News release 24th September

$1 billion extra super City debt!

The increases in debt left by our existing Mayors for the super City to handle will amount to around $1 billion. $545 million extra from Mayor Banks’s legacy, approx $200 extra from Mayor Brown, a lot of last minute projects from Mayor Williams, the highest debt per ratepayer from Waitakere and the second highest debt per ratepayer from Rodney. No wonder Mayor Banks wants one rate across Auckland. His half a billion extra spend up over the rates take will be funded by others. Responsible Mayors would have left their cities in good shape not with extra debt.

Most of the Mayors complained about the cost of the organization of the super city, but they have excelled among themselves in spending around 5 times as much extra in their three year term. Two still proclaim their skill in keeping rates low while presumably hoping the additional debt will get lost in the sorting out to occur.

This spend up legacy of debt will need careful handling so rates don’t take off. Rates will be tending to rise anyway with increasing transport subsidies aided by the Onehunga new train line, despite collecting city income from bus lane fines and large increases in developers levies. So any extra interest on debt financing will also tend to increase rates.

How do we cope with this unfortunate new debt level?

The most effective way to meet this spend up will be to cut expenditure in the first year where ever possible. Get rid of the extra debt as soon as can be arranged.
Projects from the previous Cities and proposed projects will all have to be analysed to decide if they are good value or not. If not they will need to be postponed or go back into the melting pot.

If any new projects are started it should be ones that originate from the Local Boards, but they will come through in year two after consultation with their residents. So we have the first year to cut the extra $1 billion spend up legacy. The billion spend up is only the extra debt as the total debt will be more.

It is obvious that only projects with excellent Benefits/Cost ratios should have any chance of getting funded in year one. We need to get the new super City out of hock and operating along transparent lines with a system in place to ensure spend ups cannot occur again, with a budget ahead so residents have an early warning system.

Investing for infrastructure projects that have advantages for years ahead and pay for themselves, is quite different, and the new City will need to increase investment in this area. The new City needs all projects to increase wealth for the City or for its residents.

We will all have a challenge with our new City. Do we flounder on as before with ‘strong leadership’ into more debt? Or do we take hold of the City, fix its problems and start on a new more productive route to a more prosperous future. There are many sections of our new super City that need a more prosperous future as they don’t have one now.
I don’t believe with the financial situation overseas that we have any option but to get the city sorted financially and soon. Lets take control now and get it done in year one.

ends

© Scoop Media