Climate change is top priority for new government, LGNZ says

Press Release – BusinessDesk

Climate change is top priority for new government, LGNZ says

By Jonathan Underhill

Sept. 12 (BusinessDesk) – Local Government New Zealand has reiterated its concerns about the impact of climate change, saying the incoming government needs to provide a clear statement on responsibilities for adapting to higher temperatures, rising sea levels and more violent storms.

The body representing New Zealand’s 78 local, regional, and unitary authorities says its members “are at the front line of climate change adaptation and have a role to play in mitigation” but it also says central government needs to prioritise a plan for a low carbon and resilient New Zealand, including fiscal responsibility.

“There is no more time for inaction. We need whoever is in government after 23 September to set some firm goals and strategies for both mitigating and adapting to climate change,” said new LGNZ president and Dunedin Mayor Dave Cull. “The incredible storms seen in Texas and the Caribbean in recent weeks should be taken as a warning to us all. Natural hazards and climate change impacts pose an unprecedented threat to our natural and built environment.”

Calling for action on climate change has been a consistent refrain from local authorities. At the LGNZ conference in July, 39 mayors called for an ambitious central government plan to transform New Zealand into a low-carbon economy and prepare for impacts such as inundation from rising sea levels. Last December it called climate change a major issue facing councils and communities.

A National Geographic tool released with its documentary Before the Flood shows the Wellington suburb of Miramar, southern suburbs of Dunedin and large swathes of Christchurch and Napier could be inundated by a 2.5 percent increase in global temperatures.

The briefing in Wellington also included an update from the Local Government Funding Authority, which sells bonds on behalf of local authorities. In the year ended June 30, the LGFA accounted for 83 percent of all council borrowing. Total LGFA lending to the sector stood at $8.1 billion as at Sept. 4, up $464 million from May. Of that, $303 million was short-term lending to 23 councils and $7.76 billion was long-term and lent to 52 councils, it said.

Of investors in LGFA bonds, those based offshore rose 1.4 percent in the past three months to 31.1 percent, ranking second after banks who owned an unchanged 34.2 percent and domestic institutional investors with 30.7 percent, down 1.4 percent.

LGFA chair Craig Stobo said growth in offshore investors “defies the trend” for central government debt in New Zealand and Australia and was a sign of the positive sentiment toward local authorities and the funding body.

“A Japanese life insurance company wouldn’t do due diligence on Waitomo Council but they will lend us money,” Stobo said.

Of the 38 councils that borrowed long-term funds from the LGFA in 2016-17, Christchurch City was the biggest at some $325 million, which Stobo said largely reflected debt refinancing. Auckland ranked second at about $275 million.

A consolidated balance sheet of LGFA members, as at June 2016 showed a negative net operating balance of $72 million as operating income of $7.12 billion was just eclipsed by $7.19 billion of operating expenses. The largest expense was the purchase of good and services at $2.7 billion, which reflected the extent to which councils are outsourcing.

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