Council’s Emergency Budget 2020/2021 responds to a $750 million fiscal hole caused by the Covid-19 crisis and the urgent need for more water infrastructure to avoid increased water restrictions.
The budget also includes big reductions in spending and cost cutting. Over 600 temporary and contract workers have already been reviewed and there will be a further cut of around 500 permanent jobs. Staff and elected members have taken salary cuts and budgets for non-essential spending have been slashed. Cuts have been made in services, and investment in some infrastructure projects has been deferred, reducing spending by hundreds of millions of dollars.
Despite these reductions, the Emergency Budget maintains as far as possible the critical services Aucklanders rely on and the investment the city needs, including drought related works.
Over 34,000 submissions were received by council through the consultation process on the budget. I appreciated reading the feedback from constituents, mana whenua and regional organisations. The valued role of council in providing support through the emergency response and in delivering community well-being was recognised in the feedback but concern was raised about the impact of cuts on Auckland’s ability to recover at a time when we need investment in jobs and to build community resilience.
I can also appreciate why there was feedback pushing for a rates freeze or cut. This is a difficult time with many households and businesses experiencing reduced income. There is a lot of understandable anxiety about job losses. It is a valid question to ask why, at a time of economic uncertainty and potentially a serious recession looming, council needs to put up rates when everyone else is belt tightening.
However, the part of the story that doesn’t often hit the headlines is that due to historically low rates we are playing catch up on critical infrastructure investment that should have happened to match Auckland’s growth. Between 2010 and 2020, Auckland has grown by well over 200,000 people, more than the population of Hamilton. Even at 3.5%, Auckland’s rates increase is modest when compared to other cities.
Overview: I believe I was given a strong mandate to support the 3.5% rates increase budget package taking into account the feedback, the views of local boards, the financial advice regarding what is a prudent level of debt, and the updated information we received on the expenditure required to respond to the drought. A majority of submitters from the Waitemata & Gulf Ward supported the Mayor’s proposal as well as all of Auckland’s 21 local boards.
I think council has taken the right approach targeting support for rate payers facing financial hardship (through the rates postponement option) rather than an across the board rates cut that would have led to an austerity budget with dire consequences. We landed on
a final budget focused on Auckland’s recovery and rebuild as planning already gets underway on council’s next 10 year budget. (PIPPA COOM)
Contact Pippa Coom via pippa.coom@aucklandcouncil.govt.nz