$2.8b cuts to cap city rates touted

Auckland Mayor Len Brown acknowledged that difficult decisions lay ahead. Photo / Greg Bowker

Plans for new libraries, pools and playing fields face budget axe or deferral but CBD rail link stays on track.

Planning is under way to slash $2.8 billion of new spending at Auckland Council to control soaring debt and rates while pushing ahead with the $2.86 billion City Rail Link.

The fiscal shake-up will come at a cost to core council services, such as new libraries, swimming pools and playing fields, which face being pushed back or canned altogether.

An early start to electrification of rail to Pukekohe now appears highly unlikely and bus and ferry improvements could take a back seat to the rail link.

The Herald has obtained a copy of a confidential briefing by council officers to councillors, which outlines four scenarios for next year's 10-year budget review.

The first two are based on updating the first 10-year budget and the second two are based on locking in rates at 3.5 per cent and 2.5 per cent over the next decade by cutting capital spending by $2 billion and $2.8 billion respectively.

One source said the preferred scenario was setting rates at 2.5 per cent and cutting new spending by $2.8 billion. This is in line with Mayor Len Brown's election promise to hold rates at no more than 2.5 per cent during his second term.

The looming cuts come after four years of big spending from Mr Brown, who doubles as City Treasurer. Debt has increased by 87 per cent from $3.9 billion to $7.3 billion and households have received cumulative rates increases of up to 38 per cent.

Officers have warned the mayor that if he wants to hold overall rates increases to 2.5 per cent, he will have to cut $2.8 billion from the projected $18 billion capital budget over the next decade.

The warnings have not shaken Mr Brown's commitment to fully fund the council's half-share of the $2.86 billion City Rail Link and proceed with major projects in the central city and South Auckland.

The financially strapped council has considered privatising public space at Queen Elizabeth Square and Queens Wharf for commercial buildings.

Mr Brown acknowledged that difficult decisions lay ahead and some people would be disappointed once the council had gone through an exhaustive analysis of its budgets.

He said there was no public appetite for large rate or debt increases, saying his primary focus was to prioritise and match the budget to the Auckland Plan - a 30-year blueprint for the city - which has the City Rail Link as the number-one priority.

Budgets coming under intense scrutiny include $122 million for new libraries, $190 million for developing and upgrading sports fields and $38 million for arts and cultural facilities.

Mr Brown hinted at "significant deferrals around timing", singling out the electric trains to Pukekohe; and he said it might be time to "lean back" on spending on libraries and sports fields after several years of significant investment.

The mayor will present his first proposal for the 10-year budget on August 28.

He remains committed to starting construction of the City Rail Link in 2016.

New 10-year budget

At risk
*New libraries and sports fields
*Electrification of rail to Pukekohe
*Spending on roads, buses, ferries
Safe
*$2.86 billion City Rail Link
*Spending in central city and South Auckland

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