Council credit ratings

 Local councils are quick to crow about their AA credit ratings, as if it is an endorsement of their financial management. It isn’t. A credit rating measures the ability of a borrower to meet the financial obligations required of it under the terms of its loan agreements.  Typically, it is measured by an independent ratings company like Standard & Poor's, so lenders know their risk.

Local authorities are low-risk borrowers. Rarely do they default on their loan obligations because they have captive ratepayers to squeeze when things turn sour. Ratepayers must pay whatever is demanded of them - there is no right of objection. Their only recourse is to speak out against excessive rate increases and vote for candidates who commit to capping rate increases.

We believe the size of a council's rate increase is a better reflection of its money management skills. On that score, our local councils perform very poorly (Kaipara is the exception).