Local Authority Statistics (quarterly): General Information
Local Authority Statistics (quarterly): General Information
Statistics in this release are based on data collected in the quarterly Local Authority Survey. Since 1 November 2010, we have collected information about New Zealand's 11 regional councils and 68 territorial authorities in the quarterly Local Authority Survey. The survey covers all regional and local council responsibilities and functions.
All local authorities are included in the quarterly Local Authority Survey as well as the annual Local Authority Census. Local authorities are city councils, district councils, unitary authorities, and regional councils. Unitary authorities are city and district councils that also perform the functions of a regional council.
As of the March 2014 release, we changed our collection method for the Local Authority Survey. It used to be a full census, but is now a part-survey, part-modelled collection. There are 79 local authorities (78 councils, plus the Auckland Transport Authority). We survey 38 out of these 79, and model the rest.
We determined which councils would be surveyed and which would be modelled by clustering the councils based on four variables from the survey. These variables are sales, purchases, employee costs, and depreciation. The smaller local authorities were closely clustered, meaning they were similar in relation to these variables. We determined the split for which local authorities would be modelled based on how similar the councils were in the cluster.
The quarterly operating result included in this release excludes non-operating items such as extraordinary gains or losses, and asset revaluations. These items are usually identified when the annual results are released. Data about council-controlled organisations (formerly called local authority trading enterprises) is not included in this release.
Accuracy of the data
Accounting procedures vary among the local authorities and it can be challenging to produce a set of comparable statistics. However, we do not expect differences in accounting procedures to materially affect any statistics that we produce. Each quarter, revisions may be made to previously published series as new data becomes available. We generally limit changes resulting from the inclusion of new and revised annual information to once a year, which coincides with each June quarter release.
We have seasonally adjusted all series in this release except dividends, interest received, interest paid, total investment income, and depreciation. Prior to the September 2019 quarter interest received and interest paid were seasonally adjusted, and all rates was not seasonally adjusted. In September 2019 a technical review of all series was carried out. Based on the review, several changes to seasonal adjustment were implemented in the September 2019 quarter:
- All rates is now seasonally adjusted, as it displays a seasonal pattern from 2011 onwards.
- Interest received and interest paid are no longer seasonally adjusted, as they do not display a stable seasonal pattern.
- Regulatory income and petrol tax needs further review when more data is available, to fully assess the impacts of Auckland's regional fuel tax (introduced in September 2018) on the seasonality of the series.
From March 2016 to the June 2019 release, all series except rates, dividends, total investment income and depreciation were seasonally adjusted. Prior to the March 2016 release, total investment income was also seasonally adjusted. For the March 2016 quarter release, a technical review of all seasonally adjusted series was carried out. Based on the review, several changes were implemented in the March 2016 quarter:
- Total investment income was no longer seasonally adjusted, as it did not display a stable seasonal pattern.
- Total operating income changed from being an indirect seasonal adjustment to a direct seasonal adjustment. A direct seasonal adjustment produces a higher quality seasonal adjustment than the indirect seasonal adjustment for total operating income. As a result of this change in methodology, seasonally adjusted total operating income is no longer the sum of the income components.
From the beginning of the series until March 1996, both interest income and dividend income were seasonally adjusted. After March 1996, dividends became volatile due to large and irregular payments of dividends to local authorities from council-controlled organisations, and seasonal patterns were no longer apparent.
New items of income or expenditure that are included by local authorities can impact seasonal adjustment when the seasonal component of the data is unknown. With the introduction of Auckland’s regional fuel tax (RFT) in the September 2018 quarter, we have seen greater volatility in the seasonally adjusted regulatory income and petrol tax series. We expect this volatility to continue for a number of quarters until we have collected sufficient data to understand any changes in the seasonality of this series resulting from the introduction of the RFT.
We use X-13-ARIMA-SEATS Version 1.1 to seasonally adjust our statistics. This seasonal adjustment package has been developed by the U.S. Census Bureau. We upgraded from X-12-ARIMA to X-13-ARIMA-SEATS for the June 2014 quarter to comply with international best practice.
The aim of seasonal adjustment is to eliminate the impact of regular seasonal events on the time series and make data for adjacent periods more comparable. All seasonally adjusted figures are subject to revision each quarter.
Consistency with other periods and statistics
Unlike local authority financial statistics for the year ended June 2018 (available on Infoshare, subject category Government finance, Local Authority Financial Statistics – LAF), this release does not include estimates of what local authorities earned and spent for non-operating and capital transactions. It also does not include information on individual local authorities. This release also excludes income and expenditure information for market-orientated council-controlled organisations such as airports and water providers.
Quarterly results are reconciled to annual values provided by the annual Local Authority Census (LAC) and validated against annual reports. Each year, we publish annual local authority financial statistics based on the LAC. Results presented in this release are provisional for recent quarters and the most recent annual result, until these annual reconciliation and validation processes are complete.
Local authority statistics include ongoing expenditure related to the 2010 and 2011 Canterbury earthquakes. It is not possible in the quarterly statistics to separately identify the effect of the earthquakes. The effects are better reflected in the more detailed local authority financial statistics collection (available on Infoshare, subject category Government finance, Local Authority Financial Statistics – LAF). These statistics use local authorities' audited annual accounts. The latest local authority financial statistics information was published on 22 May 2019. The Government Finance Statistics (General Government) is an economic analysis of local, central, and general government financial activity in New Zealand, based on concepts and principles developed by the International Monetary Fund. The Government Finance Statistics (GFS) uses LAC data to compile macro statistics for the local government sector which are consistent with the local authority finance statistics. Slight deviations between the two are expected due to the economic principles adopted in the GFS framework. The Quarterly Local Authority Survey (QLAS) is used in GFS to create provisional estimates for the latest published year in the absence of LAC data. The latest GFS information was published on 21 November 2019, for the year ended June 2019.
How creating the Auckland Council affected local authority statistics
From December 2010, we have been unable to report results for the eight former councils in the Auckland region and instead reported one result for the Auckland region (Auckland Council, which was established on 1 November 2010). The eight councils that were replaced by the new Auckland Council were Auckland City Council, Auckland Regional Council, Franklin District Council, Manukau District Council, North Shore City Council, Papakura District Council, Rodney District Council, and Waitakere District Council.
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