Auckland Council pays interest at $1 million per day

The?Auckland Council 2013 Pre-election Report?(PDF 477KB) makes for sobering reading. Especially Page 6.

Here, the CEO’s report lists the Council’s debt parameters including the fact that now, and over succeeding years Auckland’s borrowings amount to “Net interest on Council debt at 20% of annual rate revenues”.

councildebtNow that’s a lot of dosh and in understandable terms, given that current debt totals around $6 Billion, at a 5.75% interest rate this is an interest payment to the banks of just under?$1 Million per day. Yes, every day. ??

The table also makes a mockery of Len Brown’s claims to lower the rate of increase in rates…the table shows clearly that rates, and that is average rates i might add, are expected to rise by nearly 5% in each of the next three years.

This is the legacy of Len Brown. If you were running your household, paying interest only (no principal) at 20% ($1 in every $5) of your basic income each year and with such large daily lumps of interest would you be planning huge future capital expenditures and a doubling of the debt?

Perhaps the five Mayoral candidates might make Council debt an issue this October. I sure would.