Funding for regional parks, like Tawharanui (pictured), could be cut if the council's finances deteriorate further. Photo / Alex Robertson
Funding for regional parks, like Tawharanui (pictured), could be cut if the council's finances deteriorate further. Photo / Alex Robertson
Auckland Mayor Phil Goff is planning to use money from the Three Waters reforms to postpone nasty surprises in his last budget before quitting politics.
The council is due to get $127 million from the Government in July as part of a $500m "better-off" payment for handing over $11 billionof council water assets under the reforms.
The money will help Goff plug a $175m budget deficit in this year's budget and push out unpopular spending and service cuts arising from Covid-19, inflation and other financial problems to the new mayor and council.
Auckland Mayor Phil Goff has one last budget before stepping down at October's local body elections. Photo / Dean Purcell
The Final Mayoral Proposal for this year's budget forecasts an ongoing budget deficit of $90m to $150m from next year, depending on how the economic situation unfolds.
By then, Goff is expected to be confirmed as New Zealand's next High Commissioner to the UK.
Work does start this year on deferring $230m of projects, but the impact of the changes and service cuts do not start to bite until next year.
An upgrade of Lincoln Rd could be deferred. Photo / Sylvie Whinray
Some of the early projects that could be deferred include the Orewa seawall, the new Ponsonby Park, a multi-use centre for Flatbush, park-and-ride stations at Matiatia and Papakura, the Lake Rd, Lincoln Rd and Glenvar Rd upgrades and cycling projects.
Deeper cuts next year could include reducing maintenance at parks, sports fields and council facilities, cutting back road maintenance and slowing down or axing urban regeneration projects in Takapuna, Northcote, Henderson and Manukau.
If the council's finances deteriorate to the point where $500m or $750m of projects need to be deferred, there will be implications for regional parks and cemetery renewals, Wynyard Quarter developments and high priority climate action projects, such as slip remediation and carbon emission reduction programmes.
Cycling project could be deferred. Photo / Alex Burton
This year's budget also contains the warning of budget blowouts to the $4.4b City Rail Link and $1.4b Eastern Highway.
In his final budget proposal, Goff said he does not pretend to tell the new mayor and council what they should do.
"It is, however, appropriate to outline the menu of options that a new council will need to choose from, should costs exceed revenue … it is for the incoming council to determine the shape of budgets from 2023/204 to ensure prudent and sustainable financial management," he said.
The budget proposal does make suggestions for the new council, such as increasing rates above 3.5 per cent in the 10-year budget and selling shares in Auckland Airport and Ports of Auckland.
Auckland councillor John Watson. Photo / Nick Reed
The worsening state of the council's books has been apparent since the last financial update in December last year. Auckland Transport has publicly said it is running out of money to run public transport services at current levels, and Goff and finance committee chair Desley Simpson predicted hard times from falling revenue.
A report to the audit and risk committee two weeks ago said inflation, along with rising interest rates, labour market and supply chain constraints, "are presenting a significant risk to the financial position of the Auckland Council group".
Councillor John Watson said Goff's final budget is a smokescreen for what is coming up soon.
He said it is pretty clear there will be a renewed push to sell strategic assets like the ports and airport shares, year-on-year rates increases of more than 5 per cent, service cuts and the "big dark cloud" of the City Rail Link blowout.
Goff defended using money from the Three Waters reforms, saying it is there from Government and it is better to use it to offset some of the costs in the budget than simply loading that burden on ratepayers who are already meetings costs of inflation and higher interest rates.
Phil Goff's climate tax will go towards new electric ferries, like this artist's impression of a 300-person plug-in hybrid-electric ferry proposed by Fullers 360. Photo / File
Goff's last budget contains a rate rise of 5.6 per cent for households, taking the average rates bill to $3280. The increase includes a general rate rise of 3.5 per cent, a climate action targeted rate and other minor changes.
Goff said the climate tax will enable $600m of investment in new bus services, including 10 new frequent bus routes in the south, west and east of the city, new electric and low-emission ferries and planting thousands of native trees in predominantly low-income areas with little greenery.
No subsidies for the transport components of the climate tax will be available until 2024 and AT has said "this initiative will need to be reduced" if funding does not come through in the next Regional Land Transport Plan.
The new budget is expected to be passed this month and come into effect on July 1.
