Local authorities reduce operating deficit in 2010

Local authorities’ operating expenditure exceeded income by $0.3 billion in the year ended June 2010, Statistics New Zealand said today. However, local authorities have reduced their total deficit by $100 million, from $0.4 billion in 2009. Local authorities have had an operating deficit since 2008.

Local authorities’ operating income (funding earned to provide core services) increased 7.5 percent to $6.9 billion while operating expenditure (spending on core services) rose 5.6 percent to $7.1 billion. The main source of income for local authorities was rates, which increased 6.2 percent compared with the year ended June 2009.

Local authorities are rich in assets. "Local authorities own assets worth more than ten times the value of their liabilities," acting national accounts manager Jason Attewell said. The value of their infrastructure, buildings, land, investments and other assets at June 2010 was $102.9 billion. Liabilities were $9.6 billion.

Taking all transactions (such as valuation changes and capital transfers) into consideration, local authorities ran a surplus of $2.1 billion. This surplus is $0.5 billion less than in 2009.

The statistics released today are available for each local authority in New Zealand. The latest figures are available for the year ended June 2010, which is before the merger of the previous Auckland councils.

Statistics New Zealand also released Government Finance Statistics (Local Government): Year ended June 2010 today. It is the first of what will be a regular annual release. The release provides an economic analysis of local government financial activity. Government Finance Statistics (GFS) enable easy analysis of the collective activity of local government and comparison between a variety of other economic indicators such as gross domestic product. Our analysis is based on concepts and principles developed by the International Monetary Fund.