In a speech to Auckland residents on Thursday morning, Mayor Brown set out a path to pay down $2billion debt, keep rates at inflation, protect core services valued by Aucklanders, cut waste and start to steady the council’s books.
He urged councillors to put aside ideology and do what is right for Auckland.
Mayor Brown is proposing average residential rates rises of 6.7 per cent in line with household inflation, as measured by the Consumer Price Index. It would be the first time in Supercity history that average residential rates rises have been capped at inflation.
Read the Mayoral Budget Proposal here [PDF]
“Auckland is in a cost of living crisis. A lot of people are doing it tough and for many it will get tougher. The typical household earns around $100,000 a year and pays $53,100 to their bank in mortgage payments.
“On top of that, they are paying an average of $3295 in rates to Auckland Council. That’s a lot of money just to keep a roof over your head - without paying for groceries, petrol, childcare, and other bills.
“Rates rises above inflation will add to the pain of struggling households, which is why I am proposing a path to avoid that,” Mayor Brown said.
“I have come up with a sensible alternative that reduces debt by $2 billion and puts Auckland Council on a path to financial sustainability. It allows us to balance the budget with modest service cuts and low rates rises,” Mayor Brown said.
Councillors are being asked to sell the council’s 18.1 per cent stake in Auckland International Airport Limited to reduce debt, keep rates affordable and protect services. The sale will permanently improve the financial position of the council, helping us to fill a $325 million budget shortfall and avoid service cuts.
“It makes absolutely no sense to retain those shares when we could realise the capital gains and wipe $2 billion of debt from the council books for good. The savings from that are huge. If we don’t sell now, we’ll have to put rates up by double-digits and make bigger cuts.
“Unfortunately, there are some councillors who for ideological reasons think we must retain a huge amount of shares in a single company listed on the stock exchange - whatever the cost. Including a few who campaigned at the last election to cap rates rises at inflation.
"We need to balance the budget, and I am offering a path forward that does that and allows councillors to meet their pledge. For some reason they would rather keep $2 billion of debt and pass the cost of servicing it back on to the ratepayer. I think that is unacceptable. So, I am appealing to those councillors to back my proposal,” Mayor Brown said.
The Governing Body will consider the mayor’s final budget proposal at a meeting on Thursday, 8 June.
Mayor Brown’s final budget proposal at a glance:
- Avoid adding to the pain: Average residential rates increase at inflation.
- Stop the waste: More than $70 million of permanent savings.
- Protect valued services: Avoiding cuts to services that Aucklanders value the most, including Local Board services, and cultural and social services.
- Pay down debt to save money: Sell the council’s stake in Auckland International Airport Limited to pay down $2.2 billion debt and save the council $100 million each year in interest costs.
- Secure our future and invest in priorities:
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- Up to $200 million community reinvestment to fix and finish community infrastructure.
- Accelerate fairer funding for Local Boards.
- New specific funding for public transport, crime prevention and health of Three Harbours.
- New financial responsibility and transparency rules to be consulted on as part of the Long-Term Plan.
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