Auckland mayoralty: Smart vs stupid in the candidates' rates debate - Simon Wilson

One mayoral candidate has described Ronnie van Hout's giant Boy sculpture in Balmoral as a "massive" waste of money. Photo / Michael Craig

OPINION

When mayoral candidates promise zero or very low rates rises, what do they really mean?

Almost always, it comes down to cutting services. Candidates deny this. They say they'll keep public transport and rubbish collection, potholes will still be filled, libraries will remain open and playing fields will be maintained. The cultural sector won't lose its funding and nor will Stardome or the Auckland Rescue Helicopter Trust.

Instead, they say, they'll cut "waste" and "non-essentials". They'll make the council more efficient. That's a good, important thing to do. But do our mayoral candidates know how to do it?

This election, Viv Beck and Craig Lord offer the standard line. She says rates rises should be "fairer" and "kept under better control", with a clearer focus on "cost-effective core services". Who could disagree?

But when the council haplessly tried low-cost options for improving Queen St, she was outraged. She hasn't said which "non-core services" she thinks are expendable.

Craig Lord also recognises that "rates will always go up", while talking about "core services" without saying much about what they are.

But he did tell me Ronnie van Hout's giant "Boy" sculpture in Balmoral was a "massive" waste of money. Public art, or as Lord prefers to say, "dumb vanity projects".

Mayoral candidate Wayne Brown with Viv Beck and Craig Lord behind him. Photo / Greg Bowker

In fact, public art has already taken a hit in the council's new 10-year "recovery budget".

Here's what very low rates rises and "core services" usually means in practice: the services will stay, but there'll be less of them.

Libraries will have shorter opening hours and reduced funding for acquisitions. Fewer potholes will be filled and rubbish will be collected less often. Sports clubs will have to pay more to use playing fields and as the city grows the number of new playing fields won't keep up. The APO, kapa haka groups, theatres and other cultural groups may still get grants, they just won't be as large. Community groups will receive less.

But this is not just belt-tightening for everyone in tough times: the burden will fall most heavily on those who need council support the most. College Rifles, the Remuera multi-sport club, has enormous potential for fundraising, so to a degree it's insulated against funding cuts. Ōtara Scorpions Rugby League, not so much.

On top of that, poorer suburbs have less to start with. So if the easiest way to make cuts is simply not to do anything new, that undermines attempts to improve equity.

Besides, it's easy to cut services in poor parts of town when people don't complain, or if they do, no one hears them. Cut something in Devonport or St Heliers and there's all hell to pay. It's the low-hanging fruit that falls first.

This is most obvious with public transport. Having fewer buses will hardly affect the wealthier suburbs on the city fringe. Epsom, Mt Eden and Remuera have so many buses streaming through them from further out, if they lose some they might not even notice.

But that's not true in Manurewa, Pt England or Massey, where there are not so many buses to start with. Cut some of them and the whole service becomes unreliable, forcing people to drive instead.

This is more likely to happen to poor people, and it will cost them a higher proportion of their income when it does happen.

And that also costs everyone else, because it makes congestion on the roads worse. Which leads to demand for more big infrastructure spending. Spending cuts now invariably boomerang back later.

Again, none of this means the council should be inefficient. But unless efficiencies are sought with insight and purpose, they will entrench privilege at the expense of equity and cost money in the long run. After decades of underspending on infrastructure, the city and the entire country is suffering from that now.

There's only one mayoral candidate who talks openly about these things: Efeso Collins.

Auckland mayoral candidate Efeso Collins speaking at a Penrose meeting with Wayne Brown behind him. Photo / Greg Bowker

He calls his approach to rates "prudent". He says rates should be "set at an affordable level", which, as defined by the 2007 Local Government Rates Enquiry, is "on average less than 5 per cent of household income". That puts him in line with Auckland's existing rates, which this year rose an average 5.6 per cent.

Collins bills himself as the equity candidate. He stresses that 5 per cent is a ceiling, not a target, and is not happy that steeper rises have occurred in many poorer parts of town. "I will ensure council's current review of services ensures the impact on lower-income and vulnerable communities is carefully analysed," he says, "so people who need these services aren't the most disadvantaged through their reduction or loss."

He wants the council to do more to promote government programmes such as the Rates Rebate Scheme and Accommodation Supplement, both of which offer help to many "low-income and fixed-income households".

Wayne Brown has a vigorous take on all this. He wants the port, owned by the council, to become a major revenue stream returning $400 million a year.

That amount roughly equates to a five per cent rise in rates, which many commentators think is the likely rate of inflation next year. Brown calls that $400m "economic headroom for ratepayers".

It's difficult to see how he could squeeze it out of Ports of Auckland straight away, but the strategic goal is smart, for the revenue stream and because it will help the city create better assets on that valuable land.

Like all candidates, Brown says he wants "to do more with less". His target: "the obviously top-heavy management, which will be cut severely".

He told a meeting in Māngere Bridge last month how he'll do it. The CEO will be instructed to make a 30 per cent cut in the salary bill for those earning over $300,000, a 20 per cent cut in the salary bill for those earning over $200,000 and a 10 per cent cut in the salary bill for those earning over $100,000.

"Cutting management salaries at the top of the pay scale has never, anywhere, meant a cut in services," he says. "It's the opposite. We can make these savings without going near any bin men or street cleaners or bus drivers or librarians."

He contrasts this with the usual approach. "If you ask the CEO to reduce staff they always cut services and the guys at the bottom. This is what happened at council during Covid." He's largely right about that.

Auckland mayoral candidates Wayne Brown (left), Viv Beck, Leo Molloy and Efeso Collins. Photo / Greg Bowker

Brown also says that, having instructed the CEO, he would then "walk away" because "it's his problem".

He's wrong about that: politicians can't walk away from responsibility for spending. What if the CEO at Auckland Transport decided to cut all the senior managers of, say, road safety? The programmes would collapse and the delivery staff would lose their jobs too.

Brown reckons he knows how officialdom works. He tells a story from 2001, when the Labour-led Government appointed him chair of the Auckland District Health Board.

"They asked for a quick $20 million saving. So I said to the minister, 'Easy, we'll just stop sending all those reports that we don't need to run the business, that your ministry staff do nothing with, and you can make a similar saving by getting rid of the staff who read them and do nothing.'"

And, he adds, "It happened."

Brown says it would be "fraught with risk" to promise no rates rises. "But I can promise to take a very hard line on council costs."

The council itself has not been blind to the need for greater efficiency: it has an ongoing value-for-money programme, led by centre-right councillor Desley Simpson, which has saved $2.4 billion since 2010. But the mayoral hopefuls all say it's not enough.

As for Leo Molloy, he says: "I can guarantee you there will be no increase in rates."

In my view, that's just stupid.