A major restructuring and big savings are needed for the first time since the Super City began 12 years ago and must happen fast, Mayor Wayne Brown said in his inaugural speech tonight.
The Mayor told Councillors that Aucklanders face the most difficult economic outlook for at least a generation with a cost-of-living crisis and interest payments on mortgages set to triple. At the same time, he said that none of the different scenarios around Auckland Council’s finances that officers have presented to him are other than bad news.
“As a team,” he told Councillors, “we need to protect, through the dark times, the Auckland Council services that Aucklanders value.” He said he was not interested in cutting the essential services that Aucklanders pay for with their rates or raising the cost of things like visiting the zoo.
The Mayor said that the current economic and fiscal storm meant that “without tens of millions of dollars in savings, Aucklanders rates won’t just increase by inflation but by much, much more,” which he said was as unacceptable as cutting essential services.
The Mayor said that meant the new Governing Body must “radically rethink how Auckland Council and its Council-Controlled Organisations and other entities are run”.
As an example, he said it might be possible to cut $25 million out of the Council head office but that was what Ports of Auckland had spent on “other expenses” in each of the last two years.
“We need to know what that $25 million a year of ‘other expenses’ is spent on, stop it from being spent if it’s not adding anything, and return it to Auckland Council – to keep rates low, the parks in good shape, the buses running, and the zoo or museum an affordable treat for everyone.”
The Mayor emphasised that the $25 million the port spends on “other expenses” each year was just one example from one annual report of one of the entities 100 per cent owned by Auckland Council.
“We need to go through all their accounts, line by line,” the Mayor told Councillors. “That’s how we’ll keep rates low.”
Mayor Brown said Councillors had been given an opportunity, forced by circumstance, to re-imagine Auckland Council, and to act quickly to put it on a much more sustainable footing over the next three years and beyond.
Mayor Wayne Brown gives his inaugural speech at the first meeting of the Governing Body
The following is text from Mayor Brown’s speech:
Good evening everyone. I have just welcomed all our iwi. I have welcomed all our people, from many lands, who live in our great city and beautiful wider Auckland region. And I have said a few words in French, the language of my great-great grandfather, who stepped ashore at the Kaipara Harbour, over 170 years ago.
Tonight is a celebration. We gather with family, friends and supporters to celebrate, first, the fact we live in Auckland and in New Zealand, a democracy, where the will of the people ultimately decides our destiny. For that reason, everyone who ran in our Auckland elections, deserves our thanks.
We celebrate, second, our successful elections to form a new team here at Auckland Council. Each of us can be proud of the confidence that those who put us here have expressed in us. We must ensure that what they have voted for is what is delivered – and we should celebrate that it is in our hands to do so.
We also shoulder the responsibilities we have been given by the citizens of Auckland to leave our city and our region in a better and a more sustainable position than it is tonight, as we formally take up our new roles. That means environmentally. It means socially. It means culturally. And it means financially.
We take office aware that Aucklanders and New Zealanders face the most difficult economic outlook for at least a generation. There is a cost-of-living crisis that affects every one of us whether we are paying a mortgage or rent, and which we see every day at the supermarket, the petrol pump and when the email beeps telling us a new bill has arrived.
Very soon, tens of thousands of Auckland families are going to see their interest payments on their mortgages triple. Some are going to be at risk of losing all their savings and perhaps their homes. At the same time, none of the different scenarios around Auckland Council’s finances are other than bad news.
I’ve spoken about Aucklanders sailing into an economic and fiscal storm. Tonight, I’m sad to say, the wind and the rain is already here. Together, as a team, we need to protect, through the dark times, the Auckland Council services that Aucklanders value. We might streamline some. We might find ways to make them more efficient. But I’m not interested in things like cutting the essential services that Aucklanders pay for with their rates.
Our collective problem is that, without tens of millions of dollars in savings, Aucklanders rates won’t just increase by inflation but by much, much more. And that is unacceptable too. That means our new team needs, collectively, to radically rethink how Auckland Council and its Council-Controlled Organisations and other entities are run. We need to apply the test: “Less is more.” And we need to ask ourselves, about every activity and line of expenditure: “If we stop doing this, would anyone notice?” That’s the only way to protect the services Aucklanders value, while keeping any rates increases well below inflation – and not add to the agony so many Auckland families will experience over the months and perhaps years ahead. It can’t be achieved by asking people to pay another dollar to visit the zoo.
The reality is that big, major, restructuring and savings are needed for the first time since the Super City began 12 years ago – and it needs to happen fast. As my deputy Desley Simpson put it today, she and I, and all of us, must “work together to present an agreed 2023/24 Budget to the Governing Body, that will keep rates and other charges as low as possible as Aucklanders face the looming economic storm, while also trimming unnecessary expenditure in what remains of the 2022/23 financial year.” Desley is right.
In following through, we need to get the CCOs and the whole Auckland Council group involved – not just Auckland Council itself. We could cut $25 million out of the Council head office, and we will try to do so. But that is what Ports of Auckland has spent on “other expenses” in each of the last two years according to its accounts - $27 million in 2021/22 and $24 million in 2020/21. That’s not salaries, wages and contractors, or repairs, maintenance and finance costs, or anything like that. It’s unknown other stuff. We need to know what that $25 million a year of “other expenses” is spent on, stop it from being spent if it’s not adding anything, and return it to Auckland Council – to keep rates low, the parks in good shape, the buses running, and the zoo or museum an affordable treat for everyone.
That $25 million is just one number from one line of one annual report of one of the entities we own. We need to go through them all line by line. That’s how we’ll keep rates low.
In some senses, it turns out that 2022 was not the easiest year to win an election in Auckland. But, in another, we have been given an opportunity, forced by circumstance, to re-imagine Auckland Council, and to act fast, put it on a much more sustainable footing, for this year, the three years ahead, and beyond. Let us all celebrate tonight. And then let us all get on with the difficult journey ahead of us, to fix our beloved city, and help every Aucklander safely through the storm that has been building for 12 years, but which is upon us now tonight. Let’s fix Auckland, together.
