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The average Auckland household would pay an extra $613 in rates and water bills this year during the cost of living crisis under Mayor Wayne Brown’s proposed long-term plan.
The long-term plan, also known as the 10-year budget, was approved by a majority of councillors today for public consultation.
Aucklanders will now have four weeks to provide feedback on its contents.
Three options for rate rises have been proposed, with most of the council, including Brown, supporting a “medium” increase of 7.5 per cent this year, 3.5 per cent next year, 8 per cent in year three, and about 3.6 per cent thereafter.
The 8 per cent rise is largely due to a one-off hit to pay for the annual $200 million running costs when the City Rail Link opens in 2026.
In Brown’s first budget last year, household rates rose by 7.7 per cent and water bills by 9.5 per cent.
The long-term plan contains options to ‘pay more, get more’ and ‘pay less, get less’.
With Watercare restricted in how much it can borrow for a $13.9 billion capital programme over the next decade as a result of the Government abolishing the Three Wates reforms, water bills are proposed to rise by 25.8 per cent this year.
The impact of the ‘middle’ proposal would see the average household rates bill rise from $3560 to $3827, and water bills from $1340 to $1686 - a combined total of $613.
Speaking to Newstalk ZB host Mike Hosking this morning, Brown said his preferred version was “bang in the middle, it’s justifiable, there are no major cuts, there’s a lot of restraint”.
The council had “borrowed like hell” and had a lot of debt servicing costs but he would not be increasing debt, he said.
At today’s budget committee meeting, Brown pointed out that other councils in New Zealand are facing rates rises of between 15 and 25 per cent this year while the country was still in a cost of living crisis and big companies are reporting disappointing results.
Said councillor Shane Henderson: “It’s fair to say local government has a funding crisis.”
Auckland councillor Shane Henderson says local government has a funding crisis. Photo / Sylive Whinray
Luckily for Auckland, Brown said, the long-term plan has a central proposal with options without which “we would reach further into ratepayer pockets to pay for things and the infrastructure to make our city more resilient”.
The mayor said that after 40 meetings, and councillors “not agreeing on everything”, the budget proposal was not perfect, but the time has come for people to have a say.
Councillor Daniel Newman said he got the proposed budget - “CRL funding, Gabrielle, the floods, Three Waters reforms, Regional Fuel Tax, it feels like the only thing missing is a plague of locusts”.
Asked about the proposed big hike in water bills and rates at Parliament today, Minister of Auckland and Minister of Local Government Simeon Brown said the Government was working with Wayne Brown to find a solution for financial stability around water bills.
On rates, he said that was a matter for councils to make, but his message to councils is to focus on the must-haves, not the nice-to-haves.
A proposal is on the table to sell a long-term lease for Port of Auckland's operations. Photo / Michael Craig's
Another key - and controversial - part of the long-term plan is a pitch by Brown to sell a long-term lease for Port of Auckland’s operations while keeping the waterfront land in public ownership.
He wants to invest the proceeds into an ‘Auckland Future Fund’, estimated between $2 billion and $3b, to invest in diversified assets along the lines of the NZ Super Fund.
The council’s remaining $1.3b share portfolio in Auckland Airport would also go into the fund.
Councillor Mike Lee said: “This is essentially about a massive sale of public assets...it is not about fixing Auckland. It is about asset stripping Auckland.”
Public consultation on the long-term plan opens on February 28 and feedback must be received by March 28.
Bernard Orsman is an Auckland-based reporter who has been covering local government and transport since 1998. He joined the Herald in 1990 and worked in the parliamentary press gallery for six years.
