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Wayne Brown tables 10-year budget proposal with 7.5 per cent rates rise

Author
Bernard Orsman,
Publish Date
Wed, 6 Dec 2023, 10:26am
Auckland Council will today consider the city's 10-year budget proposal that includes a 7.5 per cent rates hikes in a single year. Photo / Dean Purcell
Auckland Council will today consider the city's 10-year budget proposal that includes a 7.5 per cent rates hikes in a single year. Photo / Dean Purcell

Wayne Brown tables 10-year budget proposal with 7.5 per cent rates rise

Author
Bernard Orsman,
Publish Date
Wed, 6 Dec 2023, 10:26am

Mayor Wayne Brown kicked off the city’s new 10-year budget process at an all-day budget committee meeting at the Auckland Town Hall. 

Brown opened today’s proceedings, saying it is meeting number 41 or 42 in the process - a reference to the dozens of closed-door workshops on the budget - and hoped it would not drag on to the point of “needing sleeping bags”. 

The mayor has already signalled a raft of cost-cutting measures and flagged a 7.5 per cent rate rise for households in year one. 

The budget committee, comprising the mayor, 20 councillors and two members of the Independent Statutory Board, will debate which items from the ‘Mayoral proposal’ will be included in the four-week public consultation on the budget beginning in February. 

Today’s meeting is the first step in the lengthy process of developing Auckland Council’s 10-year budget, otherwise known as its Long-Term Plan (LTP). 

Following modelling by officers that indicated a 14 per cent rate rise would be necessary to balance the budget next year, Brown has trimmed the figure to 7.5 per cent. 

This will be followed by a rates increase of 3.5 per cent in 2025, 8 per cent in 2026 for a one-off hit from the City Rail Link, and about 3 per cent thereafter. 

Advice from officers is that the council continues to face “significant financial challenges” externally and a legacy of short-term measures to address budget shortfalls, which need more permanent solutions. 

The business arm of the Port of Auckland could be sold by way of a long-term lease. Photo / Michael CraigThe business arm of the Port of Auckland could be sold by way of a long-term lease. Photo / Michael Craig 

A key part of Brown’s proposed budget is selling a long-term lease for Port of Auckland’s operating business while keeping the waterfront land in public ownership.   

He wants to put the proceeds into an ‘Auckland Future Fund’ starting with $3 billion to $4b that will invest in diversified assets along the lines of the NZ Super Fund. 

The fund will include the council’s remaining $1.3b share portfolio in Auckland Airport that could be sold down, and possibly the $833 million of proceeds from the partial sale of council shares in the airport this year. 

Brown said: “Any natural disaster or pandemic would impact Auckland’s airport or ports…it makes sense to spread our exposure to risk across different markets.” 

The sale of the port business is fiercely opposed by the Maritime Union and it is unclear if Brown has the numbers around the council table to offload the port business. 

The mayor also has cost-cutting plans for transport, but a few sweeteners as well, such as a $50 cap per week on all buses, trains and ferries in the inner harbour, and allowing passengers to use PayWave with an Eftpos card, rather than the Hop card. 

Pay Wave could soon be used instead of the AT HOP card on public transport.Pay Wave could soon be used instead of the AT HOP card on public transport. 

Auckland Transport’s $16b capital programme for the LTP has been reduced to $14b in the mayoral proposal, including cuts to “low-value initiatives that cost too much” like $80m on raised road tables, and reducing the cycleway budget by $141.5m to $430m. 

The budget also includes proposals to combine back-office services for all council-controlled organisations (CCOs) such as IT, property management and HR, and defunding earthquake strengthening. 

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,” he said. 

Following public consultation and comprehensive deliberations, the 10-year budget will be finalised and adopted in June 2024. 

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