Rates increase held to 3.9%

Mayor Len Brown. Photo / Steven McNicholl

Auckland Mayor Len Brown has announced a better-than-expected rates increase of about 3.9 per cent in his first Super City budget.

In contrast to the Government's cost-trimming Budget on Thursday, Mr Brown yesterday announced a cost-savings budget without compromising services.

The rates increase is the first concrete sign that the Super City is delivering for Aucklanders, although Mr Brown was loath to credit the Government's reforms with the good news.

Instead he credited the "hard yacker" of the Auckland Council and the work of officers for coming up with savings to produce a base rates increase of 3.7 per cent.

Next week, councillors will consider a number of additions to the budget that are expected to increase the final figure to about 3.9 per cent.

These include a $3.9 million funding boost for a major events strategy for Auckland and $3.2 million to buy two elephants to provide company for 28-year-old Burma at Auckland Zoo.

Mr Brown said he had promised a rates increase near the rate of inflation and to continue to invest in communities. "The Auckland Council's total budget now comes to more than $3 billion, including more than $780 million in capital projects right around the region," he said.

Mr Brown inherited a tough set of accounts from the combined budgets of the former councils and a $200 million bill for setting up the Super City.

The council has had to absorb a $12 million increase in annual rail access charges from KiwiRail and the costs of the Maori Statutory Board, taking the projected rates increase of 9.2 per cent.

Chief executive Doug McKay said the council faced a number of shocks, but officers had found savings of $81 million which took the 9.2 per cent increase to 3.7 per cent.

These include $18 million from deferring some capital projects that realistically could not be completed in the coming year, $18 million in savings from council-controlled organisations, cutting spending on consultants by $15 million, insurance savings of $5 million and an ongoing programme of procurement savings of $10 million.

However, officers have made optimistic assumptions about returns on council assets, such as Auckland Airport and Ports of Auckland; taken an optimistic view about revenue from fees and charges; and indicated costs for investing in information technology could rise.

Councillor Christine Fletcher, who leads the right-leaning Citizens & Ratepayers ticket which has been pushing for a 3.9 per cent rates increase, said the projected rates increase was good news for ratepayers and evidence that amalgamation was working.

Super City savings
* Capital expenditure: $18m
* CCOs: $18m
* Insurance: $5m
* Property: $10m
* Telecomms & printing: $5m
* Consultants: $15m
* Procurement programme: $10m
* Total: $81m