Einstein may not have actually said this, but it is no less true.
Yesterday the basis for our interest rates, the Official Cash Rate went up again by 50 basis points to 2.5%, the 6th rates rise since October last year and the steepest and quickest climb in the OCR’s 23 year history. Another extra 100 basis points increase, 3.5% is expected by Christmas. Banks typically add 4% to our mortgage lending.
Every Annual Plan for years and at other opportunities I have debated against increasing DCC debt because long low interest rates could only go one way. DCC Group Debt [Council and Council Companies] is out of control, increasing more than $100 million every year.
The obvious solution is to wipe or defer ‘nice-to-haves’, like more cycleways [$32 million agreed recently] George st to the Exchange ‘upgrade’ [$60 million] Cycleway upgrades around the University [$20 million] ‘Park and Ride’ carparks in Mosgiel and Burnside [$10 million] traffic diversion away from the One-Way near the new Hospital [$16 million] new Moana Pool hydroslide [$4 million?] new mid-sized Theatre [$17 million], that is $159 million just for starters…