19 January 2021. NZ Herald. After a year of debating to figure out how Auckland Council can financially balance its books the Mayor’s 10 year budget proposal will be that a 5 per cent rates increase is required, public assets sold, the Council debt levels increased, and savings made by cutting or reducing Council services.
The budget proposes to increase taxes, borrow more and spend more.
What has frustrated me the most as a Councillor has been many repeated attempts to have Council define what core business is in order to allow the debate to focus on trimming back on non-core Council services.
By way of example Aucklanders’ rates are being used to pay for yoga classes (classes outside of Council’s leisure centres), daycare centres, camping grounds, marinas, golf courses and a host of other services. Are these core Council business, or are these better to be run by private enterprise. I don’t believe these are core Council business.
The Mayor and some of my Councillor colleagues have disagreed with me. Their argument has been local body legislation requires Councils to promote social, economic, environmental and cultural outcomes for all Aucklanders.
However, Auckland Council cannot afford to be all things to all people right at this moment. It needs to cut its cloth to fit its revenue in what has been an unprecedented tough year. At the very least the Council needs to peel back services to prioritise the essentials that Aucklanders need and value and to make the tough calls about what services are nice-to-haves.
This action alone would negate the need for increasing debt, selling public assets or ramping up rates.
When the eight legacy Councils were amalgamated into the Super City ten years ago, with the promise of requiring fewer staff and having greater efficiencies, a crucial step was overlooked which needs to be corrected.
Each of the different Councils offered an array of different services but no filter was applied to determine if all of the services were appropriate to be provided by the newly formed Auckland Council. A cutting back to provide core services in a cost efficient-way never happened so the staff costs of providing all the services have remained entrenched.
The chickens have now well and truly come home to roost with the Auckland Council having experienced a significant downturn in revenue due to COVID-19, primarily from its reduction in pay-outs from the Auckland Airport and the Ports of Auckland. Accordingly the Council must urgently reduce its spending to balance the books. The question is, will the correct spending cuts be made?
Because the Council has failed to seize the opportunity to debate and openly re-examine its primary purpose at a time of experiencing extreme financial hardship, Auckland’s residents and ratepayers are going to be hit hard with loss of public amenities, more debt, cut services and more taxes.
It is disheartening that the numerous requests to examine what Council core business should be were repeatedly dismissed. The chance was squandered for Auckland’s elected leaders to show strong enough leadership and to truly reform Auckland Council into how it should have been operating from the day of its original amalgamation.
The debate and decision about what is and what is not core bushiness needs to be had by the Mayor and Councillors.
In order to maintain routine services the Mayor is proposing an average general rates increase of 5 percent for this year, which is up from the 3.5 percent he previously promised. Echoing his concerns two local boards, Rodney and Waitemata, have proposed even higher rate increases of between 8 per cent and 12 percent.
However, these increases seem counter-intuitive when the economy is in recovery mode and households are struggling.
What is required is for the Mayor’s current self-sponsored internal cost saving working parties to be replaced by a “razor squad” of competent external people who have no allegiance to Auckland Council. They should be given the authority to go through all of councils operations and cut 10 per cent of unnecessary spending. This rules out elected officials, staff and any current or past consultants being part of such an exercise.
Instead what is likely to happen is core services that communities truly value will be cut while the noncore services will continue unchallenged.
This will be a red rag for many ratepayers who don’t want to be continually taxed to prop up increasing Council debt and spending, when actually what they want is significant change in the way Auckland is run.
Auckland Council received $129 million from the regional fuel tax but only spent $89 million in the first year of collections on fixing traffic congestion – a core service.
Last year Auckland Council received $148m and spent even less at $79m, so what’s happened to the unspent $109 million?
Ratepayers may be shocked to learn the Council can in turn use the unspent transport money on its own daily operational expenses or for financing its ballooning debt.
I cannot emphasise enough the need for us all to keep a close eye on Council’s books.