8 Jun 2023

Auckland Airport shares: D-Day for Mayor Wayne Brown's budget hopes

10:51 am on 8 June 2023
Auckland Mayor Wayne Brown

Wayne Brown appeared relaxed before the meeting got underway at 10am. Photo: RNZ / Finn Blackwell

Aucklanders find out today if the mayor has enough votes to sell the council's $2 billion worth of airport shares as part of the plan he says will help fix the city. The meeting starts at 10am.

Councillors will vote on the annual budget and have to plug a $325 million deficit.

Three Auckland councillors who declared a stake in Auckland Airport will still be able to vote in today's budget meeting.

Councillors are settling in for a long session that began at 10am as they debate the mayor's budget proposal.

Watch Auckland Council's streaming of the budget meeting.

Albany Ward councillor Wayne Walker declared a $3 million shareholding through a trust.

Chris Darby and Julie Fairey also declared shares before the meeting.

All three said the council's legal team concluded their shares did not cause a conflict of interest for their vote.

Auckland Mayor Wayne Brown has proposed to fund local boards with $16m of savings, but it is not clear if he has the numbers from Auckland Council.

The super city is looking down the barrel of a total $375m deficit, including $50m needed for storm recovery.

The funding of local boards would be contingent on the council selling its 18 percent share in Auckland Airport.

The budget negotiations have been marked by protests from the public and strife and insults between Brown and several councillors who oppose selling the airport shares.

Chris Carter

Chris Carter Photo: RNZ

Henderson-Massey Local Board chair Chris Carter said it would be a huge day for the mayor's agenda.

"It's extraordinarily significant for the mayor's political future because he's rested everything on today's vote and he seems to be obsessed with selling the airport shares.

"If he's not successful in getting the support of 10 councillors today to do that then he's suffered a huge political blow.

"So it's important for Auckland where our city's going, it's also important for the politics of our city."

Carter said he does not support selling the airport shares.

"The mayor also has to get support from his councillors for these slash and burn cuts that he's proposed.

"Now the interesting question politically will be, what happens if he can't sell the airport shares and he can't get any support for the slash and burn?"

Carter said compromise was important, and that the group A Better Budget For Auckland has put out two proposed budgets that involve a bit more borrowing and a small rates rise.

"The mayor has an off-ramp, let's see whether he's got the political nous to take it."

Waitākere Ranges Local Board chair Greg Presland told Morning Report that the airport shares have worked well for the city.

"Over a long period of time they've been very well performing and it's only been the Covid lockdown which saw the income from dividends cut.

"They're predicted to earn another $42 million this year in dividends and it's going to ramp up over the next few years.

"Eventually the savings that the man is talking about are going to be much smaller than the dividend income."

Brown has talked about the council's inability to pay the interest rates on its $11.7 billion in debt.

Presland said that predictions are that interest rates will drop in coming years.

"We can keep the shares, we need to just look at the other measures."

The mayor has proposed an approximate 4.6 percent rates increase, well below the rate of inflation and has said that without cuts or asset sales residents would face a 22.5 percent rise.

"The mayor terrorises people about borrowing but our balance sheet's relatively healthy," Presland said.

"We have $70 billion worth of assets and the figures last year were $11.4 billion worth of debt so we're very comfortably leveraged in that term.

"We just need to get through this year and we can do that by using the proper levers and keep the shares, and long term that would be better for the city."

Carter said he opposed even a partial sale of shares.

"It's complete madness to sell these shares. They'll make $42 million this year and in eight years' time they're predicted to make $79 million a year.

"The council debt is not out of control. It's actually lower now than it was just before Covid struck. The council has top ratings from international credit agencies.

"If they bumped up the rates to 9.9 percent it would mean a dollar more a week for the average house of $1.4 million. That's not even the cost of a cup of coffee a week.

"It's all this alarmist talk, the mayor seems to be obsessed with selling the airport shares, the most profitable asset that the city has."

'Common ground should be found'

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Heart of the City's Viv Beck. Photo: Supplied / HOTC

Heart of the City's chief executive Viv Beck said she hopes for a positive outcome.

"I'm hoping for decisions made in the best interests of the city.

"What we're looking for is we support the move to ensure a cost-efficient, effective council.

"We're pleased that there's been movement around core services, community services, some of the arts and cultural things, that there's been some positive movements there, although that's going to be dependent as we understand it on the sale of the airport shares which is pretty contentious.

"That's the big issue is whether a common ground should be found today."

Beck said Heart of the City members have a wide variety of views on the possible airport share sales.

"I think it comes down to how that issue is worked through respecting different views and coming to an outcome that a majority of councillors can accept, and whether that can be achieved today is unknown."

The Auckland Citizens Advice Bureau's funding has been in some jeopardy during the budget process.

CAB general manager Kate Anderson told Morning Report that their funding has been included in the amended budget and she was optimistic.

"We're very hopeful that our funding will remain in place - in the amended budget that is in fact the case - not only for the Citizens Advice Bureau, for the other community services as well."

CAB has been told it needs to look for additional sources of funding, but has not been given much detail, Anderson said.

"We really have no understanding at all. We haven't received any formal advice in respect to that. We've just seen what you have seen, statements made by the mayor.

"Auckland Council has supported our organisation for over 52 years because they see us as an investment in community well-being and supporting the most vulnerable people in this city.

"It would be a big change if we had to try and find money elsewhere - you know, there's not a surprise pot of gold out there - it really will be quite tough, I think, to replace the funding that we get from Auckland Council."

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