepted the responsibility for the budget and financial decisions rested with the council.

"Obviously we have to make a decision and the responsibility for those choices and decisions rests with the council," he said.