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

Joint Statement: Establishment Of NZ-China Strategic Partnership

At the invitation of Governor-General Lt Gen The Rt Hon Sir Jerry Mateparae and Prime Minister The Rt Hon John Key of New Zealand, President Xi Jinping of the People’s Republic of China made a state visit to New Zealand from 19 to 21 November 2014.

During his visit, President Xi Jinping met with Governor-General Jerry Mateparae, and held talks with Prime Minister John Key. The leaders had an in-depth exchange of views on bilateral relations as well as regional and international issues of common interest. More>>

 
 

Parliament Today:

Savings Targets: Health Procurement Plan Changes Direction

Next steps in implementing DHB shared services programme Health Minister Jonathan Coleman says the Government has agreed to explore a proposal put forward by DHBs to move implementation of the shared services programme to a DHB-owned vehicle. More>>

ALSO:

More on Health Policy:

Auckland Unification: 'No IT Cost Blowout' (Just More Expensive)

Following discussion of an update on Auckland Council’s Information Services Transformational Programme at today’s Finance and Performance Committee, council has released the report publicly. More>>

ALSO:

Other Expensive Things:

Gordon Campbell: On The SAS Role Against Islamic State, And Podemos

Only 25% of the US bombing runs are even managing to locate IS targets worth bombing. As the NYT explains at length, this underlines the need for better on-the-ground intelligence to direct the air campaign to where the bad guys have holed up... More>>

ALSO:

Public Service: Commission Calls For Answers On Handling Of CERA Harassment

EEO Commissioner Dr Jackie Blue is deeply concerned about the way in which the State Services Commission has handled sexual allegations made against CERA chief executive Roger Sutton this week and is calling for answers. More>>

ALSO:

Gordon Campbell:
On Andrew Little’s Victory

So Andrew Little has won the leadership – by the narrowest possible margin – from Grant Robertson, and has already been depicted by commentators as being simultaneously (a) the creature of the trade unions and (b) the most centrist of the four candidates, which would be an interesting trick to see someone try in a game of Twister. More>>

ALSO:

China President Wishlists: Greens Welcome Xi, But Human Rights Need To Be On Agenda

“President Xi has made some progress on climate change, but he must also lift the Chinese government’s game on human rights issues,” Green Party Co-leader Dr Russel Norman said... It is important that our Government continues to urge the Chinese government to show restraint and respect human rights in both Tibet and the Xinjiang province.” More>>

ALSO:

Airport Security Breach: CAA Fines Minister

Minister Brownlee has been issued an infringement notice and is required to pay a $2000 infringement fine for breaching Civil Aviation Rule 19.357(b), which states no person may be in an airport security area without an appropriate identity card or document. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Regional
Search Scoop  
 
 
Powered by Vodafone
NZ independent news