New Zealand Herald’s Holes

Former Commissioner on the Royal Commission on Auckland Governance Chimes In

 

budget

 

Former Commissioner on the Royal Commission on Auckland Governance David Shand wrote a piece in today’s Herald that critiqued both Orsman and Roughhan’s respective pieces on Auckland’s finances.

From the NZ Herald (I know of all places, but credit for publishing it to allow “balance”)

David Shand: Auckland’s far from going broke

 5:00 AM Wednesday Jul 16, 2014

It’s wrong to whip up ratepayer fervour over the state of Super City finances, writes David Shand.

Aucklanders should have an informed debate about the state of the city finances, given the $1.4 billion of rates collected annually and the total assets of some $40 billion managed by the council. However, the debate has not been well served by Herald articles which blithely use terms such as “spending spree”, “spending beyond its means” and “crisis point”.

This has led to the usual spate of letters from aggrieved ratepayers who are only too willing to believe that the council’s finances are in a “mess” and that we may be facing “bankruptcy”. There is no “crisis” in the city’s finances at the moment but there are major issues to be addressed.

May I suggest the following facts and issues for the debate:

1. The Auckland Council’s latest audited financial statements (for the 2012/13 year) show an operating surplus of $246 million and total assets of $37 billion against debt of $8 billion. Either the Herald analysis is faulty or at least incomplete, the accounting standards are inappropriate (unlikely) or there is something wrong with the Auditor-General (most unlikely).

Further, the Auditor-General is required to report each year on councils which may not be financially viable. She has not referred to Auckland Council in this context.

You can read all six points here: http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=11293946

 

I have mentioned before in my Budget Redux the finances are in good condition OPEX wise with surpluses reported. As for CAPEX this is where we do need refinement in getting best bang for buck in our capital investments. Just remember the Centre Right Councillors in the last term of Council approved $3m of your money to go to a church upgrade in Parnell. That money could have been used as a deposit for grade separating a railway level crossing which the Council (including Auckland Transport) keeps pleading it does not have (when in fact it does).

 

So if you hear someone say Council finances are in dire straights I would recommend you tell them to go read the figures. Least Council is showing strong surpluses while the Government hasn’t (yet).

 

Links to other commentary on the matter:

Council CEO Responds In-Kind

Budget Redux

 

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