BOR­ROW­ING BLUES

The Tribune (NZ) - - CONVERSATIONS -

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

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