‘ODT’ editorial vital for Aurora debate
I congratulate the ODT for the Aurora to-sell-or-not editorial (11.6.24).
Dunedin City Holdings’ equity in Aurora assets is $229 million: asset value $805m, Aurora debt $576m. Proposed 10-year investment in asset repair and strengthening for existing load is proposed to be $800m.
The debt at 15.6.34 will be $1381m: Aurora debt $576m plus Aurora borrowings $800m. Aurora has only one source of income, line charges paid by consumers. Aurora is preparing a CPP to submit to the Commerce Commission for another line charge increase in 2026.
This line charge increase will have to absorb the recently announced transmission charge increase from Transpower. Line users will have to pay all this. Add to this $50m in deferred claimed income from line users as stated in Aurora’s ’23-’24 annual report. At some time Aurora will have to charge line users to recover this.
At present the Dunedin City Council debt is at $1.3 billion with a ceiling of $1.6b. A $300m buffer sounds infinitesimally small when numbers like $800m are being discussed.
To make my discussion above more accurate, debt and income values have to be clearly explained to the public.
For example, do these values include the costs of debt servicing and income from future line charges? What will the asset value be after 10 years? I doubt it will be $1381m.
When will the first dividend without debt be paid?
Let’s get the facts out there that non-accountants like me can understand. Independent simple reports published in the ODT are required. Public meeting with Aurora spin doctor presentations is not appropriate. Sell!
Burning questions
One of the burning questions in New Zealand is the extent to which housing has become a way to make profits versus a place to live. Airbnb is simply a home turned into a business.
Recently the government decided to make the mortgage interest paid on investor housing tax deductible. This is going to cost a massive $2.9 billion over four years in lost taxes. Investors also anticipate profits from untaxed capital gains.
A spokesperson for the Property Investors Federation stated that: "tax deductibility is a normal business way of operating".
Well, if investor housing is a business should it not be rated as commercial?
Commercial rates are much more than residential housing. Some increase in the rates on investor housing might go a long way to solving the council’s funding woes.
It would also help to reduce commercial rates by spreading it over a wider base and swing the pendulum away from investors, and towards those who want to purchase a house to live in.
The council should grab the nettle and ensure investors pay some share of the commercial rates in Dunedin.
Humans being humans
A lot has been written about the history and politics of the Israeli-Palestinian war. It’s complicated; the politicians have hidden agendas, money and power are involved. Too many people and not enough land and resources.
Both sides are guilty of cruelty, hatred, intolerance. Both sides have suffered extreme violence, grief, trauma and injustice. There is no right and wrong, good v evil.
Hamas fighters and Israeli soldiers are ordinary people. They all love their families, love their country; kill and fight for freedom, revenge and survival.
The old chestnuts in the fire, human nature doing what humans have always done.
Traffic islands and council ‘improvements’
The article in the regions section of the ODT today (14.6.24) regarding the Invercargill traffic island is timely.
It isn’t too long ago that a major road safety promotion urged drivers to indicate what their intentions were as they approached and entered traffic islands. It has become a joke now. The reason for this is very clear in the picture as the planting and build-up in the centre of the island totally blocks the view of indicator lights despite the best intentions of any driver.
Planting "cover" is on almost every island as part of beautification. What is best? Safety or aesthetics?
Not like Balclutha, yet
I refer to the article (ODT 14.6.24) about the main street upgrade in Milton.
How many times do the people of Milton’s retail community and wider catchment have to say to the present council stop spending so much money.
Cr Finch says the street looks shabby. Is that the public toilets, started by the council and not finished?
The public are happy with Milton as it is, with full shops, many choices of places to shop and eat.
I know as I work there six days a week. Take away our carparks and raise our rates to over 95% of what we are paying now and there will be nothing. Just like Balclutha.
Belief revealed
Peter Matheson’s phrase "the covenantal dimension to the Treaty" (ODT letters 13.6.24) betrays his belief that it is some kind of sacred text, evangelised by dames of the realm. His statement that Harry Love "has done us a service" by "articulating so well the difficulties of some Pākehā minds in relationship to bicultural issues" is condescending, if not insulting.
Endorsement off beam; live within means
I am amazed that Civis as a learned commentator (ODT 15.6.24) manages only to offer endorsement for the Mayor of Central Otago Tim Cadogan’s suggestion for ratepayers to commit to the horrendous option of a reverse mortgage to meet the rating increases proposed to deliver the perceived essential services to the community who employ him and all council staff.
After all the ratepayers are the employers providing the funds for the services and the council are the employees to put the best deal with those funds.
The mayor/CEO tells us that their first rate increase calculation demanded a 45% increase. They and their employees’ "hard work" managed a $10 million saving, which reduced the rate to 25%, but they did not inform their employers what services had been sacrificed.
The employees identified further savings to get the increase to 18% for some and 33% for others but again no resultant service losses described.
The question the rate-paying employers wish to know is what services would be further lost if they supplied funds for a 5% or 10% rate increase? After all they are the ones that are making the final choice not the employees.
Every householder and business owner is living within their limits. The government is following this strategy to get its ministries living within the country’s means.
With the knowledge of what can be delivered with an acceptable rate increase supplied by the employers then decisions can be made. If the employees can’t supply the information then the employers will have to employ people who can.
Address Letters to the Editor to: Otago Daily Times, PO Box 517, 52-56 Lower Stuart St, Dunedin. Email: editor@odt.co.nz
