Auckland Council has adopted its final Annual Budget 2023/2024, to take effect from 1 July 2023.
The budget outlines what the council plans to spend money on, the services that will be provided for that, and where savings will be made in the 2023/2024 financial year.
Auckland Council Acting Group Chief Financial Officer, John Bishop says this budget needed to respond to some challenging circumstances.
“We’ve seen rapid rises in inflation and interest rates on top of an already tough operating environment. Auckland has also experienced extreme weather events in January and February.
“This has meant some tough budget measures to respond to a $325 million gap between our revenue and operating expenses, along with a $40 million gap to fund storm-related costs in 2023/2024.”
Decisions on the package of budget measures were made by the council’s Governing Body on 9 June 2023. Starting from 1 July, Aucklanders will now begin to see these changes including slightly reduced levels of service for noise complaints, reducing in-person research services at libraries and moving more services online, fewer rubbish bins in some public areas and reductions in mowing schedules, which would see slightly longer grass in some council reserves.
“While the council will reduce spending in some areas, it will support the region’s long-term future by investing a record $3.2 billion on building or buying new assets (capital expenditure),” says Mr Bishop.
“This includes continuing work on the City Rail Link and Central Interceptor, increasing sports field capacity across the region, urban regeneration, developing new travel solutions, improving public transport, land acquisitions for parks and open spaces, and many local facility upgrades.
“We’ll also spend more than $3.7 billion on providing services (operating expenditure) in the 2023/2024 financial year.
“To fund this activity, the council has agreed an average general rates increase of 11 per cent for 2023/2024, with other adjustments to result in an overall 7.7 per cent rates increase for the average value residential property (or $4.87 a week).
“Mitigations include pausing the Long-term Differential Strategy between business and residential rates for one year and extending a timeline for the resetting of this by one year to 2038/2039. We are also temporarily reducing the Natural Environment Targeted Rate by 48.8 per cent and Water Quality Targeted rate by 77.7 per cent for one year and using the money we have already collected from these targeted rates to continue to deliver these work programmes.
“To save an estimated net (after dividends) $23 million in interest payments for the 2023/2024 financial year, the council will be selling around 39 per cent (or a 7 per cent shareholding) of our 18.09 per cent shareholding in Auckland International Airport Limited (AIAL) and using the funds to repay debt. It is estimated to save a net $115 million over the remaining term of the 2021-2031 Long-term Plan.
“The council’s 2024-2034 Long-term Plan process will begin shortly. This will include how the council plans to address a number of factors, including increased costs of the City Rail Link (CRL), renewal or replacement of storm-damaged infrastructure, climate resilience and mitigation actions, and growth and housing infrastructure costs.
“Responding to these challenges may involve some significant changes in the way council operates across the group. To support this work and ensure strong governance oversight of any such changes, the council’s Governing Body also agreed to a process for establishing a number of political working groups for the Long-term Plan.”
The full Annual Budget 2023/2024 documents will be made available on the Auckland Council website over the next week.
