Auckland Council’s 10-year Budget for 2021-2031, our Recovery Budget, is now open for public consultation, giving Aucklanders the opportunity to have their say.
Until Monday 22 March, we’ll be asking Aucklanders for feedback on the proposed 10-year Budget – asking them what’s important to them and how it should be paid for – to have your say visit akhaveyoursay.nz/recoverybudget.
For more insight into the council's finances and proposed 10-year Budget, take a look at the six questions answered below:
Before considering putting up rates, has the council done enough to tighten its belt?
Our proposal in the Recovery Budget is to intensify our search for savings and lock in $90 million a year as ongoing savings.
Here are some of the ways we’re already making savings, without affecting frontline services and investments:
- Reducing the council’s vehicle fleet
- Reducing the numbers of contractors and temporary staff
- Constraining salaries
- Deferring some lower priority projects
Why do we need a one-off 5 per cent rates increase next year, and how much more will people pay?
- A one-off increase of 5 per cent in the next financial year – rather than the 3.5 per cent planned - will ensure that we can maintain essential services and keep the city moving forward.
- This increase will amount to around 70 cents a week for the average-value property on top of the normal 3.5 per cent increase.
- Or put another way, an average value urban residential property ($1,083,500) would see a general rates increase of $145 per year with a 5 percent increase - $38.50 more than if we stayed with a 3.5 per cent increase.
Why does the council need to borrow so much? Is it responsible to borrow even more at a time like this?
- Auckland Council borrows to fund long-term assets. This is fairer as it spreads the costs over more than a generation, including future Aucklanders who will benefit from that investment
- Our current debt policy is to ensure that our debt is no more than 2.7 times our income. This is much lower than for a household mortgage where debt is often 4 to 5 times the level of household income.
- In this budget we propose to increase our borrowing to 2.9 times our income for the first three years, gradually returning to our current setting of 2.7. This is one of the measures that will help us respond to the impact of COVID-19
- Advice from our credit rating agencies indicates that this is unlikely to have a negative impact on our credit rating
What is asset recycling? Why don’t we just talk about asset sales?
- Asset recycling means letting go of some of our less well-used assets to help pay for new ones that will help us deliver better services to the community.
- Usually, this means selling assets to somebody else, but sometimes it is possible to instead agree that someone else will use the asset for a period of time before handing it back to us in the future.
- One of the proposals in the Recovery budget is that we continue to sell or lease surplus properties and reinvest the proceeds to meet Auckland’s critical infrastructure needs. We propose to increase our budget for this to $70 million a year over the next three years.
Does Auckland Council has a lower reliance on rates as a form of revenue than most other councils in New Zealand?
Less than 40 per cent of our revenue comes from rates. The rest comes from:
- Public transport and other transport revenue
- Watercare revenue
- Development contributions
- Ports revenue
- Regulatory fees and other user charges
- Dividends and other operating revenue
Did you know that in the 10 years since Auckland Council was formed, we’ve saved ratepayers close to $2 billion? That’s more than the rates we collected last year.
We’ve done that by reducing duplication, creating efficiencies and using our size and scale to our advantage.
In the last eight months alone, we’ve saved $107 million against a savings target of $120 million by 30 June, and why we’re proposing to lock in savings $90 million in savings each year through the 10-year Budget.