Green Amendment Will Save Ratepayers Stacks Of Money

A commonsense Green Party amendment to the Local Government Rating Bill will save ratepayers in many districts hundreds of thousands of dollars, Green co-leader Jeanette Fitzsimons said today.

Ms Fitzsimons' amendment, which formed part of the Bill when it passed its third reading in Parliament last night, will allow councils to borrow money for projects from their own financial reserves instead of having to borrow from banks.

"Until now councils which have had financial reserves such as port shares have been unable to borrow this money from their own reserves and have had to pay higher interest rates to borrow money for projects from outside lending institutions.

"My amendment will allow councils to borrow from their own reserves, in a fully transparent fashion. This makes sense as borrowing from their own reserves will save councils around two per cent in transaction costs on average," said Ms Fitzsimons.

"This is the difference between the borrowing rate and the lending rate.

"In my own electorate the Thames Coromandel council will save $180,000 from this simple amendment through being able to borrow from money from their sale of electricity shares. I expect other larger councils around the country will make significantly larger savings."

Some councils are already borrowing internally because the law has not been clear. However the Auditor General has advised that this is probably illegal.

"This amendment will bring peace of mind to those councils already taking the risk, and cost savings to those which have taken a more conservative approach," said Ms Fitzsimons.

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