Can Christchurch Council make hard decisions?

Stuff reports:

The is facing a cost over-run of $534 million which could balloon even higher if it fails to secure $1 billion in insurance payouts.

The grim financial picture was revealed this afternoon as the council finally released the findings of an independent audit of its finances conducted by KordaMentha, an advisory firm specialising in insolvencies and corporate recovery. …

The report has been labelled a worst case scenario by others in this story. What it is really about is trying to get more money out of taxpayers, rather than ratepayers:

Green MP Eugenie Sage said it was time the council and the Crown renegotiated their earthquake rebuild cost-sharing agreement.

“It’s clear that the Christchurch City Council is not in the financial position to pay all of its share for the big-ticket items being pursued by the Government, or to borrow more,” said Sage.

Labour MP Ruth Dyson said the Government had to acknowledge the city’s financial position had changed.

“We need a genuine partnership between central and local government if our recovery is going to be the best it possibly can be. We need to hear that commitment from John Key now.”

My answer is simple. No.

An agreement  was signed and agreed to after great negotiation last year. Taxpayers have been very generous with Christchurch, pumping billions into it. But the Council needs to now stand on its own two feet, and start making some hard decisions.

Finance committee chairman Cr Raf Manji said the council would need to take decisive action to put itself on a sound financial footing for the future.

“We have a strong balance sheet to help us weather this kind of financial challenge. KordaMentha makes it clear that there is no single simple solution but rather a number of levers that will need to be be used.

“Hard choices will need to be made and we will be relying on the residents of the city to engage with the council as it makes these decisions and charts a prudent and sustainable course forward,” Manji said.

The Council has a number of routes it can take:

  • Reduce the rebuild costs – the council needs to consider not doing some of the work planned.
  • Negotiate for the Crown to pay more money or for the council to pay less money for the anchor projects.
  • Increase the council’s core revenue through rate rises.
  • Cut spending in other areas such as the capital programme.
  • Improve the performance of council owned assets and investments, or sell them.

The left will ignore four of those options and just call for taxpayers to pay more. Real leadership would be making the hard decisions yourself.


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