1 00:00:00,120 --> 00:00:02,440 Speaker 1: New idea for councils around debt. If you're in a 2 00:00:02,520 --> 00:00:05,080 Speaker 1: high growth area, you will be able to borrow more 3 00:00:05,080 --> 00:00:07,400 Speaker 1: the local government. New Zealand President Sam Broughton's with us 4 00:00:07,400 --> 00:00:08,400 Speaker 1: on the Sam Morning to you. 5 00:00:08,960 --> 00:00:09,600 Speaker 2: Yeah, good morning. 6 00:00:09,600 --> 00:00:12,520 Speaker 1: Make the criteria for high growth. I get it. But 7 00:00:12,640 --> 00:00:14,920 Speaker 1: when you're forecasting out a good number of years, is 8 00:00:14,920 --> 00:00:17,280 Speaker 1: that watering into the world of guesswork. 9 00:00:18,400 --> 00:00:20,279 Speaker 2: Well, I think it's important to look at what the 10 00:00:20,320 --> 00:00:24,000 Speaker 2: government's responding to, and that's the need to address rates, 11 00:00:24,040 --> 00:00:27,000 Speaker 2: affordability and think about the infrastructure deficit that New Zealand 12 00:00:27,000 --> 00:00:30,360 Speaker 2: currently has. So lifting the threshold to three hundred and 13 00:00:30,400 --> 00:00:33,320 Speaker 2: fifty percent will make a material differense for many councils 14 00:00:33,320 --> 00:00:38,519 Speaker 2: and as a good news story and we boocom the Yeah, it's. 15 00:00:37,640 --> 00:00:39,199 Speaker 1: A good news story because if you borrow more to 16 00:00:39,200 --> 00:00:41,280 Speaker 1: build a bridge or a pipe or whatever, that's brilliant. 17 00:00:41,280 --> 00:00:43,920 Speaker 1: But then councils tend not to pay it back and 18 00:00:43,960 --> 00:00:45,640 Speaker 1: then they reach their limit and then the next thing 19 00:00:45,680 --> 00:00:47,720 Speaker 1: you're doing is talking about increasing the limit, which is 20 00:00:47,800 --> 00:00:48,800 Speaker 1: very American, isn't it. 21 00:00:49,560 --> 00:00:51,159 Speaker 2: Well, it does still have to be paid back, and 22 00:00:51,200 --> 00:00:53,200 Speaker 2: I think that's a key thing for New Zealanders. To understand. 23 00:00:53,280 --> 00:00:55,440 Speaker 2: We want better infrastructure, we are going to have to 24 00:00:55,480 --> 00:00:57,960 Speaker 2: pay for it. But this infrastructure lasts, you know, fifty 25 00:00:57,960 --> 00:00:59,960 Speaker 2: to one hundred years, and so being able to borrow 26 00:01:00,160 --> 00:01:02,920 Speaker 2: over a longer period of time is important rather than 27 00:01:02,960 --> 00:01:05,440 Speaker 2: just today's rate payers having to fund infrastructure that's going 28 00:01:05,480 --> 00:01:06,959 Speaker 2: on the ground the last a long time. 29 00:01:07,120 --> 00:01:09,320 Speaker 1: Can you hate name me any councils who pay back 30 00:01:09,360 --> 00:01:09,720 Speaker 1: their debt. 31 00:01:10,880 --> 00:01:13,440 Speaker 2: Yeah, my council pays back. It's debt. That's part of 32 00:01:13,680 --> 00:01:15,840 Speaker 2: part of being the responsible governor is making sure that 33 00:01:15,880 --> 00:01:17,479 Speaker 2: we understand your your. 34 00:01:17,440 --> 00:01:19,200 Speaker 1: Counsel that you're one of the hut councils here. 35 00:01:20,000 --> 00:01:21,560 Speaker 2: No, I'm a mayor of Celn District. 36 00:01:21,720 --> 00:01:25,160 Speaker 1: My apologies. So you've paid back how much in terms 37 00:01:25,160 --> 00:01:26,720 Speaker 1: of principle as opposed to interest. 38 00:01:28,080 --> 00:01:30,520 Speaker 2: So we take our debt over different profiles of time. 39 00:01:30,520 --> 00:01:33,319 Speaker 2: It depends on what we're borrowing for and we pay 40 00:01:33,360 --> 00:01:38,319 Speaker 2: that back according to LGFA role. So that means obviously 41 00:01:38,360 --> 00:01:40,360 Speaker 2: there's quite a lot of interest in the first parts 42 00:01:40,400 --> 00:01:43,560 Speaker 2: of loans and it's similar to bankle ending. But we 43 00:01:43,600 --> 00:01:45,560 Speaker 2: make sure that over time we've paid back the debt 44 00:01:45,640 --> 00:01:47,600 Speaker 2: and we profile that over our ten year plan. 45 00:01:47,800 --> 00:01:49,120 Speaker 1: Is your debt going down or not. 46 00:01:50,040 --> 00:01:51,680 Speaker 2: It will go down over ten years. But at the 47 00:01:51,680 --> 00:01:54,240 Speaker 2: moment we're a high growth council will be borrowing more over. 48 00:01:55,120 --> 00:01:57,080 Speaker 1: So you're not really paying a back, Sam, You're borrowing 49 00:01:57,080 --> 00:01:58,920 Speaker 1: more as you pay it back. You borrow more, is 50 00:01:58,960 --> 00:01:59,520 Speaker 1: what I'm saying. 51 00:01:59,600 --> 00:02:02,680 Speaker 2: Yeah, yes, well, and in a high growth space purpose 52 00:02:02,720 --> 00:02:04,440 Speaker 2: and you're going to have to borrow more to fund 53 00:02:04,480 --> 00:02:06,440 Speaker 2: the infrastructure that growth requires. 54 00:02:06,240 --> 00:02:09,400 Speaker 1: My point being, are we not simply getting ourselves as 55 00:02:09,440 --> 00:02:12,079 Speaker 1: much as we all agree we need some infrastructure. That's true, 56 00:02:12,400 --> 00:02:15,440 Speaker 1: but are we simply not getting into more and more 57 00:02:15,600 --> 00:02:17,880 Speaker 1: and more debt and inevitably that's going to bite us 58 00:02:17,880 --> 00:02:18,280 Speaker 1: in the bump. 59 00:02:19,560 --> 00:02:21,760 Speaker 2: Yes, we are borrowing more and more debt and we 60 00:02:21,840 --> 00:02:24,280 Speaker 2: have to because rate paths currently can't afford to fund 61 00:02:24,320 --> 00:02:27,160 Speaker 2: the infrastructure deficit we're in. So at the moment, council's 62 00:02:27,160 --> 00:02:31,120 Speaker 2: got to options rate or borrow, and borrowing has been 63 00:02:31,160 --> 00:02:33,680 Speaker 2: opened up, so that's good. We're looking for new tools 64 00:02:33,680 --> 00:02:36,840 Speaker 2: from the governments to fund local government. Yesterday we launched 65 00:02:36,880 --> 00:02:39,440 Speaker 2: twenty five new tools and those would help the rating 66 00:02:39,440 --> 00:02:43,560 Speaker 2: impact we could have gest on new builds returns, mineral 67 00:02:43,639 --> 00:02:46,920 Speaker 2: extraction royalties returned to local governments, local settings of fees 68 00:02:46,960 --> 00:02:49,760 Speaker 2: and charges without legislation, those things would help the rating 69 00:02:49,760 --> 00:02:51,359 Speaker 2: impact rather than needing to borrow. 70 00:02:51,440 --> 00:02:54,520 Speaker 1: All right, man, appreciate it very much, Sam Broughton, the LG. 71 00:02:54,680 --> 00:02:56,400 Speaker 1: Wonder who's the guy I was thinking of on the 72 00:02:56,440 --> 00:02:59,120 Speaker 1: hut then? Who used to be with the local government? 73 00:03:00,040 --> 00:03:02,679 Speaker 1: Am I just literally making things up? 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