Local authorities' operating deficit rises

Local authorities recorded a seasonally adjusted operating deficit of $63 million in the March 2010 quarter, Statistics New Zealand said today.

"The deficit this quarter is the result of reduced revenue from all sources except rates, while expenditure has remained flat," said Acting National Accounts Manager Jason Attewell.

Seasonally adjusted operating revenue for local authorities decreased $40 million to $1.7 billion in the March 2010 quarter. The main contributions to the decrease came from investment income (down $36 million) and sales of goods and services (down $10 million). Lesser decreases were recorded for government grants and subsidies (down $6 million) and regulatory income and petrol tax (down $4 million). Revenue from rates increased $16 million in the March 2010 quarter.

Seasonally adjusted operating expenditure remained unchanged in the March 2010 quarter at $1.8 billion.

The main contibutions to this result were a fall in employee costs (down $10 million) and rises in depreciation (up $7 million) and purchases of goods and services (up $3 million).

"Quarterly, seasonally adjusted operating deficits have occurred throughout 2008, 2009, and now into the first quarter of 2010," added Jason Attewell.