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Government Finance Statistics (Local Government): Year ended June 2012
Embargoed until 10:45am  –  26 July 2013
Commentary

This release analyses local government in New Zealand, using government finance statistics (GFS) concepts and principles.

See Introducing government finance statistics for more GFS information.

Increase in revenue greater than increase in expenses

Total operating revenue was $8.8 billion for the year ended June 2012. This is a 6.1 percent increase from 2011. The increase was mainly driven by an increase in capital grants received (up 36.2 percent). Capital grants captured insurance recoveries by Christchurch City Council from the Canterbury earthquakes. Increases in taxation revenue (up 4.0 percent) and sales of goods and services (up 9.4 percent), also contributed to the overall increase in operating revenue.

 Graph, total operating income and expenses, year ended June 2009 to 2012.

Revenue from taxation totalled $4.7 billion for the year ended June 2012, up 4.0 percent on 2011. The increase was almost solely driven by an increase in taxes on property, up 4.3 percent. All other categories reported only minor changes.

See Local Authority Financial Statistics: Year ended June 2012 for more information on taxation revenue, including a breakdown by region.

Total operating expenses increased 4.4 percent, to $8.2 billion for the year ended June 2012. Increases in most expenditure categories, particularly purchases of goods and services (up 7.4 percent) and employee expenses (up 3.0 percent), contributed to the overall increase. Increased activity by Auckland Council and Auckland Transport, following the merger of the Auckland councils in 2010, contributed to the goods and services rise. This is reflected in an increase in expenditure on economic affairs (see table 3), which includes expenditure on transport-related activities.

Graph, operating expenses, year ended June 2009 to 2012.

Net borrowing position continues to improve

The net borrowing position was $0.6 billion for the year ended June 2012, down from $0.9 billion in 2011. This follows a pattern of gradual improvement. The net borrowing position has improved $0.5 billion from the year ended June 2009 to June 2012. The improvement in the borrowing position in 2012 was driven by an increase in the net operating balance, up $0.2 billion to $0.5 billion. A fall in the net acquisition of non-financial assets ti $1.1 billion (from $1.2 billion in 2011) also contributed to the improvement.

Graph, net balances, Year ended June 2008 to 2012.

Assets and liabilities increase

At 30 June 2012 local government's total assets were $111.1 billion (up 2.3 percent). This involved a 4.5 percent increase in financial assets and a 2.0 percent increase in non-financial assets. The increase in non-financial assets was driven by a 3.7 percent increase in buildings and structures, which was partly offset by disposals of $0.8 billion in buildings and structures (up from $0.5 billion in 2011). The rise in disposals came from the completion and transfer of the Forsyth Barr Stadium in Dunedin to a council-owned market entity, which is outside the scope of GFS.

The value of land decreased due to some valuation changes by Hamilton City Council and Tauranga City Council, resulting from new valuations in July 2011.

The net increase in non-financial assets (excluding inventories) of $1.9 billion between 30 June 2011 and 30 June 2012 can be attributed to:

  • additions ($3.7 billion)
  • disposals ($1.1 billion)
  • depreciation ($1.6 billion)
  • valuation and other economic flows ($0.8 billion).

Graph, contribution to change in non-financial assets, year ended June 2009 to 2012.

Liabilities increased 14.0 percent, to reach $12.1 billion at 30 June 2012, reflecting an increase in loans raised (up 15.9 percent). This compares with liabilities of $10.6 billion at 30 June 2011.

The net worth of local government at 30 June 2012 totalled $99.0 billion, a 1.1 percent increase from 30 June 2011.

Graph, assets and liabilities, year ended June 2009 to 2012.

For more detailed data, see the Excel tables in the 'Downloads' box.

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