Oram justifies borrow and spend from Brown

One of the left’s biggest apologists, Rod Oram, has penned an article which basically forgives and encourages Len to borrow and spend and particularly for his train set and then at the end of the articles we find Oram is on the payroll.

So he gets hired by the ratepayers and the coincidently uses his weekly column to write nice things about his paymaster.

Ratepayers should be asking what this guy is paid and Fairfax should never have accepted the column and asked him to write about something else, in fact Fairfax should get a proper business columnist who actually knows something about business.

The fight is on for the future of Auckland. The choice is: a healthy one driven by ambition, or a dysfunctional one dragged down by a penny-pinching mentality.

The issue has come starkly to a head with the deliberations over the council’s 10-year budget. The decisions the council will make over coming months, guided by public opinion, will set Auckland’s course for years to come.

So far the pessimists have dominated the debate with their wildly inaccurate and irresponsible claims that the council’s finances are shambolic. Only savage budget cuts can save it, they say.

To set the record straight:

The council runs a budget surplus on operating expenses. In 2012/13 it was $246m.

Rates provide only half the revenues for the council’s $3 billion annual budget. The rest come from a variety of sources. 

To upgrade existing assets and to build new ones, the council borrows money. It is fair to spread the cost this way since the assets will benefit people for decades to come.

Auckland’s patchwork of previous councils was very stingy on debt, resulting in the city’s inadequate infrastructure and amenities. Worse, building things piecemeal and late was an inefficient and expensive way to work.

Under the new council structure, debt will have risen from $4b in 2010 to $7.2b next June.

The borrowing has funded projects in town centres around the city, in the city centre, on the waterfront and in transport that have measurably improved the city and its life.

Debt remains well within the limits the council has set itself. For example, interest this financial year will take 11 per cent of revenues and 19 per cent of rates, versus limits of 15 per cent and 25 per cent.

The council has an AA credit rating, better than all but one of our banks.

Yes the credit rating is good, but it isn’t based on assets like a bank is, it is based on the ability of the council to raise taxes…that is rates, the so-called assets of the city aren’t even taken into consideration…just the ability to increase rates to fund the debt.

Borrowing more based on a credit rating based on the ability of the council to levy higher rates is madness…the sort of madness only a loopy lefty would encourage.

 

– Fairfax


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