16 Mar 2023

Floods and cyclone add to Auckland Council's perfect storm of financial woes

9:52 am on 16 March 2023
Auckland council is facing huge financial challenges and difficult budget choices after transport project blow-outs and cyclone damage.

The government will split the City Rail Link blow-out 50:50 with Auckland Council. Photo: RNZ

A mountain to climb is how one Auckland councillor describes the tough road ahead for those in charge of the Super City.

The council needs to find about $1.5 billion to cover the cost of storm and cyclone damage, and the City Rail Link budget blow-out.

This comes on top of a forecast budget deficit of $295 million in the coming year.

Auckland's City Rail Link will be finished a year late and will cost an extra $1b, while initial storm damage estimates are up to $1.2b.

The government will split the rail link blow-out 50:50 with the council and Auckland will also benefit from wider government relief to all regions hit by the cyclone, but there is still a big bill to pay.

Waitākere Ward councillor Shane Henderson is drawing parallels with the Titanic.

"In some respects, this was expected because both the CRL and the cost of storm-related events were predicted to be coming. It was like sailing towards an iceberg that we haven't quite seen yet come into view, and now here it is."

Tunnel boring machine's breakthrough at City Rail Link’s Aotea Station in Auckland’s CBD.

Tunnel boring machine's breakthrough at City Rail Link's Aotea Station in Auckland's CBD. Photo: Supplied / City Rail Link

Aucklanders were fearing for the future size of their rates bill, and for the future of social services, Henderson said.

"Incredibly fearful at some of the potential cuts that may be in the pipeline and especially in a situation where our city is recovering economically.

"Some people are doing it incredibly tough so this doesn't change our need to protect some of the social services that may be on the table."

Manurewa-Papakura councillor Angela Dalton* said many communities were already vulnerable.

"We've got some pretty hard numbers to crunch and some big decisions to make, but we need to make sure that we aren't just nickel-and-diming our way through this and leaving our communities bereft of any services that they quite rightly want and expect from a council."

Dalton was worried Tāmaki Makarau could fragment under financial pressure.

"What helped us get through the flooding and through Covid is the community resilience and our social cohesion and those two things are about to get sliced from the proposed budget."

Keeping connected as a community was vital for a city the size of Auckland, Dalton said.

Manukau Ward Councillor, Alf Filipaina

Auckland councillor Alf Filipaina fears any budget cuts will affect the city's working-class areas hardest. Photo: Kethaki Masilamani

Manukau ward councillor Alf Filipaina had concerns for low-income whānau.

"We just want to make sure that there's not a disproportionate impact on the South and another low economic areas."

Transport Minister Michael Wood said the government would pay half the City Rail Link blow-out, but he wanted this to be last time it put its hand in its pocket for the project.

"We need to consider this carefully. It is important that in what has been presented to us we have a full and final claim. So there is the ability through the settlement of this claim to have absolute certainty about the final costs."

Dalton urged Aucklanders to have their say.

"All of us need to do the sums and decide what are we going to trade off. Are we going to pay higher rates for these services or are we going to say 'okay, we won't have those services'?

"So a big discussion for Aucklanders who all really need to be as involved in as possible in this decision making."

Henderson agreed.

"It was already a blockbuster, maybe the biggest budget that the city has ever faced, certainly in the amalgamation area.

"But this makes it even bigger.

"This means we've got an even an even bigger mountain to climb than we had in the past, and we've got to to work through together how we can solve this one."

Public consultation on the council's current annual budget that aims to close a forecast deficit of $295m is open until 28 March.

* This article has been updated to correct Manurewa-Papakura councillor Angela Dalton's title.

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