Auckland councillors have narrowly voted not to rein in spending ahead of a possible credit downgrade by a major ratings agency.
Standard & Poor's says the council's draft long-term budget shows debt compared with income will rise in two years to reach the threshold for a one-notch downgrade.
A final decision on the downgrade will be made early in 2012.
One councillor, George Wood, told the council's meeting it should cut its costs and act with prudence to try to avoid a downgrade but his amendment to the draft budget was defeated, 11- 9, when it was put to the vote.
Auckland Council chief executive Doug McKay says the negative watch notice was issues at a time when a number of businesses were suffering downgrades.
