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A lazy balance sheet? The city council’s debt-based economics
by Bryan Pepperell
The city council’s chief executive officer yesterday suggested that the council has a lazy balance sheet. That has caused me to reflect on the state of our books:
Our Closing Gross Borrowing for 2013/14 is $397,513,000.00
Our total liabilities 2013/14 are $539,272,000.00
We have revenue from rates of 2013/14 $233,567,000.00
Other income brings our 2013/14 revenue up to $420,262,000.00
Our total expense 2013/14 is $388,242,000.00
The Wellington City Council has a borrowing target of of 105 percent of operating income.
For a household, that might work as long as income holds up. But if there is a loss of income then it spells disaster. It’s called debt based economics.
Don’t kid yourself. The Council is in trouble, like all economies that are debt based.
Bryan Pepperell is a Wellington City Councillor
Hold up Bryan, hold up! Methinks you’ve got something wrong with those numbers. Assuming that the m stands for millions, then you have a figure of spending $388,242 million. Which, using the common system for numbering, means 388 thousand million, ie 388 billion. I know you City Councilors down there are profligate spenders, but I don’t think any of you can spend 388 billion per year. Want to give us a revised set of figures?
Yes I’ve added 000 and dropped the m. Cheers
Bryan