1 Jun 2023

Auckland Mayor Wayne Brown unveils his plans to address budget hole

1:29 pm on 1 June 2023
Auckland mayor Wayne Brown speaks about his proposals for the city's budget.

Auckland mayor Wayne Brown speaks about his proposals for the city's budget. Photo: RNZ / Marika Khabazi

Auckland Mayor Wayne Brown has reiterated his intention to sell all of the council's shares in Auckland Airport.

The super city faces a $375 million deficit - which includes $50 million needed for storm recovery.

Brown told some media this morning an additional debt of up to $100 million may be necessary.

"The long-term plan will be a shock to the way council do things, from management right through... We will set out as if we were running a company, not just historical building upon those who have had the ability to scream the loudest in the past. Nor will we be flogging the family silver."

Brown had earlier briefed councillors in a behind-closed-door meeting on his budget cutting plans.

Speaking to some media this morning, Brown said he was going ahead with his mayoral budget.

Brown said only media that were "sensible" were invited to hear his plan. He called some media "nasty".

He took a shot at current and former Auckland Councillors who he said continued to spend even as Covid-19 and inflation made it hard for ratepayers.

"Covid didn't create the mess we are in. And nor did I. It was irresponsible living beyond our means. And unfortunately, it has caught up with us.

"I also inherited a return cast of councillors, quite a lot of them not financially literate and with a severe aversion to making difficult and unpopular choices."

The mayor said that unlike Minister of Finance Grant Robertson he could not print more money so he wanted to propose a "tough budget".

His budget proposal was more or less the same, with a few changes after listening to submissions, he said.

Reiterating his intention to sell all of the council's shares in Auckland Airport, he says rates increase will go no higher than 6.7 percent.

"To send out $100 million in interest in the hope of getting $30 million back is a waste of money. And so I propose in my budget the full sale of the 18 percent shareholding in Auckland International Airport, currently valued at $2.3 billion.

"I'm also proposing that the rates will be still low at 6.7 percent. Anything higher than inflation would place an undue burden on households."

Brown said arts and culture leaders spoke well, but need to exercise some restraint.

He said he tried to convince Auckland Museum to charge adults, but they said no - Brown said there would be some changes.

Brown pledged to move Auckland Transport out of its viaduct office saying the office was a waste of money and that AT staff would eventually be moved into council buildings.

Brown said the office cost $6 million a year to lease, but that would change before his time in office ended.

He also pledged to charge residents for entry into the Auckland Museum, which was previously free.

He thanked local boards that tried to make savings.

"The Citizens Advice Bureau funding will be restored, but under instructions that they've got to start shifting their funding to other sources.

"Other councils only provide some funding for [CAB]. If you give away free money, it has endless demand. Most of what the Citizens Advice Bureau people do... is actually solving problems for the government. The government has moved its provision of services to digital delivery - which is sensible. But it means there's no shopfront for their problems in Auckland."

On the potential additional $100 million borrowing that may be needed, Brown said "It's not scaremongering".

"It's just the best solution that we have. It's the only way to prevent steep rate rises, claw back community funding cuts and pay off our most expensive debt. Our capacity to borrow isn't the issue - it's our capacity to pay it back."

Brown said he wanted to use savings to fix some things.

"I was elected by 180,000 people to fix Auckland. I didn't realise I'd spend the first six months just doing a budget."

Brown did not allow questions from the media at the end of his speech.

'Hoping that Wayne Brown will be willing to listen'

Christine Fletcher.

Christine Fletcher. Photo: SUPPLIED

Auckland councillor Christine Fletcher expected the mayor to have a tough time convincing his colleagues to support his budget proposal.

Fletcher told Morning Report she did not support his plan to sell all of the council's Auckland Airport shares. She would only support selling a very small portion of the shares - not all of them.

"The reality is those shares were given to Auckland - you know, they have been the opportunity for us, in bad times, to know that we can fall back on. And whether it's those shares, or whether they are realised to create another rainy day fund, Auckland needs that sort of safeguard for the future," the former mayor of the now-defunct Auckland City told Morning Report.

"I've got advice that we could use some of those shares to get us through this particular crisis that we've got at the moment, but I only want us to sell a very small portion of those shares."

She would have been happy with a higher rate rise - suggesting 6.9 percent, not much higher than Brown's proposed 6.7 percent - and perhaps a targeted rate on the airport precinct.

"What I'm hoping is a majority of councillors can come together and actually find a point, before next Thursday, that we can agree on," said Fletcher.

"So whether it's the level of debt, whether it's the level of the rate increase… but these are things we need to sit down calmly, and quietly, and I'm hoping that Wayne Brown will be willing to listen to advice."

'Not financially literate'

Brown called out Fletcher as one of a few councillors that signed a pledge not to increase rates by more than inflation. He said "quite a lot" of councillors he "inherited" from previous administrations were "not financially literate" and had "a severe aversion to making difficult and unpopular choices".

Auckland mayor Wayne Brown speaks about his proposals for the city's budget.

Wayne Brown. Photo: RNZ / Marika Khabazi

In May he said without selling the shares, rates would have to go up 22.5 percent - which one councillor dismissed as "scaremongering".

"It's not scaremongering," Brown said on Thursday, saying the airport share sale was "just the best solution that we have. It's the only way to prevent steep rate rises, claw back community funding cuts and pay off our most expensive debt."

Councillor Maurice Williamson told RNZ on Wednesday selling the airport shares would mean a rates rise kept at around just 4.5 percent.

Councillors will meet next week to decide on the final mix of cuts, debt and rates rises that will form the annual budget. Fletcher said if it was voted down, that would be "huge".

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