OPINION
The meeting stretched for 12 hours over two days last week and in the end, Auckland Council adopted a budget for the 2023/24 financial year, which starts on July 1, by a clear majority: 14-6, with one abstention.
In some important ways, it was a triumph for democracy. Public engagement was unprecedented and public opinion was clearly listened to. At the urging of Mayor Wayne Brown, councillors took the time to listen to each other and think hard about what they were doing.
And they achieved, if not consensus, then at least a compromise outcome that offers significant wins on all sides.
The council will sell some of its 18.1 per cent shareholding in Auckland International Airport, but keep most of it.
Proposed frontline funding cuts will be largely rolled back. As councillor Richard Hills said, 73 per cent of the public submissions were opposed to those cuts.
That’s been so strongly recognised, there is now very little support around the council table for calling community services “nice to have”. That’s also true for arts and culture funding.
Rates will rise a little above the level of inflation. The council will take on more debt than Brown expected.
None of this is what the mayor proposed in his first budget draft, which went to public consultation in March. It’s not even very close to the revised plan he took into the council meeting for a decision last week. It’s certainly not what he promised during last year’s election.
But nor does the outcome look like any of the alternative budget plans put forward during this long and taxing process. Everyone has lost as well as won.
The mood over those two final meeting days was constructive and respectful, and also charged: Many councillors spoke with powerful emotion about matters of great importance to them.
Brown chaired proceedings with an even temper and great patience, and received many plaudits for it.
But while he brought peace to the table over those two days, he waged a sniper’s war before he got there.
In the weeks and months leading up to the big showdown, Brown repeatedly attacked councillors and staff he believed were not on board with his austerity plans. Staff can’t answer back; councillors felt belittled and angry.
Whenever there were complaints, he shrugged his comments off as “jokes”.
One example is telling. When he revealed his revised budget plan on June 1, he said if he had his way, Auckland Transport staff would be housed in Nissen huts. That’s the big half-circle corrugated-iron farm sheds you see all over the country.
But AT staff are already rigorously reviewing their spending and many of them will lose their jobs because of this budget. What boss makes jokes about the staff in a situation like that?
AT’s chief executive, Dean Kimpton, met with Brown the following week. In an email to staff which the Herald has seen, he said he used the meeting “to reassure the mayor we remain committed to reducing the cost to deliver our services and to providing value for money to ratepayers”.
He told staff, “The mayor has asked me to pass on that he is sorry for his ‘off the cuff’ remarks.”
Short of the Nissen hut option, Brown wants AT to save money by moving into the council’s head office building on Albert St. Kimpton reminded his staff that AT had saved money by moving into its current Viaduct premises, has sublet one of the five floors and is about to sublet another, and that there is not enough room in Albert St for AT staff anyway.
All of which Brown must know. But as some competitive tennis players also know, it’s hard to stop playing to the gallery when that’s how you get your kicks.
So it was rather splendid that a very different Wayne Brown turned up to chair the big meeting.
His initial budget, proposed in December last year, involved selling the airport shares and using the money to reduce debt, raising rates by a moderate 4.66 per cent and massive cuts to spending. It also included $75 million in new debt.
But when this was roundly rejected, Brown produced a second version: Still with the shares sale but with most of the frontline cuts rolled back, a rates rise of 6.7 per cent and $100m in new debt.
This was the plan tabled at the council’s two-day meeting last week. By lunchtime, though, it was clear it didn’t enjoy much support either. But by then the meeting had heard from every councillor on where they stood and after lunch Brown produced a third option.
Rates would now rise by 7.7 per cent. New debt would stay at $100m. The council’s 18.1 per cent Auckland Airport shareholding would be reduced.
The climb-down on a full shares sale was massive. Nudging the rates rise ahead of inflation was also big. Brown’s new position was a country mile from his December plan. He was determined to get a budget passed and he was in full conciliatory mood to do it.
Councillor Julie Fairey waved the flag for a rates rise of 10-12 per cent, which she believed was the best way to stop the cuts and prevent a shares sale. But she said she knew too few of her colleagues agreed so she would not be putting it to a vote.
Another lobby, led by councillors Lotu Fuli and Angela Dalton, argued for more debt as a better vehicle to stop the cuts and preserve the shares.
Both put up proposals and both made a point of saying they’d been declared “balanced” by the council’s finance officials. Clearly, they’d had it with Brown’s pre-meeting accusations of “financial illiteracy”.
Fuli’s plan was to borrow a further $160m, make fewer cuts and have a 6.7 per cent rates rise. That failed, 8-13.
Dalton tried a variation: $140m extra debt and a 7.7 per cent rates rise. This also failed 8-13.
Fairey and her supporters, who include Hills and Shane Henderson, are on the left. So are Fuli, Dalton and most of their supporters. Why did they not combine? Because they had a fundamentally different view of what would happen if new debt rose as sharply as proposed.
Dalton and Fuli saw it as a stop-gap measure; a way to tide the council over until councillors can have a full strategic review of their assets, revenue and spending. That’s scheduled for the 10-year budget process starting later this year.
“You don’t sell the car to buy some petrol,” Dalton said.
But that would also mean using it for operational spending. It’ll all be gone in a year, said Hills, and then what happens? Council officials advised that Dalton’s debt proposal would probably require a rates rise of 15.7 per cent in the following year, to cover the cost of the borrowing.
“I wanted to support [Dalton’s amendment],” Fairey said, “because I don’t want to sell the airport shares. But if I can’t get support for an 11 per cent rates rise this year there is no way we’ll get it next year. And that will mean cuts and I can’t support that.”
This was the heart of it. Debt now, and fight for rates and against cuts later? Or rates now, and lock in the ongoing income to avoid savage cuts later?
In the end, both approaches failed. Councillor Chris Darby and the mayor nutted out a sixth option: The council would reduce its airport shareholding to 11.1 per cent, take on a bit more debt, and the 7.7 per cent rates rise. That’s what they voted on.
Fairey abstained, because she wasn’t prepared to support a shares sale. Fuli and friends voted against. Councillors John Watson and Wayne Walker voted in favour, but registered their opposition to the shares sale. The vote was carried 14-6.
At the end, councillor Alf Filipaina called Fairey a “copout” and verbally attacked Henderson as well. The meeting ended in bitterness.
It was a shame. Much of this process was a democratic triumph, but in the lead-up to the big meeting, behind the scenes and at the end of it, baser instincts prevailed.
Simon Wilson is a senior writer covering politics, the climate crisis, transport, housing, urban design and social issues, with a focus on Auckland. He joined the Herald in 2018.
The New Zealand Defence force has a budget shortfall of $130 million.