addicted gamblerGuy Burns, Deputy Chair of the Raumati Paraparaumu Community Board, is concerned that the Kapiti Coast District Council is planning to use borrowing to pursue investments in the open financial marketplace.

“I’m concerned loans of up to $30 million dollars will be used to invest in financial markets in the optimistic hope of some return. With KCDC debt levels running at record highs, such investment has the potential to create further debt for ratepayers and higher costs in the long-run.

“Approval for the establishment of two investment funds, to be initially funded by borrowing, was slipped into the recently approved Long Term Plan without public consultation and with very little background briefing information being provided to Councillors.

“I asked Councillors at the Operations and Finance Committee of 16 August 2018 [where a 32-page document advocating this was presented by council staff], if they have fully considered the risk to ratepayers if financial markets crashed. I hope Council will not proceed further with the establishment of the two investment funds.

“At a time when ratepayers are tightening their belts to meet skyrocketing rates bills and increasing living costs, it is disturbing Council is proposing to take risks on the financial market, by borrowing even more money on behalf of ratepayers. It is like a debt-ridden household increasing its mortgage to gamble on speculative markets.

“Back in the mid-1980s, many New Zealanders borrowed to invest in financial markets only to be badly burned by the 1987 share market crash. The world economy is facing uncertain times, domestic business confidence is faltering, and all investments carry risk. I would hate to see the KCDC going down a similar path”.

“KCDC should stick to the provision of core services and reject using further borrowing to carry out risky investments.”