The ‘bigger is better’ experiment

Ian McLean
Spokesperson for the Green Party

A key measure of fiscal position for a council is to calculate debt servicing costs relative to rating income, with 10 per cent as the guideline of acceptability. It seems Tauranga and WBOP are not doing well – using 4.5 per cent servicing costs, they are about 16 per cent and 15 per cent respectively.

Rotorua, Whakatane and Opotiki are doing better, sitting at 10 per cent, 5 per cent and 3 per cent. Kawerau apparently has no debt.

Compared to Tauranga, Rotorua has one third of the assets and 65 per cent of the income. Yet it employs 12 per cent more staff, has a Route K-type white elephant (the airport) and less debt. Dumb luck or better management?

I suspect the rural regions may not want to share our debt. Will amalgamation lead to better debt management or just spread the debt around for even more children to inherit? Bigger just might not be better.

Let's watch the Auckland experiment for a while longer before jumping aboard.

Ian McLean is a spokesperson for the Green Party of Aotearoa New Zealand.