Local authorities' operating deficit reduces

Local authorities' quarterly operating deficit reduced $43 million in the September 2011 quarter, after adjusting for seasonal effects, Statistics New Zealand said today.

"The reduced deficit this quarter was driven by an increase in operating income of $86 million, largely due to increased revenue from current grants, subsidies, and donations," national accounts manager Rachael Milicich said.

While local authorities reduced their deficit in the September 2011 quarter, they still spent $7 million more than they earned from current operations.

Both operating income (funding earned for core services) and expenditure (spending on core services) increased from the June 2011 quarter to the September 2011 quarter. Operating income increased by $86 million (4.6 percent), to $1.96 billion. Operating expenditure increased by $44 million (2.3 percent), to $1.97 billion.

Current grants, subsidies, and donations (up $73 million) was the main contributor to the rise in operating income. Current grants, subsidies, and donations are mainly used to support regional infrastructure. There were smaller increases in rates (up $42 million), sales and other operating income (up $17 million), and regulatory income and petrol tax (up $8 million). These rises were partly offset by a fall in investment income (down $53 million).

The increase in operating expenditure was mainly due to an increase in purchases and other operating expenditure (up $35 million) and employee costs (up $12 million). These rises were partly offset by a fall in interest expenditure (down $3 million).

See also:
Local Authority Statistics: September 2011 quarter – Information release