Local government is spinning like a top, this time it is Craig Stobo trying to pull the wool.
New Zealand territorial authorities have assets of $117.4 billion yet extremely low debt levels of only $10.8 billion, says a financial chief.
Craig Stobo, chairman of council funder the Local Government Funding Agency which finances many councils, revealed the numbers at a briefing yesterday, saying those ratios proved councils were extremely financially cautious.
“Councils in New Zealand are conservatively geared. That indicates they’re prudent financial managers and their communities should be grateful,” Stobo said.
Firstly this is nothing but PR spin by a local government organisation. They know that they are under attack for crap financial performance and high debt.
But assets of $100b plus? I don’t think so.
The NZ Govt Treasury definition of an asset is something that will provide economic benefits. Other definitions by Audit NZ for example say that it is something that can generate income or be sold to generate income.
Most of what Local Government calls ‘assets’ are actually a value applied to land that sits under roads or parks. These can’t be sold and they can’t generate income. So they aren’t assets. Â Read more »