Deputy Mayor reaching for the panic button with debt argument

Deputy Mayor David Bassett increasingly looks like a politician starting to panic, judging by his recent media release (Warning of debt burden for amalgamated regions, 2 May 2014).

According to Better Hutt Valley member Theo Muller, “the case for regional amalgamation is getting stronger by the day, and it looks to us like Cr Bassett is reaching for the panic button. He is using the debt argument to frighten Lower Hutt residents away from any change. But the problem is that his debt argument is awed”.

“Quite simply, council debt can be ring-fenced to each district for a dened period following amalgamation. This is what the Local Government Commission has suggested in Hawkes Bay, and this method could be easily replicated in the Wellington region,” says Mr Muller.

Furthermore, Cr Bassett’s claim that Lower Hutt residents will become heavily indebted with other councils’ debt is skewed because it ignores local authority assets.

“Any accountant will tell you that debt tells only half the story of an entity’s nancial position,” says group member Ian Pike. “What matters is the debt-to-asset ratio for each of the councils. Yes, Wellington City has more debt than Lower Hutt, but it has over $6 billion of assets that would get added into an amalgamated council’s balance sheet. Plus, Wellington City has tens of millions of dollars of assets - like the airport - that provide the council with large revenue streams.”

“By contrast, Hutt City’s debt-to-asset ratio is not in a very good position compared with most other local councils, and it has few revenue earning assets. Hutt City Council also steadfastly ignores the fact that in future years it will need to replace storm water and sewerage infrastructure and instead is proposing fanciful projects that Hutt residents don’t need and can’t afford. How will Cr Bassett pay for the proposed Petone Stadium or the other think-big’ projects that are hurriedly pouring out of the Council?” asks Mr Pike.

David Bassett’s attack on the Local Government Commission in his media release is also breath-taking.

“The Commission hasn’t even released a single report on the Wellington region, yet already Cr Bassett is telling everyone that it is biased, disregards evidence, and does not follow the lawful process” says group member Michael Romanos. “Given that the Commissioners don’t have any personal interest in the outcome of all of this, the repeated attacks on their integrity by the Mayor and Deputy Mayor are starting to become a bit cringeworthy.”

Group member Judy Lawrence adds that “presumably David Bassett thinks that issuing a press release peppered with the word ‘supercity’ will have everyone clamouring for the status quo. He hasn’t realised that the debate has moved beyond emotion and rhetoric. People actually want hard facts and information about how amalgamation could work.”

“For instance, his claim that efciency savings following amalgamation are ‘unproven and unlikely’ ies in the face of the report that shows that amalgamation in Auckland has already produced yearly operating savings of $131 million. This is projected to rise to $188 million per year by 2018.

People need to hear about this kind of information, but clearly they won’t be getting it from the Mayor or the Deputy Mayor.”

ends

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