Press Release. Monday 20th September 2010.

Low Rates! By Increasing Debt?

Mayors Banks’ and Brown’s contrived claims for low rates need to be examined in the light of the latest revelation of increased Council debt levels.

Last week the NZ Herald, 15th September, revealed that the Auckland City Council had gone $545 million more into debt over the last three year term while Mayor Banks crows about his responsible leadership in containing rates for the last two years.

I attended the candidates meeting in St Heliers Bay where his finance chairman Councillor Doug Armstrong repeatedly had no answer for a questioner as to why the $545 million increase in debt occurred, an increase to 270% of debt levels over three years and despite an extra $100 million income. The clear assumption has to be that the real spend during the three years has been transferred into debt to keep rates low. That sort of non-transparent financial management is not responsible.

Meanwhile the Herald Mayoral Debate avoided the question that also applies to Mayor Len Brown who has allowed the Manukau Council and Water body to together run up $200 million extra debt. So lowest water rates and low general rates in Manukau seem also to have been contrived.

This is as misleading as the past 50 finance and property companies. Transferring current costs onto later generations to pay is irresponsible. Incurring debt for major capital investment can be acceptable, but what major assets have been added? Certainly Mayor Banks’ finance chairman had no other answer than it was done very responsibly. The rates will soon have to be increased to part fund these ‘carried forward’ debts, otherwise the new Council can sink further into debt and into trouble as have many US cities at the moment.

Even more important is that these two so called front runners could end up leading the super City, where even more pressures will be on them and they will have much greater scope to run up debt levels while lulling residents into thinking that they are responsible.

The thrill of the chase has seen both Mayors campaigning for a year while supposedly still managing their cities. Hardly seems likely their cities received full measure.

Front runners they may be with the media who have cosseted them all the year. But responsible? Doesn’t seem likely. The right qualities for Mayor of the super City? Doubtful.

Hugh Chapman
Mayoral Candidate
www.chapmanformayor.co.nz

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