Local authorities' deficit continues to grow

Local authorities’ spending exceeded income by $0.6 billion in the year ended June 2011, Statistics New Zealand said today. Their operating deficit is $0.4 billion larger than the year ended June 2010, when spending exceeded income by $0.2 billion. Local authorities have had an operating deficit since 2008.

Local authorities’ operating income (funding earned to provide core services) increased 6.5 percent to $7.3 billion, while spending on core services rose 11.6 percent to $7.8 billion. The main source of income for local authorities was rates, which increased 4.9 percent compared with the year ended June 2010.

Local authorities own valuable assets. "Local authorities' assets grew more than 17 percent in value, to $121 billion, in the year ended June 2011," local government statistics manager Peter Gardiner said. Liabilities were $10.5 billion.

Taking all transactions (such as valuation changes and capital transfers) into consideration, local authorities ran a surplus of $3.5 billion. This surplus is $1.3 billion greater than in 2010.

The statistics released today are available for each local authority in New Zealand. The latest available figures are for the year ended June 2011.

These statistics include some earthquake-related spending in Canterbury, though this expenditure is not separately identifiable. Further spending in Canterbury will be included when this information becomes available. These statistics also include data for the councils that combined to form Auckland Council on 1 November 2010, as well as data for the new council.

See also:  Local Authority Financial Statistics: Year ended June 2011  –  Information release