Rate hikes on the way as Auckland Council approves Long-term Plan

Rates increases for Aucklanders were in the 10-year budget that council approved on Thursday.

One of the big changes in the proposed budget was a significantly downsized regional wealth fund, which Mayor Wayne Brown wants to provide a better return on Auckland Council's investments.

The Long-term Plan also set out rates increases for the average Auckland household of 6.8 percent in 2025, 5.8 in 2026, and 7.9 percent the 2027 financial year.

After that, Brown proposed an average rates increase of no more than 3.5 percent for the rest of the 10-year-budget.

The amendment was voted down 17 to six, after nearly an hour of debate.

The Budget Committee approved the final mayoral proposal 22 votes to one.

Auckland Council chief executive Phil Wilson said the plan balanced the need for investment to cope with growth and continued to protect the environment, build resilience and sustain valued services.

Wilson said it also recognised the cost-of-living concerns and put pressure on the organisation to continue pursuing cost savings and improvements.

"This Long-term Plan is about Auckland and Aucklanders, and priority areas where we can provide the greatest benefit to our communities.

"The plan also takes a fresh approach to tackle our financial challenges with more rigour and greater accountability than ever before. The organisation is behind this and ready to deliver on it for Auckland."

In a statement after the meeting, Manurewa-Papakura Ward Councillor Daniel Newman said he was uncomfortable with the 6.8 percent rates increase next year.

"A lot of councillors get paid in the region of $2500 a week so we can afford the consequences of this but for a lot of my constituents - this will hurt. But coming off the negotiation with government on Watercare's off-balance sheet borrowing facility, which is good, we're dealing with the Long-Term Plan."

The long-term plan reflected the nearly 30,000 pieces of feedback collected by council during the consultation period.

Sporting a hat with "rescue" written across it, Brown kicked off the budget committee meeting, reminding councillors of the many hours already sunk in the lead up to today.

He stressed to councillors the need to crack on with the task at hand.

"I wanted to focus on fixing Auckland and not just kick the can down the road.

"Believe it or not, we had over 65 workshops and 120 hours of meetings, plus the drop-ins and other briefings.

"Let's land on a plan so we can get on with delivering it, I want to keep this focus today on the LTP [Long Term Plan] and not stray into new things that we did not consider or did not come up in 120-plus hours of discussions that we've had."

The mayor came out with a final, revised proposal for the budget earlier in the week, with changes including a million-dollar cash injection for Auckland Transport.

Divided opinions on Future Fund

The Auckland Future Fund was originally set to be a $3 billion to $4 billion wealth fund for the city, made up of an initial investment of Auckland Airport shares and the proceeds of any lease on the Port of Auckland.

Earlier this month, a deal was struck to keep the port under council control, after it projected significantly improved returns of $1.1b across the timeline of the plan. This exceeded the the projected net returns from investing the proceeds of a port lease by $172 million.

With the lease taken off the table, the fund would now be initially capitalised only with shares from Auckland International Airport Limited.

The shares would be set up as a trust, with the council seeking additional protection in the form of legislation against any raids on the fund.

Brown's new proposal included a 'Fix and Finish' reserve fund of $20m, achieved by setting up the Auckland Future Fund earlier in the 2025 financial year and taking advantage of the expected returns.

Councillor Christine Fletcher voiced her concerns over the changes to the fund.

"The focus today is not as large as what [the mayor] originally proposed," she said.

"And I suppose I have some disappointment that the size of the fund has diminished, and that you have not chosen to include port dividends under the enhanced status quo."

She asked council chief executive Phil Wilson for confidence the fund would not get in the way of council's savings.

"I want your assurance, today as CEO, that this will not in any way negate the work that is underway to find further savings within this council."

Questions were raised around the establishment of the fund, which would cost half a million dollars to set up.

Councillor Alf Filipaina asked whether more work should be done before launching into the fund.

"For this Auckland Future Fund to be successful, wouldn't it be better if we did the work around what could be put in to the fund before it gets established?" he said.

Filipaina proposed an 11th hour amendment to hold off establishing the Future Fund, wanting to take a closer look at the fund over 12 months.

"I'm supportive of the Future Fund," he said.

"And this is only to say 'let's do the work, let's do the work around what we can put into the Future Fund', this is what it's all about."

Councillor Newman said he supported the Future Fund and that share dividends being used to hold down rate increases was "an unhelpful legacy behaviour".

He believed his ward would be one of the biggest winners of the "fairer funding", although he had not seen consensus on a funding model.

"My hope is that our boards can move quickly to recast their respective work programmes to help accelerate the maintenance and renewal of assets and facilities, and that projects such as the future redevelopment of War Memorial Park in Manurewa can be enabled for 'fix and finish' community projects in legacy Manukau City and Auckland City."

The Long-term Plan, including the approved budget, will be formally adopted by the council's Governing Body on 27 June.