Auckland Mayor Wayne Brown’s budget proposal outlines a total rates rise of just 4.66 per cent which would see the average Auckland household, with a property capital value of $1.4 million, paying an extra $154 per year or $3 per week.
This is well below annual inflation of 7.2 per cent, currently at a 32-year high and projected to remain above 7 per cent until mid-2023.
It is the first time an Auckland Mayor has proposed a rates rise below inflation.
“My proposal would reduce rates in real terms and assist in the national fight against inflation, supporting Auckland households through the agony of this cost-of-living crisis and helping to protect the essential services that Aucklanders value,” Mayor Brown said.
The 4.66 per cent rates rise is part of Mayor Brown’s response to Auckland Council’s $295 million budget hole and will be recommended to the Governing Body this week.
A $295 million budget hole threatened total rates rises of over 13 per cent, which the Mayor has said is completely unacceptable and will not happen under his leadership.
The total rates a household pays is a combination of general rates and various targeted rates depending on where the property is in Auckland. The Mayor’s 4.66 per cent proposal consists of a general rates rise of 7 per cent mitigated by reducing some targeted rates in by two-thirds in 2023/24.
Mayor Brown has described his first six weeks in the mayoral office, and the massive push to get his budget proposal finalised this week, as “a battle against rate rises and service cuts”.
The key financial levers include cost savings, efficiencies, the sale of non-strategic assets and, possibly, some borrowing.
The mayor’s 2023/24 budget proposal is seeking record savings of $130 million across Auckland Council and council-controlled organisations, including Auckland Transport, Tataki Auckland Unlimited, and Eke Panuku Development Auckland. Included in this are operational savings of $60 million that will focus on management and unfunded strategies, rather than service cuts.
Local boards will be asked to play their part in plugging the $295 million budget hole by finding 5 per cent in cost savings from their total annual funding of $298 million.
The proposed sale of Auckland Council’s 18 per cent minority shareholding in Auckland International Airport Ltd could raise around $2 billion, thereby reducing the debt servicing cost to ratepayers by at least $88 million a year.
“We want to make systemic changes to ensure there isn’t a rates rise shock in 2024. If tough decisions and trade-offs are not made now, Auckland households may still face a hefty rates rise next year,” Mayor Brown said.
If the 2023/24 budget proposal is passed, following a Governing Body meeting on 15 December and consultation next year, it could be the first time in Auckland Council’s history that total rates have fallen in real terms.
