Palmerston North City Council’s 2015/2025 Long Term Plan shows forecast borrowings of $200 million by 2020/21 with forecast interest costs of over $12 million per annum for years thereafter.
This is a 50 per cent increase over 2015/16 forecast interest costs of $8 million.
My question is where are the funds coming from and where is the interest paid going to?
Of the five major banks in New Zealand, only one is New Zealandowned. The other four major banks are Australian-owned. In 2014/15 these four major banks made a record $4.6 billion net profit, with nearly $4 billion paid in dividends to shareholders overseas. Even if the funds come from the Local Government Funding Agency, their funds in turn are sourced nationally, not locally, and are in large part sourced from these banks.
With councils so intent on taxing ratepayers and funnelling ratepayers’ money into ‘‘community’’ projects, why are they not concerned that interest costs are not funnelled back into the local community? Unlike other payments to contractors, which should support local firms, but often do not, with the fees spent locally, interest payments are not linked to a local service.
Should not council borrow locally? Ratepayers might be interested in receiving interest and becoming an integral part of growing their community. ‘‘The rich ruleth over the poor, and the borrower is servant to the lender.’’ (Proverbs 22:7) By borrowing we become a servant to someone.
Who do you want to serve? Is anyone really ‘‘interest-ed’’? Ken Riddle, Shannon