“Sailing into a fiscal storm”
At the end of October, newly elected mayor Wayne Brown had cryptically stated that Auckland was sailing into a fiscal storm.
Since that time, a combination of rising rates and inflation has created a 2023-2024 Annual Budget shortfall for Auckland Council of nearly $300m dollars. According to Brown, the situation was aggravated by former mayor Phil Goff’s financial mismanagement.
The finances have been made worse by the 75 basis point hike by the Reserve Bank at the end of November.
A campaign promise by the mayor to force the Ports of Auckland to pay $400m per year has since been abandoned with Brown saying it was not possible through port operations.
A combination of asset sales and rate increases are being proposed to tackle the shortfall.
One scenario allows for selling the City’s interest in Auckland’s international airport, coupled with single digit rate increases.
Brown has repeatedly said publicly he is intent on keeping rate increases to single digits, but has warned that without action, double digit increases will be necessary for years to come.
Auckland’s budget is due on December 15th.
Ports of Auckland
Brown has publicly expressed displeasure with the Ports of Auckland’s board of directors and is calling to have them replaced.
The ports are New Zealand’s largest for receiving imported goods and crucial to the supply chain.
Brown campaigned heavily on having the ports moved to another part of the country and returning the land back to Aucklanders for “public use”.
The mayor’s dress down prompted Ports of Auckland board chair Jan Dawson to respond, saying she was disappointed by Brown’s comments.
The Maritime Union of New Zealand released a statement saying the row is damaging to the economy.
The board and the union admit the ports have had problems, but blame a failed automation project, shipping disruptions, COVID and a relatively new board that has faced significant challenges. Chief executive Roger Gray started in April of 2022.
Commitment to climate change in question
Meeting climate change goals by the council are in doubt as the realities of budget cuts take hold.
Publicly, Brown has been less than enthusiastic about expensive climate action initiatives to cut carbon emissions. Senior city councillors believe, though, they can garner council support for spending measures to support the climate change agenda albeit with real budgetary challenges in the way.
Brown has moved the Transport Emissions Reduction Pathways (TERP) to come under the Transport and Infrastructure committee headed by councillor John Watson.
Watson has described Auckland’s financial situation as “grim” and says they’ll need to do a lot more with less.
Watson’s record suggests he is aligned with Brown on maintaining low rates where possible for Aucklanders.