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Local authorities spend a record $2.3b in Q2

BUSINESSDESK: New Zealand's 11 regional councils and 68 territorial authorities spent $145 million more than they earned in the second quarter, continuing an almost unbroken run of deficits from 2007, government figures show.

Total operating income, which includes rates, investment returns, grants, subsidies and donations, regulatory income such as building consent and dog registration fees – and operating income such as admissions and service charges – rose 7% to $2.16 billion in the second quarter from the first quarter.

Operating expenditure rose about 12% to a record $2.3 billion, according to Statistics New Zealand. The figures are seasonally adjusted.

Local authorities have recorded deficits in 19 of the past 22 quarters. The biggest source of income is rates, which fell 3.1% to $1.1 billion in the second quarter from the first three months of the year and were 3% higher than in the second quarter of 2011.

Investment income jumped about 98% to $177 million in the latest quarter and is typically lumpy because of the timing of dividends for council-owned businesses such as airports.

Income from grants, subsidies and donations rose about 29% to $368 million, while regulatory income and petrol tax rose 6.7% to $139.4 million. Sales and other operating income edged up 0.2% to $343.3 million.

Purchases and operating expenditure, which includes rent, insurance, fuel, postage, repairs and maintenance, rose 21% to $1.29 billion in the second quarter from the first and was about 20% up on the second quarter last year.

Employee costs rose 3% to $446 million and climbed 6.4% from a year earlier. Interest costs rose 7.5% to $151.4 million, while depreciation and amortisation fell 1% to $407.5 million.

Comments and questions
5

Time for a rates revolt by long-suffering ratepayers to bring big-spending councils to their senses. Also, the government needs to get on with repealing Labour's ridiculous 2002 general competency legislation and getting councils back to their basic functions.

It's time local councils got back to basics.
As a ratepayer it never ceases to amaze me why we let this carry on.
IT'S GOT TO STOP!

Govt is to blame. LGA 2002 provides the authority to local councils therefor they are happily spending and taking over private enterprise.

Where EXACTLY are rates monies being spent?

Where's the TRANSPARENCY?

Why aren't 'the books' OPEN?

When are the NAMES of the consultants/contractors; SCOPE; TERM and VALUE of the thousands of contracts which provide long-term corporate welfare dependency for thousands of corporate welfare beneficiaries with their private snouts in our local government public trough, going to be made available for public scrutiny?

Where's the LONG overdue review of corporate welfare at local (and central) government level?

When is this National/ACT Government going to start WAR on the undeserving RICH?

ie: These long-term corporate welfare beneficiaries who are providing core local government services for private profit which used to be provided 'in-house' under the 'public service' model on a non-profit-making basis?

If the private 'contracting-out' model is SO 'efficient' - then how come RATES KEEP GOING UP - NOT DOWN?

How many billion$ could be saved at both central and local government level by CUTTING OUT THE CONTRACTORS and CONSULTANTS?

Penny Bright
'Anti-corruption campaigner'

www.dodgyjohnhasgone.com

This a poorly written & researched article that doesn't give s TRUE perspective.