Contingency planning in the council’s budgets mean that, while it foresees an impact on its finances as a result of the recent nationwide shift to Alert Level 4, it is well prepared to respond.
The uncertainty created by the pandemic means it is not possible to forecast specific impacts at this early stage. Thankfully, the council is in a reasonably sound financial position to remain agile.
“We learnt a lot from our emergency budget and have worked hard to save money, prioritise spend and deliver more efficiently, these and other contingencies have been factored into our 10-year Budget, creating some flexibility to be able to manage the impact of this new lockdown,” says Group Chief Financial Officer Peter Gudsell.
“This means we are poised to respond, should we need to. We are of course a long way short of where we would have been had the pandemic not occurred.”
The Government’s announcement of an extension to Level 4 for the whole country until Friday, and for Auckland until at least 31 August, means there are strong headwinds. Acting Chief Economist Shane Martin has projected an impact of around $100 million a day for the Auckland economy. Aucklanders can be reassured by the fact that in past lockdowns the economy rebounded well – and the council is using prudent fiscal management to ensure the same can be said for council finances.
It is too soon to know the extent to which the council’s finances may be impacted. We can, however, expect a loss in public transport fares and parking fees, revenue loss from the Regional Fuel Tax due to less cars on the road and revenue loss from Customer and Community Services due to facility closures.
Gudsell says this should be well within the council’s means to manage, “There is still work to be done to determine the impact this lockdown could have, our finance teams are continually monitoring the situation.”
Mayor Phil Goff says, “The lockdown certainly imposes a cost on the city, both to its broader economy and the council’s own finances. However, it is necessary to stop the virus spreading rapidly across the community, costing lives and overwhelming our hospital system.
“We know from last time, that a hard lockdown not only prevented the virus from spreading but also enabled a fast economic recovery.
“In the meantime, it helps that council has taken a responsible approach to managing its finances in anticipation of further incidents of community transmission,” he says.
Finance and Performance Committee Chair Cr Desley Simpson says “Our first priority is the health of Aucklanders and we thank them for doing all they can to keep their communities safe during this challenging time.
"When we locked in our Recovery Budget we built in flexibility to account for COVID-19 lockdowns. It is very difficult to predict how long the current lockdown will be and its consequent financial impacts, however we have done it before and I have confidence in our financial team to manage us through this process.”
This is a tough time for everyone, and it is important for Aucklanders to know that there are options available to them if they are struggling financially.
If you are concerned about being able to pay your rates, please get in touch with the council. You may qualify for the Government’s rates rebate which will cover some of your rates, we also offer a rates postponement scheme and flexible payment options. Details of eligibility and conditions are available on our website.