It’s been a memorable year, my first in office as Mayor of our great city. It’s not been easy, and we’ve all had our struggles.
Many Aucklanders are still dealing with the devastation of the Auckland Anniversary Floods and Cyclone Gabrielle and grappling with a challenging future.
People are also struggling with shock increases in mortgages and the cost of living. Council is working very hard to meet the needs of all those affected by the extreme weather events. Meanwhile, my councillors and I are doing our best to balance the books in a way that doesn’t add to your burdens and to create a vibrant, resilient future for Auckland.
When I reflect on the past few months, a particular moment stands out to me. When I discovered that I’d come into office and was faced with a $365 million hole in the budget, I was shocked. I was frustrated, but it solidified my resolve to fix Auckland.
I’ve been fixing organisations for decades now, and I knew that the Auckland Council Group was in trouble. I could see from the outset that Aucklanders were losing money at a rate I couldn’t ignore. It was, and still is, crippled with debt from overcommitting to mega projects instead of making sure we are maintaining and making the most of the existing assets. It was badly exposed to climate and weather risks and seemingly had no plan to provide for them. It was, and still is, holding onto assets that aren’t used anymore, some that are about as useful as a chocolate teapot, and it wasn’t, and still isn’t, making the best use of its money. It’s simple stuff; we need to stop wasting your money.
Let me give you the Port of Auckland, for example. The Auckland ratepayer gets just over 2 percent in annual returns for its stake in that. Let’s relate this to personal finances. If you had some spare cash, savings, whatever it be, you would likely first look around at what savings bank accounts you could put the money into, to get some return. Right now, there are savings accounts that’ll give you more than a 5 percent return on your money – more than double what Aucklanders are getting from their investment in the port. When you’re dealing with billions of dollars, this really starts to stack up.
Our remaining shares in Auckland International Airport Limited, worth something like $1.3 billion right now, are projected to return less than 2 percent in dividends in the coming year. We can do much better by investing in a diversified asset portfolio, where we put our eggs in different baskets, so to speak. This is what we are attempting to do with the Auckland Future Fund, which will be protected so it can’t be raided for short-term gain. We are consulting on leasing the operations of the port for 35 years in exchange for an upfront payment that we will invest in the fund and on transferring our remaining shares of Auckland International Airport into the fund.
This would provide Aucklanders with a $3–4 billion fund to deliver a sustainable return to offset rates and make provision for when the manure hits the fan. I’ve mentioned before, and I’ll say it again, that our port and our airport are over-exposed to, or at risk of, the same extreme weather events as the rest of our assets.
Why would we put all our eggs in that basket? The airport flooded before Queen Street did, and the port is the city’s number one tsunami risk.
Under this plan, the port and airport will continue to operate and serve Auckland while continuing to improve their productivity. A port lease will mean the port’s strategic assets remain in public ownership, we can provide certainty to businesses and workers about its future, and we can write in protections for workers and the environment.
So, we need to get our books in order fast because we are haemorrhaging money. I could go through a heap of work underway here aside from the Auckland Future Fund that is slowly turning the tide, but it’ll put you to sleep over your New Year barbecue, and there will be a time to go through that.
The Auckland Future Fund is a smart way of doing things and getting more out of what we already have, and it makes sense for Auckland and for New Zealand to be better protecting the finances of its largest city and biggest producer of our nation’s GDP.
So, that’s my wish – not several, just that. I want my grandchildren to inherit an Auckland that’s wealthy, resilient, and prepared for the future.
On that note, I wish you and your families a happy New Year. I hope, even if the past year’s been a particularly difficult one for you, that you can find some moments to rest and connect.
I’m famously not a hugger, but I will be taking time with my family for some much-needed R’n’R.
Warm regards,
Wayne Brown, Mayor of Auckland.
