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Government Finance Statistics (Local Government): Year ended June 2015
Embargoed until 10:45am  –  17 June 2016

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

See Introducing government finance statistics (published 2011) for more GFS information.

For detailed financial information on individual councils see the local authority financial statistics on Infoshare:

Subject category: Government finance
Group: Local authority financial statistics – LAF

Surplus increases slightly when operating income growth outpaces expenditure increase

GFS net operating balance for local government was a surplus of $1.0 billion for the year ended June 2015. The surplus was relatively consistent with 2014, showing a slight $0.1 billion increase. The increase was driven by a large growth in operating income (up 6.6 percent from 2014) outpacing the increase in operating expenses (up 6.2 percent).

Graph, Operating balance of local government, year ended June 2009 to 2015.

Taxation revenue was $5.4 billion for the year ended June 2015, up $0.3 billion (5.5 percent) from 2014. The majority of taxation revenue is from property rates – more than 92 percent annually. Auckland Council and Christchurch City Council made up more than half the growth in revenue from property rates. Water rates are treated as ‘sales of goods and services’ under the GFS framework.

Graph, Taxation revenue of local government, year ended June 2009 to 2015.

The increase in taxation revenue was consistent with a 3.9 percent price increase for residential local authority rates in the June 2015 year.

See: Consumers Price Index: June 2015 quarter (corrected) – table 8.02

Total operating expenses increased 6.2 percent, to $8.7 billion for the year ended June 2015. The large cumulative increase in total expenditure was spread across all expenditure types, with no key driver. Employee expenses and depreciation had a combined increase of $0.2 billion in 2015, which was consistent with previous years.

Net investment in assets up from 2014

The net acquisition of non-financial assets totalled $1.8 billion for the year ended June 2015, up $0.2 billion from 2014. Most councils reported an increase in the net acquisition of fixed assets.

Net borrowing was $0.8 billion for the year ended June 2015, up $0.1 billion from 2014. This showed the operating surplus was not enough to finance the net acquisition of non-financial assets, mainly additional infrastructure work (see 'net acquisition of fixed assets' in table 1 and 'additions in buildings and structures' in table 5). One way of financing large additions to assets is to borrow, which was reflected in increased loans on the balance sheet in 2015 (see table 2). 

Assets increase net worth 

As total assets grew more than liabilities in the year ended June 2015, the net worth of local government increased 3.2 percent, to $110.3 billion.

Total assets increased $5.5 billion (4.5 percent), to $125.9 billion in the year ended June 2015 – mainly due to a $4.3 billion increase in non-financial assets.

Non-financial assets can largely be broken down to increases in:

  • buildings and structures – up $3.1 billion. Christchurch City Council was the biggest contributor, with a $1.5 billion increase driven by both revaluations and new additions to roads, bridges, sewage, and wastewater infrastructure. Auckland Council was the other main contributor, with a $0.6 billion increase. Most councils reported increases in buildings and structures in 2015.
  • land – up $0.9 billion. This can be largely attributed to the revaluation of both parks and the land under roads in Auckland.
  • machinery and equipment – up $0.2 billion, mainly due to the acquisition of electric trains for Auckland Transport.

Graph, Contributions to change in non-financial assets of local government, year ended June 2009 to 2015.

Total liabilities increased $2.0 billion (14.8 percent) to $15.6 billion in the year ended June 2015. This reflected an increase in loans raised, which has been increasing since 2009. More than one-third of local authorities reduced their loans in 2015, but total loans were mostly driven by increases of $1.1 billion for Auckland Council and $0.4 billion for Christchurch City Council.

Graph, Assets and liabilities of local government 2015.

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

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