Financial forecasts

Ten-year financial forecast (with inflation)

Ten-year financial forecast

This graph outlines financial performance and capital expenditure over the next ten years for Greater Wellington.

Key points to note are:

• Capital expenditure and transport investment, primarily rail rolling stock, peaks at $132 million in 2009/10
• Other operating revenue increases and decreases with the expenditure on public transport infrastructure, because the majority of this is funded by government grants
• Debt rises to $172 million over the period as it is required to fund Greater Wellington's share of public transport infrastructure and other capital expenditure
• Regional rates are projected to rise to $90 million. The increase is mainly to fund the purchase of public transport infrastructure
• The water supply levy increases from 2007/08 onwards to fund a new water source and to cover increasing costs.

Please note that these figures exclude GST.

The large operating surpluses in 2006/07 to 2011/12 are because government grants are accounted for as income. A significant portion of these grants is used to fund our capital purchase of passenger transport infrastructure. The new assets are then depreciated over their expected life, resulting in deficits in future years.

Ten-year rates (with inflation)

Ten-year rates

This graph shows the regional rates requirement for each of Greater Wellington’s groups of activities over the next ten years. Regional rates include the general, regional transport, river management, stadium purposes, bovine tb and Wairarapa schemes rates, but exclude the water supply levy.

Key points to note are:

• Non-transport rates are fairly flat over the period with the exception of flood protection where increases are due to continued expenditure in Hutt Valley and Wairarapa
• Increases in transport rates over the period are to fund investment in public transport infrastructure.

Total regional rates will increase by 10.7% in 2007/08 to fund a number of public transport projects. In the proposed LTCCP, this increase was only 6.2%. The reason for the higher percentage increase in the final Plan is a result of a better understanding of how Land Transport NZ will apply the additional Crown funding that was announced in January 2005.

The final Plan assumes that this additional Crown funding will be available to cover 50% of the local share of the required expenditure. This has the effect of increasing required rates in the early years of the Plan, but decreasing them in later years.

Please note that these figures exclude GST.

Impact of inflation on forecast rates

Impact of inflation on forecast rates

This graph compares the ‘rates with inflation’ in the Long-term Council Community Plan to ‘rates without inflation’.

Key points to note are:

• Inflation, over the period increases rates by $18.1 million
• Two-thirds of this increase comes from transport rates
• The average inflation increase per year is 3%.

Please note that these figures exclude GST.