Wednesday, March 17, 2010

Government gives Councils money, makes their balance sheet look better

The deficit this quarter is $45.4 million smaller than the September 2009 quarter deficit of $65.6 million
Oh good, Councils are being slightly less irresponsible and accumulating debt on our behalf slightly more slowly.

Local authorities recorded a seasonally adjusted operating deficit of $20.2 million in the December 2009 quarter

But there's still a little way to go.

The main contributions to the increase came from government grants and subsidies (up $26.7 million) [...]

Oh wait, that's not councils being more responsible, that's just government bailing them out so they can continue being irresponsible. Well that number is smaller, so they are still being $18.7 million more responsible, which is good.

and investment income (up $26.0 million). The rise in investment income was driven by an increase in revenue from dividends (up $27.9 million).

And the rest of their good fortune is down to things beyond their control (dividends). So the effect of their responsibility or otherwise on the operating deficit is $45.4m - $26.7m - 27.9m = -$9.2m, a further $9.2 million of debt per quarter, on top of what they were already doing. Of course this doesn't even include the increases in rates and their effect on society, which is what the problem really is.

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