With the summer holidays now a distant memory, I’m right into the next challenge facing our city’s decision makers – our 10-year budget for 2021-31, which sets the financial scene for the next decade. Getting the right equilibrium of necessary investment in infrastructure while retaining a strong financial position is no easy task at the best of times, but it’s especially difficult now.
While it feels like New Zealand has got through the worst of Covid-19, its financial impacts are likely to be felt for many years to come. Auckland Council will experience an estimated shortfall of $540 million over the next three years and that’s in addition to the initial $450m loss addressed by last year’s Emergency Budget.
The response is to propose a Recovery Budget, containing a host of further cost-saving initiatives to ensure we can maintain the services and facilities our city depends on, while keeping the cost to the ratepayer as low as possible.
In addition to savings, and after receiving advice from our credit rating agencies, we are proposing temporarily increasing our borrowing above our old debt to revenue limit.
Given that 40 per cent of council revenue comes from rates and our continued lack of ‘other’ revenue, it’s impossible for us to navigate these difficult times without considering how important rates are as a funding mechanism. The mayoral proposal suggests retaining our current commitment to an ongoing average 3.5 per cent rates rise per year, with a one-off increase of 5 per cent in the first year to help mitigate the ongoing impacts of Covid.
While we are preparing a budget for a 10-year period, it is the first three years that matter (as they are reflected by the current political term). While the plan is for 3.5 per cent rates increases each year, why has 5 per cent in year one been suggested? The proposed increase will allow $900m of investment in the first three years that would otherwise have been pushed out. This will mean more investment, sooner, in our local areas requested by our communities.
In Ōrākei, that includes multiple environmental programmes, planning for the improvement of fields at Bloodworth Park and Shore Rd Reserve and improving community safety in the bays, along with initiatives like the building of the north-south connection to the Glen Innes to Tamaki Dr shared path.
For the Waitematā ward, it includes projects such as the restoration of Newmarket Stream, improved biodiversity of the Hauraki Gulf and the restoration of the Auckland Art Gallery Toi o Tāmaki heritage building. More generally, it supports a move to a more proactive approach to renewing our below-ground infrastructure with a significant increase in pipe renewals focused on central Auckland.
Speaking of below ground, one thing we can all agree on is that we need to clean up the water quality at Auckland’s beaches, many of which are currently unsafe for swimming. In a couple of months we will have completed the Ōkahu Bay stormwater and wastewater separation project which will, amongst other things, reduce wastewater overflows in Ōkahu Bay. However, there are still huge problems in Hobson Bay and our beaches, from Parnell to Glendowie. Our eastern isthmus area suffers one of the highest rates of sewer overflows in Auckland. The mayoral proposal committed to addressing this in year six of the 10-year plan. I think we should address this sooner, so I put up an amendment to offer the public an option to bring forward that work to start next year.
The Eastern Isthmus Programme focuses on network separation and wastewater overflow reduction in combined network areas in Newmarket, Parnell, Hobson Bay through to St Heliers. This project would drastically turn the tide on our water quality issues, including addressing the alarming level of E. coli traces in Hobson Bay.
Because this work is funded by the water quality targeted rate, and current levels are already committed, we can only fast track this work if that rate is increased by 5 per cent, or $3.30 per annum for the average Auckland homeowner, next year.
But none of this is a given. We are asking all Aucklanders to have their say on all aspects of our Long Term Plan because meaningful engagement with the public is always at the heart of good decision making. There are many ways you can let us know what is most important to you, and crucially, how it should be paid for.
Public consultation opened in February and you can submit your views online until Monday March 22, on council’s website (aucklandcouncil.govt.nz). Additionally, there are a variety of events happening across the region from drop-in sessions at your local library; stalls at popular events; and community forums. I will be at all local events and always available to discuss any questions you may have. We will also be holding another series of webinars which anyone can take part in online. Details of all events can be found at www.akhaveyoursay.nz/recoverybudget. Please have your say!