Taxpayers' Union joins debt debate

A lobby group set up to keep a check on government spending has waded into the debate about Napier and Hastings' respective council debt.

The Taxpayers' Union says its own figures show Napier Mayor Bill Dalton "is comparing apples with oranges" in numbers he released this week, which were also criticised as "miles off" by Hastings Mayor Lawrence Yule.

Taxpayers' Union executive director Jordan Williams said the organisation went through a rigorous process earlier this year to collect debt figures for all New Zealand councils.

It published the figures in online "league tables" which included other measures of local body performance.

"Mr Dalton's figures appear to be very different from the ones we ran past the council's finance team earlier in the year," Mr Williams said yesterday.

"Mr Dalton is right that Hastings has higher debt per ratepayer, but his figures are arguably misleading by failing to take into account differing accounting policies used by each council."

"On a total liabilities measure, the latest figures available show that Napier Council owes external parties $714 per ratepayer. Although Hastings District is higher, $2501, that is still less than the New Zealand average, $4386."

One reason for the difference is that Mr Dalton's numbers were extrapolated from the two councils' 2014-15 annual plans whereas the Taxpayers' Union survey was based on 2013-14 council annual reports.

Responding to Mr Dalton's figures this week, Mr Yule also argued a 2013-14 comparison was more accurate.

Mr Williams said the debate raised an issue the Taxpayers' Union had previously voiced concerns about: a lack of an agreed set of financial policies for local government.

"It's nuts that across the country councils have different accounting policies and different ways, for example, of valuing assets. Now that's stupid," he said.

"These councils all all do exactly the same stuff, just in different areas. Their accounting policies should be the same, so, for example, you don't get this sort of arguing between Napier and Hastings."

The debt issue is a sore point between Napier and Hastings councils because it is considered to be a significant issue in the amalgamation debate.

Opponents to amalgamation say the merger plans would mean Napier residents end up picking up the tab to service Hastings' higher debt.

Mr Yule has countered that concern by leading a drive to have council debt "ring-fenced" to be the responsibility of residents living in the areas where debts was raised.

He has asked the Local Government Commission to include ring-fencing provisions in a revised amalgamation proposal, due to be released sometime before the end of the year.

Mr Yule said this week he had also written to the commission asking them to compile independent comparative debt figures for the councils so residents had a clear picture of the debt situation.