Diocese considers options to beat debt

The Otago-Southland Roman Catholic diocese is not in financial crisis despite being several million dollars in debt, a spokesman says.

"We are asset rich, cash poor - and in debt," diocese general manager Stuart Young said.

The situation may force the diocese to borrow money from other regional counterparts to pay off debt, he said.

"We are the worst placed diocese in the country, but we won't be approaching other diocese until we get our own house in order."

Mr Young declined to reveal the amount of the debt but the Otago Daily Times understands it is more than $2 million.

"Everything is under control. It is not a crisis, but if we don't acknowledge we are living beyond our means and stop relying on the banks we will never get into a situation where we can't live without the bank."

Faced with declining revenue from the collection plate and expenditure nearly twice its income, the diocese would embark on a five-year plan to reduce debt, he said.

The debt incurred by the diocese dated back to the 1940s, when the church embarked on a programme of building integrated schools.

It had nothing to do with payouts for sexual abuse, he said.

Mr Young was employed last August.

Part of his brief was to reduce historic debt.

"It is a big challenge. Our interest costs are at the stage where we need to take action, but it's certainly not a case for panic," he said.

Parish leaders were told of the stark reality of the situation at a meeting last month.

The diocese will reduce funding to Catholic Social Services, which provides social and counselling services to people throughout Otago and Southland.

The cut would take effect next financial year.

The diocese would also look at rationalising assets.

"Take South Dunedin, for example.

They have four churches in the area and they may decide they only need two.

We need to sit down and find the right pastoral and financial balance."

The diocese could also earn extra income by encouraging some of the estimated 40,000 people in Otago and Southland who identified themselves as being Catholic to invest in the Catholic Development Fund, Mr Young said.

Other denominations reported their finances were in a healthy position when contacted yesterday.

The Presbyterian Synod of Otago and Southland was in a strong financial position, thanks to the foresight of the original settlers who established the Otago Foundation Trust, synod executive officer Fergus Sime said.

The Otago-Southland Anglican Diocese was not in debt, but some smaller parishes were struggling financially, manager Bernie Crayston said.

Anglican churches in Makarewa and Wyndham were sold off this year as the local parishes decided against continuing the church.

"It is up to the individual parish to decide their future," he said.

The Methodist Church of New Zealand Otago and Southland Synod had no debts and was well supported, superintendent Stuart Grant said.