Striking a balance
On December 1, I published my Mayoral Proposal for Auckland Council's 10-year Budget 2021-2031. In normal circumstances, this budget would have built on the investments started in the 2018 Budget, which were making inroads into Auckland's long-term underfunding of infrastructure. However, these are not normal circumstances – the impacts of the virus slashed council income by $450 million and by 2024 income losses will cumulatively be around $1 billion.
While Council's first obligation is to manage our finances prudently and live within our means, we do not want to make changes that take away from the best things about our city. An austerity budget that slashed services and stopped critical infrastructure projects would worsen the recession rather than stimulate recovery.
We need to keep investing in communities, infrastructure and our environment.
But that needs to be done responsibly, alongside steps to reduce expenditure and find efficiencies. We have reduced staff, constrained salaries and deferred lower-priority projects. This year we are making savings of $120 million.
Key features of my proposal, which goes out for consultation next early year, are: Intensifying value for money and savings efforts to lock in $90 million of savings made in this year's Emergency Budget • Continuing to sell surplus properties to realise $70 million a year for three years, with proceeds to be invested in priority infrastructure • Increasing our debt to revenue borrowing from 270 percent to a temporarily higher level of up to 290 percent in the first three years, subject to not impacting negatively on our credit rating • A long-term commitment to a 3.5 percent rates increase, with a one-off increase of 5 percent next year to help meet the Covid-19 crisis • Climate change commitments of $150 million to mitigate carbon emissions, including stopping the purchase of diesel buses, as well as planning for coastal change.