PM Chris Hipkins, Christopher Luxon and Grant Robertson react to a potential new 'flood tax' that could be used to pay for the Cyclone Gabrielle recovery. Video / NZ Herald
Auckland Council and the Government are both calling for more savings to help pay for the storm damage.
On TVNZ’s Q + A programme yesterday, Prime Minister Chris Hipkins said about $1 billion of savings had been identified to get fed back into the Budget for the recovery effort and cost of living-related issues.
The Government would be responsible for “somewhere between $4-8b” of infrastructure damage with housing and business costs on top of that, he said.
Prime Minister Chris Hipkins says the infrastructure costs of the weather events will be $4-8 billion alone. Photo / Mark Mitchell
A similar approach is being taken by Auckland Council while officers work out the flood and cyclone impacts and estimate the costs.
The plan is to reduce spending over and above $295 million of proposed spending cuts in this year’s budget to provide a financial buffer to cover some of the storm costs.
Last week, council group chief finance officer Peter Gudsell instructed senior leaders at the council and council-controlled organisations (CCOs) to find savings “with immediate effect”.
They were told not to proceed with new operational or capital projects where there are no contractual commitments.
Other belt-tightening included no new spending on professional services, travel, catering, and entertainment, limiting the use of council credit cards and for staff training to only meet minimum requirements.
Gudsell also reminded Local Boards and CCOs of a resolution by the governing body three weeks ago to closely scrutinise and manage their discretionary spending.
There are exceptions to the new cost-cutting directives, including upholding existing contractural commitments, health and safety matters, sticking to legislative requirements, and continuing the savings programme in this year’s budget.
The finance boss also said some new projects could proceed if delaying the spending could lead to higher costs, loss of external funding or having an adverse effect on a key strategic priority.
Artist's impression of the planned cycleway and roading improvement project on Meola Rd between Westmere and Pt Chevalier. Photo / Auckland Transport
The council’s stormwater arm Healthy Water has hinted at pausing stormwater work that was fast-tracked to align with a $46 million cycleway, public transport, and roading improvement project between Westmere and Pt Chevalier.
The project, along with a similar project on Great North Rd costing $31m, was only approved by the Auckland Transport board on February 28.
Healthy Waters general manager Craig McIlroy said he will take direction from AT.
“If they proceed we will also proceed to avoid rework and higher costs. If they pause we will also pause,” he said.
AT has not responded to questions about the future of the two projects.
