Our new coalition Government kicks into gear, rates rises and axed cycle lanes in Auckland’s proposed budget and why medical students here can’t afford to finish thier degrees in the latest NZ Herald headlines. Video / NZ Herald / AP Video / Getty
Auckland Mayor Wayne Brown has signalled more rates rises in the coming years, along with a raft of cost-cutting measures including likely council job losses, scrapped cycle lanes and defunding earthquake strengthening as part of his proposed 10-year budget.
The Herald has been given insight into what is expected in the Mayoral proposal for Auckland’s 10-year budget - which will go to an Auckland Council budget workshop this week. It endeavors to implement “significant financial restraint” on the city.
Most alarming to Aucklanders will be the mayor’s assurance that rates will have to increase in the short term.
“Despite a reduction in operating costs, rates will need to increase as Auckland Council plays ‘catch-up’ on previous decisions to plug operating gaps using short-term measures,” a statement from the mayor’s office said.
In September, the Herald reported that heading into a new 10-year budget next year, the starting point for rates increases is 13 per cent, and a senior council source said water bills could rise by more than 20 per cent.
The gloomy outlook came hard on the heels of a 7.7 per cent rate rise and a 9.5 per cent hike in water bills for residents this year, which took the combined cost for the average household to $4900 during a cost of living crisis.
But the mayor’s office today attempted to reassure that “over the long term, with continued restraint, rates increases are planned to reduce to inflation or near inflation”.
Auckland mayor Wayne Brown. Photo / Michael Craig
The mayoral proposal is the first formal step in the lengthy process of developing Auckland Council’s 10-year budget, otherwise known as its Long Term Plan (LTP).
“The decisions of the past have determined our current budgetary woes. And the decisions that we make now, in the process of developing Auckland Council’s Long Term Plan, will shape the decades ahead,” Brown said.
“The chickens are coming home to roost. The running costs of the City Rail Link alone are expected to account for about 10 per cent of rates paid by Aucklanders in the third year of the Long Term Plan.”
Job losses within Auckland Council also appear likely, as Brown says he intends to enact “sensible initiatives” to combine back-office services for all council-controlled organisations (CCOs) such as IT, property management and HR.
Defunding “low-value works” in the council’s capital programme such as earthquake strengthening are also part of the budget proposal.
Brown said he was adamant these capital works cuts were “not solely a cost-cutting measure”.
“The mayoral proposal seeks to improve Auckland Council’s core services by prioritising issues that really matter to Aucklanders and pausing those that don’t make a real difference or should be funded externally,” Brown said.
Transport was also in the mayor’s firing line. He has maintained his commitment to “time-of-use charging” in order to cut congestion and dynamic lanes for buses in the city centre.
Brown also proposed funding cuts to “some low-priority initiatives” such as new raised speed tables and some cycleways “until Auckland Transport can do these things cheaper and better”.
The mayor also indicated council’s governing body was discussing the implications of the National Party’s election and its commitment to repeal and replace the Three Waters legislation and remove the Auckland Regional Fuel Tax.
Heavy traffic heading south on Auckland's Southern Motorway at Drury. Photo / Brett Phibbs
“We need to work through the implications for those policies with the new Government, because they could have a significant impact for our region,” Brown said.
National’s transport spokesman Simeon Brown said during the election campaign the party would move rapidly to abolish the 11.5-cents-per-litre Regional Fuel Tax in its first term, and it would probably occur before there is legislation for congestion charging to be implemented.
Removing the tax without replacing the revenue will leave a $2 billion shortfall in the transport budget because the money raised attracts an equal amount of central government subsidies, Brown said in September.
Brown also said the cost of insurance for the council’s assets increased 40 per cent this year following Cyclone Gabrielle.
Wayne Brown said the cost of insurance for the council’s assets increased 40 per cent this year following Cyclone Gabrielle. Photo / Ted Scott
The mayor also wants a “fundamentally different relationship between Auckland Council and the new Government”, and said after the 2023 general election that he was in talks with political parties about implementing his manifesto for Auckland - “The Auckland Deal”.
“The new Government should also consider greater devolution to Auckland Council. This isn’t about going to central government for handouts. What we’re asking for is a fair share of what Auckland generates, including tax revenue equivalent to the GST charged on Auckland rates,” Brown said.
In December, the budget committee will determine what items from the mayoral proposal will be included in the four-week public consultation on Auckland Council’s 10-year budget beginning in February.
Brown said at his own direction, the process for developing this proposal has been “more politically led than in the past”.
The mayor’s office said 34 budget workshops have been held over the last 11 weeks.
Following public consultation and comprehensive deliberations, the 10-year budget will be finalised and adopted in June 2024.
Tom Dillane is an Auckland-based journalist covering local government and crime as well as sports investigations. He joined the Herald in 2018 and is deputy head of news.
