We forecast Greater Wellington's operating margins will improve in each of the next three years following an 8% operating deficit in fiscal 2024 (ending June 30, 2024). Driving the improvements will be large, planned increases in council property rates and public transport fares.
The council's large infrastructure requirements will contribute to bigger overall cash deficits and higher total tax-supported debt than those of all 'AA+'-rated peers globally.
We affirmed our 'AA+/A-1+' long- and short-term issuer credit ratings on Greater Wellington.
The negative outlook on the long-term rating reflects downward pressure on institutional settings for New Zealand's local government sector and our view that narrowing of Greater Wellington's budgetary deficits could be slower than our expectations over the next two years.
