When it comes to managing the region's finances, facing reality is the only credible way to protect our ratepayers. At our recent budget committee meeting, Auckland’s councillors made the tough, responsible choice. By voting to back my proposal for the 2026/27 Annual Plan, they locked in the financial settings required to achieve our core Long-term Plan (LTP) objective: to keep future average residential rates increases to no more than 3.5 per cent.
To understand why this vote was so critical, look at what is happening across the rest of New Zealand. Metros around the country are facing massive operational hurdles for their 2026/27 Annual Plans: Hamilton is looking at 6.9%, Tauranga 13.0%, Wellington 7.4%, Christchurch 8%, Dunedin 10.5%, and Queenstown 11.7%. What do these numbers have in common? They are required just to cover basic, business-as-usual (BAU) operations.
Auckland’s agreed 7.9% rates increase is not a BAU baseline. We are facing extraordinary, non-discretionary pressures. We are funding the final stages of the largest transport infrastructure project our country has ever seen in the City Rail Link (CRL), alongside the ongoing buyouts of storm-damaged homes following the Auckland Anniversary floods and Cyclone Gabrielle. This is the right thing to do, but our recovery work here will impact us for generations. While other jurisdictions are spiralling into double digits just to keep the lights on, Auckland’s leadership voted to hold the line.
I have said many times that the CRL project took too long and cost too much. Projects don’t go bad; they start bad, and the CRL had problems from the start. But our job now is to manage that reality responsibly, not pretend the bill isn’t due.
Our long-term track record proves our discipline. Over the last three years, cumulative rates have plummeted out of control nationwide: Hamilton is up 43.8%, Tauranga 42.2%, Wellington 48.1%, Christchurch 30.9%, Dunedin 45.3%, and Queenstown a staggering 55.2%. By comparison, Auckland’s cumulative increase over the same period is 28.2%. We achieved this despite being dealt an unprecedented hand of extreme weather events and legacy infrastructure deficits.
The 7.9% rates increase in this Annual Plan is exactly what we promised in the last Long-term Plan. To me, it represents a promise we made to the public. We consulted extensively on this trajectory; our local boards heavily supported it, and by voting it through, councillors kept faith with that plan. We refused to reopen settings that would simply compound the financial pressure on ratepayers further down the road.
The 2026/2027 financial year was always going to be the toughest hurdle in the current LTP. New inflation and external cost pressures of around $213 million create genuine risk. Furthermore, since the central government announced its intention to implement a rates cap policy, Auckland has been put on negative watch by a major rating agency. We face an unprecedented level of scrutiny around our financial management, which is exactly why this vote of fiscal discipline was so vital.
Global volatility is adding fuel to the fire. If we hadn’t voted to lock in $106 million in direct savings and aggressive mitigations, we could have been looking at a 15% hike. Ongoing geopolitical tensions have driven severe fluctuations in diesel and energy prices. Council staff modelling suggests that if current volatility continues, it poses a direct risk of adding $25 million to $50 million or more to our group operating expenditure, threatening critical, fuel-reliant services like public transport, waste management, road maintenance, and facility upkeep. But we are standing firm. We have issued the CEO an annual savings target larger than the total rates revenues of 54 other Kiwi councils combined. Achieving this will require hard, disciplined choices from staff, but the political mandate has now been set.
Kicking the can down the road is a failed strategy. Deferring costs and underfunding assets simply passes the wreckage to future generations. Even though this is my last term, I refuse to leave a compromised ledger behind, and I am glad a majority of our councillors feel the same way. Through initiatives like Better Value Projects and the Auckland Future Fund, we are taking the pressure off rates and forcing the council to live within its means—delivering services better, faster, and cheaper.