Local authorities reduce deficit

Spending by local authorities exceeded their income by $91 million in the September 2012 quarter, Statistics New Zealand said today. After adjusting for seasonal effects, this shows an improvement on the deficit of $148 million in the June 2012 quarter.

"Spending by local authorities fell significantly in the September quarter, which reduced councils' deficit from the previous quarter by $57 million," local government statistics manager Peter Gardiner said. "However, rates increased by $52 million in the same period, the largest quarterly rates rise in five years," he added.

Local authorities spent $184 million less in the September 2012 quarter than in the June quarter, mainly due to reduced spending on goods and services (down $201 million). This was partly offset by a rise in interest payments (up $18 million).

Income for local authorities fell $128 million in the September 2012 quarter. This was mainly due to reduced returns on councils' investments (down $120 million). This reflects the regular decline in dividend earnings in the September quarter compared with the June quarter each year. A further downward contribution in the September 2012 quarter came from a fall (down $51 million) in grants and donations.

These falls were partly offset by a 4.6 percent rise in rates (up $52 million). Traditionally, income from rates increases in the September quarter each year, because councils reassess rates levels at the start of the new financial year.

Local authority statistics are quarterly accounting-based estimates of the money local authorities in New Zealand earn and spend on their core business. These figures exclude income and expenditure on capital transactions and changes in valuations.