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

 


New Zealand’s councils in sound financial health

MEDIA RELEASE
11 June 2014
For immediate release

New Zealand’s councils in sound financial health

A newly released independent report from Grant Thornton shows councils are in a sound overall financial position.

Local Government New Zealand (LGNZ) commissioned analysts Grant Thornton to review key financial factors for councils across the country to produce an accurate overall picture of local government financial health.

The report, Local Government: A Financial Snapshot, shows that the vast majority of councils scored well in metrics relating to their balance sheets, such as debt levels relative to their asset base, debt levels relative to their population, ability to repay debt and ability to cover interest (finance cost) obligations.

The report’s “Ability to Service Debt” measure looks at the soundness of a council’s ability to service both its debt principal and interest costs, using an equivalence of operating cash. It shows that, in relation to their ability to service debt costs, all metropolitan and regional councils are sound; and the large majority of rural and provincial councils are all sound or very sound.

LGNZ President Lawrence Yule says the report provides conclusive evidence that the overwhelming majority of councils are in good financial health and are using best-practice financial management.

“The local government ratio of debt to assets is at a prudent 9 per cent. This is the equivalent of a $36,000 mortgage on a $400,000 home,” Mr Yule says.

“Accordingly, the local government sector continues to have the lowest debt of any sector in New Zealand.”

As at 30 June 2012 local government collectively owned $121 billion of infrastructure, investments and other assets against $11 billion debt. In comparison central government owns $241 billion of assets $181 billion debt, while the business sector has assets of about $1,233 billion with liabilities in excess of $800 billion. (See attached infographic from the February 2013 Government report Building Capital Markets.)

Mr Yule stated that it is vital to understand the appropriate context when analysing the financial situation of any local authority. The analysis needs to account for for the different pressures faced by individual councils, for example, whether they are planning for an increasing or decreasing population base.

“Debt per se is not bad. On the contrary it is an appropriate funding tool for intergenerational assets such as roading and water infrastructure,” Mr Yule says.

Any council debt needs to be considered alongside the council’s asset base and it is necessary to look at what specific intergenerational projects the debt is being used to fund, the services councils provide and population change. Local Government: A Financial Snapshot applies appropriate metrics for sector analysis.


“This report sets the record straight about the current council financial position,” Mr Yule says.

“Overall, New Zealand’s councils are in overwhelmingly sound financial health.”

*Ends*

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

Parliament Today:

The Kids: OECD Report Shows Huge Impact Of Poverty On Education

A new report from the OECD has again highlighted the negative effects of poverty, showing that disadvantaged children in New Zealand are more than six times more likely to underachieve in maths than children from wealthier homes. More>>

ALSO:

Pacific: NZ Pledges $500,000 To Help Address Zika

“With the Zika virus now confirmed in a number of Pacific countries, New Zealand is committed to helping limit the impact and spread of the virus in the region,” says Mr McCully. “New Zealand will provide $250,000 as a contribution to the WHO to implement the Pacific Zika Action Plan, and a further $250,000 to enable countries in the region to respond rapidly if required." More>>

ALSO:

Labour: Police Commissioner 'Doesn’t Get Force Needs'

The Police Commissioner has let down the public and his own force by insisting the police have what they need despite it taking a year to solve a burglary and overwhelming number of officers saying they are under-resourced, says Labour’s Police spokesman Stuart Nash. More>>

ALSO:

Gordon Campbell: On The US Pressure To Expand Our Role In Iraq

Foreign news services are being more forthcoming about what the “next 12 months” will entail – essentially, the defence ministers will be under US pressure to increase their “training” role preparatory to an assault on the city of Mosul in northern Iraq. More>>

ALSO:

Parliament Restarts: Prime Minister’s Statement

Our policy agenda and legislative programme will reflect the Government’s four priorities: • to responsibly manage the Government’s finances • to build a more competitive and productive economy • to deliver better public services to New Zealanders, an • to support the rebuilding of Christchurch. More>>

ALSO:

NZEI Survey Report: Special Needs Students Missing Out

The survey revealed that around 16 percent of students were on schools’ special needs registers, but nearly 90 percent of schools’ special needs coordinators did not believe there was adequate support for students and their learning... More>>

ALSO:

Interim Report: Waitangi Tribunal On Ture Whenua Legislation

Labour on Proposed changes to Maori land rules: “To have Treaty Negotiations Minister Chris Finlayson dismiss findings as ‘bizarre’ is totally disingenuous and disrespectful. What’s bizarre is Maori Development Minister Te Ururoa Flavell stubbornly pushing through this Bill before the Waitangi Tribunal has even completed its report..." More>>

ALSO:

Spy Update: Appointment Of GCSB Acting Director

GCSB Chief Legal Advisor Lisa Fong will become the Acting Director of the Government Communications Security Bureau (GCSB) from 15 February 2016, Minister Responsible for the GCSB Christopher Finlayson announced today. More>>

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Regional
Search Scoop  
 
 
Powered by Vodafone
NZ independent news