Local Govt | National News Video | Parliament Headlines | Politics Headlines | Search


Councillor predicts rates will go towards paying interest

One third of rates will go towards paying interest, predicts Councillor

Auckland Councillor Cameron Brewer today raised concerns in the Finance & Performance Committee about the increasing amount of rates revenue going towards servicing interest costs on ballooning council debt.

Today, ‘net interest as a percentage of rates income’ was reported at 19% as at 30 June 2013, with finance staff confirming it was just 9% at 30 June 2011. Council treasury policy allows for a maximum 25%.

“Given it has more than doubled in just two financial years, I think we’ll sail past the 25% limit by the end of the decade. In fact given council’s borrowings are set to more than double, and with rising interest rates, I think council’s interest costs will easily double again by the end of this 2012-2022 Long Term Plan period.

“It’s well established that Auckland Council is now paying $1m a day in interest, and it’s only going to get worse. What it means now is that if the average annual Auckland household rates bill is around $2,500, the first $500 is effectively going solely towards covering interest payments, not on providing council services. Or if you like, for the first 10 weeks of every calendar year ratepayers are paying all their rates just to service council’s interest bill!

“While the Mayor claims the council’s got plenty of capacity to borrow more, the reality is on the current track soaring interest costs will seriously limit future generations options, as interest payments chew up more and more council budget.

“The Mayor and councillors have already lifted the ‘net debt as a percentage of revenue’ ceiling from 175% to 275% and I suspect we’ll be forced to lift the interest ceiling as well. Let’s not forget council’s forecast 10-year borrowing plan was increased late last year, not to mention that we’re coming off a 50-year interest rate low.

“The Mayor continues to promise everything to everyone. The reality is however, if he wants to avoid putting crippling interest costs on Aucklanders, he needs to start seriously prioritising all his big political promises and ‘game-changing’ projects. Amazingly he still wonders why people don’t like his plan to fast-track the City Rail Link without any funding plan in place.” says Cameron Brewer.


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines


Environment Commissioner: We Need To Work Together On Climate Change And Farming

“The debate around agricultural emissions and the ETS has been polarised for too long,” said the Commissioner. “But the ETS is not the only way forward – there are other things that can be done.” More>>


NZ Super Fund: Seeking To Put A Market Price On Climate Change

Oct. 19 (BusinessDesk) - The New Zealand Superannuation Fund says it will devise a set of rules to assess investment winners and losers under climate change, a strategy that could rule out fossil fuels or producers such as current portfolio member Exxon ... More>>


Rejuvenation: Parata Will Not Contest 2017 Election

Education Minister and National List MP Hekia Parata has today announced that she will not be contesting the next election. She advised the Prime Minister of her decision earlier this year. More>>

Prisons Grow: Government Approves Plans For Increased Prison Capacity

Despite significant progress in reducing crime the number of prisoners has increased faster than projected. This is because the proportion of offenders charged with serious crimes has risen, meaning more people are being remanded in custody and serving more of their sentences in prison. More>>


Gordon Campbell: On Plastic Bag Activism, And Street Harassment

Amusing to see the Act Party experiencing another outbreak of young fogey-ism. What has aroused the ire of Act Leader David Seymour this time is the introduction of a Greens private members bill to the ballot process, calling for a 15 cents levy on plastic bags to reduce pollution. More>>


Unclear Weapons: US Navy Ship Cleared To Visit NZ For Navy's 75th

United States Navy ship, the USS Sampson, has been given clearance to visit New Zealand next month by Prime Minister John Key... “The process for considering the visit by the USS Sampson is the same as that used for all ships attending the International Naval Review." More>>


P Policy: $15m Allocated To Tackling Drug Abuse

Almost $15 million dollars seized from criminals will be invested in anti-drug initiatives, with more funding for Police and Customs and a greater focus on treatment for drug abusers, Prime Minister John Key says. More>>


More Or Less Democratic Countries: Fiji Prime Minister To Visit NZ

“This will be Prime Minister Bainimarama’s first official visit to New Zealand as Fiji’s Prime Minister,” Mr Key says. “New Zealand and Fiji have strong ties in a range of areas, and the Prime Minister’s visit presents a further opportunity to discuss issues of mutual interest.” More>>


Get More From Scoop



Search Scoop  
Powered by Vodafone
NZ independent news