Council’s budget hole grows to staggering $375 million, equivalent to a 22.5 per cent rates rise

Publish Date : 10 May 2023

Auckland Mayor Wayne Brown today reacted to news that Auckland Council’s operating budget hole has widened to an ongoing shortfall of $325 million, plus an additional $50m required next year for storm response.

In December, at the time of the Mayor’s Budget Proposal, the shortfall was projected to be $295 million. This was up from the $90-150 million range that council officers estimated in the 2022 annual budget; a figure that was referred to during the election campaign.  

“The ongoing projected shortfall is $225 million more than the previous council planned. That is an increase of almost $4.5 million per week. The shortfall has been driven by our huge debt, increasing interest rates and inflation, and the fact that the last council took one-off funding to cover the last year’s shortfall,” Mayor Brown said.  

“Enough is enough. We must get serious about the council's financial position. I did not create this hole, but I am determined that the council fix it, so it doesn’t just keep growing.

“Unless we can set Auckland Council on a path of financial sustainability and reduce our debt, then this gaping hole will only get bigger in the years to come.

To cover the budget shortfall with rates alone would require an average rate increase of 22.5 per cent. That is to provide the services already planned for, with nothing extra.

“The budget proposal that was consulted on called for a mix of spending cuts, rate increases, the sale of non-earning assets like the airport, and the modest use of debt. All of these have their place as just relying on rates rises that would be around 22.5 per cent, without providing anything extra, is unrealistic in this time of tight financial pressure on ratepayers, and using debt is what got us into this place.

“The council will meet to solve this problem over the next couple of weeks. Councillors need to be part of a balanced solution that doesn’t involve just hiking rates or adding to our debt mountain. 

“It is time to take this seriously if we want to secure the sustainability of the core services and infrastructure expected by Aucklanders – like flood mitigation. We need to get this done so we can focus on the things I promised to fix.”

The final Mayoral Proposal for the Annual Budget 2023/24 will be released at the end of this month.

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