Wow How We going To Pay For It And Still Have A Life ?? In the relatively short life of the inaugural Auckland Council debt levels have soared. The council’s borrowings will increase from $5.5 billion to $6.7 billion in the current 2013/14 financial year. That’s an increase of $1.2 billion in just 12 months, which is over $3 million a day. At the same time the cost of interest payments is forecast at $367 million, which is just over $1 million a day. These are huge numbers. More worryingly is that this is not just a one off. The council’s 2013 pre-election report revealed some worrying skyward escalation. While the 10-year Long Term Plan signed off just last year forecast debt to reach over $12.3 billion by 2022, it has now been revised up another $598m to $12.9 billion. In late 2010 when Auckland’s eight councils amalgamated net debt for the group (which includes the council controlled organisations) was put at $3.4 billion, with the expectation that costs would be better contained under one council. However the annual net interest costs alone are set to increase from $190m to a staggering $752m over the first decade of this amalgamated council – which will then take the equivalent of nearly 25% of annual rates income to fund. That’s based on the assumptions that borrowings will not be revised up again and even more unlikely, interest rates remaining at between five and six percent.
Posted on: Wed, 11 Sep 2013 08:57:13 +0000
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