Yesterday, the Mayor and councillors voted on and passed the Council ten-year budget (also known as the “Long-term Plan”) for 2024-34. The final version was different to what was proposed and in essence that reflected the feedback from Aucklanders as a result of the consultation, the concerns of councillors around the table and the input from local boards.
Probably the most debated topic was the Auckland Future Fund. We will be establishing a long-term intergenerational fund called the Auckland Future Fund. In simple terms what we have done here is ensure the value of our current airport shares ($1.3 billion) is locked up in a new structure which is more secure, less risky and will deliver a higher rate of return for future generations of Aucklanders. It will be in a trust structure, and we will look to pass legislation in a similar way to New Plymouth District Council.
One change we made, and which I discussed in a newsletter with you last week, was not to include the value of a Ports lease in the future fund. While this will reduce the initial value of the future fund, the deal that the mayor has struck with the Ports and their unions means we will get significantly enhanced dividends and greater value over ten years compared to the original lease proposal. This is a version of the ‘enhanced status quo’ from the original Mayoral Proposal. In consultation, clearly Aucklanders were not comfortable with aspects of the port lease proposal, and our Ports company has responded to the challenge. Though it hasn’t escaped me (and probably you) that it was only with the threat of change, that we reached a better place – that’s a $244million better place!
North Harbour stadium. This was a contentious proposal from the get-go. The decision yesterday allows the North Shore community to lead a solution for a stadium and confirm its future role. The people of the North Shore are passionate about their stadium, always have been, and when they came to me with solution, I wanted to ensure its future was both fit for purpose for generations to come and had a governance structure that made it financially viable.
Transport is obviously a massive part of any Council budget and I broadly agree with where we have landed. Our LTP sets the envelope for the Regional Land Transport Plan (RLTP), and there is an additional $600m over 10 years in the LTP which means we can continue to deliver important roading and of course public transport services.
That said, I am still concerned about two issues. First, we need to keep the pressure on to get the most out of buses with continual reviews of services that are underutilized – so called ‘ghost buses’. And secondly, for all the excellent work done by Auckland Transport and its staff, the governance relationship in law and in practice, still needs work. We saw this earlier in the week with the issues around 24/7 parking charges in the central city. I know that’s something we will need to address in the remaining time of this political term.
A big topic of conversation with local boards was the Fairer funding proposal. I have to say in the original version, I didn’t see it as fairer at all- it had unusual effects for boards like Henderson-Massey, Otara-Papatoetoe and Mangere-Otahuhu with losses of funding to them totaling some millions. It also potentially penalized boards like Ōrākei that has worked hard to optimize its assets over time. The new proposal provides a solution to this and actually increases funding to our Ōrākei Local Board.
On rates. The rates rise for year 1 is lower than originally proposed – 6.8% instead of 7.5% - and much lower than many councils in New Zealand are facing. I believe that will be welcome by many who are struggling financially. For the average Ōrākei residential ratepayer that means $43 a year less than what was proposed in December. I know any rates increase can be challenging as those in the Ōrākei Ward pay the highest average rates of any local board area in the region. However, the budget represents an ongoing package of investment both locally and regionally for our children, grandchildren and their children. We have big issues with transport, community services and open space, with the economic environment being a tough one for council just as it is for households – our costs are rising too.
That said, I am pleased to see in this LTP our rates income still stay well below 40% of our income and our budget contain savings targets for Council and its CCO’s of $142m on top of $123m existing targets (most of which we have achieved). The decisions taken yesterday on the future fund show we are a council still committed to not just taking from the pockets of our ratepayers as our first option but using our assets in intelligent productive ways.
You will recall my recent newsletter where I discussed the final governance structure for Watercare. I’m thrilled where we landed with the government on that, for a 25.8 per cent rise was simply too high and would have taken the water bill for an average household from $1340 to $1688 per year! Even if we had had the pay less get less rates option that we consulted on, that would have seen a rise for households of $547 a year. Whereas under the revised central proposal, and with the government’s solution for Watercare, the average Auckland ratepayer will be looking at $342 more a year, a saving of over $200 (more if you are very water savings conscious). More importantly though, Auckland will now see a much needed capital investment of $3.9 billion over the next 3 years and just under $14 billion over 10 years to deliver infrastructure for growth and the next generations of Aucklanders.
Finally, the local investment for the Ōrākei Ward. The restoration of the water quality targeted rate means our crucial eastern isthmus water quality improvement work is confirmed, with the most important work to coincide with Watercare’s Newmarket Gully project. There is funding for environmental projects, community facilities investment, parks and local transport projects. Lastly, I’m assured that the Remuera Library seismic strengthening project is also safe, despite a move to reduce spending on seismic strengthening. That will set our much loved community asset up for many years to come.
So finally, after 120 hours of meetings and 28,000 pieces of feedback, months of discussions, listening and compromising we have worked hard to deliver a budget that a majority of councillors and a majority of Aucklanders can get behind. I believe we have done that and give credit to the mayor in the way he has demanded a process that is more politically led.
