5 Dec 2022

Auckland mayor Wayne Brown proposes below-inflation rates rise

12:40 pm on 5 December 2022
Auckland Mayor Wayne Brown.

Auckland mayor Wayne Brown says the average household will pay an extra $154 in mid-2023 if his suggested 4.6 percent rise is accepted. File photo Photo: Jay Farnsworth

Auckland Mayor Wayne Brown is proposing a near 5 percent rates rise to help plug a $295 million hole in the city's budget for the next financial year.

Councillors will consider the proposal this week ahead of a full council public meeting next Thursday.

The average Auckland household would pay an extra $154 in mid-2023 if a proposed 4.6 percent rise was accepted, Brown said.

"My proposal would reduce rates in real terms and assist in the national fight against inflation, supporting Auckland households through the agony of this cost-of-living crisis and helping to protect the essential services that Aucklanders value."

Brown said the proposed rise was below annual inflation and a 13 percent rise that would fill the budget deficit was not going to happen under his leadership.

The proposal relies on the sale of Auckland Council's 18 percent stake in Auckland International Airport, which could raise about $2 billion, and $130m in savings across the council and its arms-length entities.

Local boards will be asked to find 5 percent in cost savings from their annual budget.

The 4.6 percent rate rise proposal consists of a general 7 percent rise mitigated by reducing some targeted rates.

Brown said his first six weeks in the mayoral office have focused on getting the budget proposal finalised, and it had been "a battle against rate rises and service cuts".

"We want to make systemic changes to ensure there isn't a rates rise shock in 2024. If tough decisions and trade-offs are not made now, Auckland households may still face a hefty rates rise next year."

The council's forecast budget deficit grew from $270m to nearer $300m following the Reserve Bank's latest release of inflation and interest rate expectations.

The council is experiencing increased financial pressure from rises in inflation and interest rates, alongside the added cost of continuing its operations during Covid-19.

Last month, the council said it had the "financial flexibility to respond to the budget situation, but tough choices and trade-offs about the mix of budget levers would need to be made given the scale of the challenge".

It said the council needed to move towards long-term financial sustainability in addition to solving the short-term financial challenge.

The council's proposed budget will be consulted on next year.

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