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Key’s surprise for Aucklanders

Written By: - Date published: 6:47 am, June 16th, 2009 - 18 comments
Categories: auckland supercity, democracy under attack, john key - Tags:

democracy-under-attack
Analysis by Rhema Vaithianathan, which hasn’t itself been critiqued but has seen her subjected to the typical vicious personal attacks from National, shows that the supercity will have big economic costs for the areas of most of the existing councils:

• Rodney: annual regional GDP falls by up to $74 million and 270 job losses
• Waitakere: annual regional GDP falls by up to $139m, over 680 job losses
• Manukau: annual regional GDP falls by up to $189m, 702 job losses
• Franklin: annual regional GDP falls by up to $41m, 113 job losses
• North Shore: annual regional GDP falls by up to $162m, 658 job losses

Hmm. Funny that Hide forgot to mention that when he said the cost of the supercity would be ‘miniscule’ perhaps he didn’t know. Perhaps, as seems to be a recurrent theme of this government, they hadn’t done the cost/benefit analysis.

There’s another set of costs that Key and Hide have kept quiet about.

At the moment the different councils in the Auckland region have different levels of debt. Fair enough, the people elected their own councils. They got to choose what councils they wanted with which policies and the debt levels that came with them.

If Key and Hide force this supercity on Aucklanders they will also combine all the councils’ debts into one. For most people (870,000) the per capita debt of their council will increase, for the other 498,000 it will drop.
combining council debt
People from Manukau, Auckland City, Franklin, and Papakura will suddenly find themselves paying more in rates to pay off debts that were accrued by the people of Rodney, Waitakere, and North Shore.

Nearly 900,000 people will suddenly be loaded with paying off debts from councils they didn’t vote for in a supercity they don’t want. What’s democratic about that?
-Marty G

Update: sorry guys, forgot the links: Rhema’s studyCouncil debt levels.

18 comments on “Key’s surprise for Aucklanders ”

  1. vidiot 1

    Can you link to this report ? The only one I can find is: http://blog.labour.org.nz/wp-content/uploads/2009/06/transition-costs-and-job-losses-of-the-super-city.pdf

    This makes no mention of these decreased GDP figures.

    ” We estimate that transition costs will be in the range of $220 to $289 per Aucklander.”

    And as for the sharing of debt, that’s what it’s all about comrade. It’s just like our tax system, everyone pays a fair share.

    • Tigger 1.1

      Yes, but is paying someone else’s bills ‘fair’? Imagine that the government forced you and your five neighbour to ram your homes together – you’d half paid off your mortgage, another couple were mortgage free but the others had hefty amounts owing and one was mortgaged to the hilt – but now you’re all jointly and equally responsible for the combined amount. Fair?

      • cocamc 1.1.1

        Tigger
        A poor analogy – I don’t use my neighbours house so shouldn’t have to pay for their mortgage. Who says That North shore city’s debts (as an example) aren’t the responsbility of the rest of Auckland. North shore, Rodney and Waitakare has had to develop infrastructure to support the growing auckland population and their needs and all aucklanders use those services

        • felix 1.1.1.1

          Are you saying Auckland and Manukau haven’t?

          • cocamc 1.1.1.1.1

            nope, I just used those examples since MartyG seemed to raise NSCc, WCC and Rodney. And these figures would need to verify whether taking into account just debt as per balance sheet, net debt, includes contingent liabilities (e.g. Watercare)

          • felix 1.1.1.1.2

            That doesn’t make any sense.

            NSCc, WCC and Rodney are the one’s who’ll be lumping their debt onto the others.

            Your justification was that they’ve borrowed for the good of all the cities therefore all the cities can pay.

            That would only make sense if the other cities hadn’t borrowed for the good of NSCc, WCC and Rodney.

            Do you really not understand what you wrote?

          • cocamc 1.1.1.1.3

            Felix –
            I do understand what I wrote. All the Auckland councils have taken on debt to develop infrastructure for the benefit of not only their own rate payers but indirectly it benefits all Aucklanders and in general the whole country. The levels of debt in each council is irrelevant as councils have different plans and funding requirements.

            Auckland City, Manukau et al will be dumping their debt onto all the other council rate payers as well. I was just illustrating that Marty G has drawn a very long bow that the NSCC, RDC and WCC rate payers will benefit the most.

            And the graph is not explicit enough as to how Debt per person is calculated so it could be askew. Does the figure for Manukau for example just look at their long term liabilities or does it offset that against the assets such as AIAL shares. If you take long term liabilities and divide by population (335,000 according to latest annual report) then the debt per person is over $1,000) and not that shown in the graph.

            The counter to MartyG’s analysis is what debt reduction programs can be put in place with a combined super city with over 1.3 million people.

      • djp 1.1.2

        that is what socialism is all about comrade… paying someone elses bills (see for example social welfare)

        • Draco T Bastard 1.1.2.1

          Yep, businesses should pay enough so that people can actually afford to live that way they’d have the labour available when they need it. Social Welfare – paying the bills for business for decades.

    • Jenny 1.2

      The following is the link to the original article.

      http://www.stuff.co.nz/2490891/Super-suffering-revealed#comments

      Jenny

  2. Jasper 2

    Are there any stats on what the average rate payment currently is for each council?

    I would imagine rates would go down, rather than up, especially if councils are restricted to nothing more than core services

  3. djp 3

    I would like to know how the GDP of these areas is supposed to fall when these councils don’t currently produce anything… they simply spend other peoples money

    Also assuming the job cuts are associated with reduced costs to the ratepayer then they will no doubt be replaced with jobs in another sector.

    • Maynard J 3.1

      “I would like to know how the GDP of these areas is supposed to fall when these councils don’t currently produce anything they simply spend other peoples money”

      The point being that all of our money will be spent in Auckland City. The administration and production of all councils will be centralised at the expense of the other districts. Your knowledge is probably not helped by the view that you have to ‘produce something’ to contribute to GDP. It is not all steel and cars and coal these days.

    • Draco T Bastard 3.2

      I would like to know how the GDP of these areas is supposed to fall when these councils don’t currently produce anything.

      I’d say, at a guess, that it would be from the removal of needed services.

      Also assuming the job cuts are associated with reduced costs to the ratepayer then they will no doubt be replaced with jobs in another sector.

      Didn’t happen in the 1980s when the 4th Labour government set Rogernomics on us and it didn’t happen in the 1990s either when the 4th National government continued those reforms. Expecting it to happen this time seems rather stupid (definition of stupidity: Doing the same thing over and over again and expecting a different result).

  4. Zaphod Beeblebrox 4

    Problem is local govt is not just another business. All the councils have built up assets, some of which are used for the benefit of the community (swimming pools, sports fields, art galleries, airports etc..). Gross debt is meaningless unless you look at the long term return of those assets and the externalities and hidden benefits of those assets (sports fields for example have long term benefits for public health).

  5. Liam 5

    I think the point that is being missed here is that no single council can be blamed for the fact that the rate payers of other councils will pick up their debts. I can’t recall hearing any support for the supercity from any existing councils, the fact is this is just another downside to an idea which is made up of downsides.

  6. Should be some interesting information to come out of this question when parliament sits in about half an hour:

    Hon PHIL GOFF to the Prime Minister: Is he satisfied with the way in which his Ministers have handled the restructuring of Auckland’s governance arrangements?

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