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Central govt subsidies reduce local govt deficits in Sept. quarter

Wednesday 14th December 2011

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New Zealand local authorities’ finances improved in the three months to September, with Statistics New Zealand measuring an operating deficit improvement of $43 million due to a rise in grants, subsidies and donations.

Local authorities reduced their operating deficit to $6.8 million from $49.3 million in the June quarter.

The September quarter operating deficit was $72.4 million lower than the $79.2 million deficit in the September 2010 quarter.

Driving the deficit decrease was a 64 percent increase in current grants, subsidiaries and donations to $355.5 million from the September 2010 quarter, and the highest quarterly income from this source in the last six years, apparently reflecting government spending on infrastructure projects.

Grants and subsidiaries contribute to local and regional infrastructure such as roading, rail and bus services along with civil defense, sport, recreation and the arts.

Total rates income continued to rise, at $1.164 billion, a 7 percent increase from the same period last year. The authorities’ costs continued to rise in the September quarter, up 2.3 percent to $1.969 billion, with the increase attributed to general operating and a 2.9 percent increase in employee costs.


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