Going into lockdown twice in as many weeks is a worrying time for all of us but specifically business owners who are still recovering from last year. Knowing that the losses in previous lockdown were estimated at between $30-40million per day in lost GDP - as well as around 200 jobs lost per day – there is no doubt Auckland is still taking an economic hit from Covid.
Council playgrounds are closed under level 3 so if you need to leave your home by car please be extra vigilant as there will be potentially more children and adults getting some ‘out of the house time’ on our footpaths. Many small businesses are shut but try and check out those who are open and support them if you can. Equally ‘at home time’ can be stressful for some, so a friendly phone call to check in on neighbours, friends and family can make a positive difference.
I’ve shared with you previously that Auckland Council’s drop in revenue last year was significant. We now know the impact will be ongoing and with losses estimated to total $1billion by 2024. We are committed to the prudent management of our finances and a continued focus on a large amount of savings, while maintaining the essential services that Aucklanders rely on and supporting the region’s economic recovery. Therefore, the 10-year budget we will adopt in June, and now open for public consultation, will be one focused on recovery rather than business as usual.
I understand the scrutiny that is placed on the setting of rates. It is really important to me that we address any concerns about rates and the way we spend ratepayer dollars upfront. Pre-Covid, much of council’s income - 60% - came from non-rates sources, much greater than any other council in New Zealand. In this budget, we will need to do more to help ourselves and to this end we are increasing our short-term borrowing; continuing our drive for savings and efficiencies; and selling surplus assets to reinvest in critical infrastructure. We are also looking at other income, like introducing a targeted rate on Vector of $10.5 million per year (which they support). This seeks to reduce the risk of Vector’s powerlines from trees owned by council, ultimately improving public safety around power lines and reducing power outages. As for rates in general, the Mayor’s proposal seeks to retain an annual 3.5% rates increase with a one-off general rate increase of 5% for 2021/2022. This increase forms part of an overall investment package which will enable $900 million of additional investment over the next three years and would mean amongst other things a higher level of investment in projects in our two local board areas (Waitemata and Orakei). Some specific examples include restoring the Auckland Art Gallery’s beautiful heritage building and the long-awaited north/south links to the Tamaki Drive to Glen Innes shared path. However, without this level of investment projects like the restoration of the Art Gallery would be deferred out for at least three years of the plan.
As part of the budget, we will also remain committed to making savings and providing value for money to ratepayers. On that, it’s worth noting that the savings we have made since 2011/2012 mean we are operating for $316 million less than we would have otherwise, all without impacting service levels. That’s a cumulative total of just under $2Billion.
Further to that, as part of our current Emergency Budget, as of the end of January, we have made a record $105 million of savings through organisational restructuring including a review of how and where services are delivered, a reduction in the council’s vehicle fleet and more efficient procurement. We are now proposing to lock in $90 million of the savings that have been made in the current financial year, as well as selling surplus property that is no longer needed or fit for purpose, to play our part in reinvesting in the critical infrastructure Auckland needs.
Knowing how important feedback has been on water quality in the past, the mayor has also proposed we extend the Water Quality Targeted Rate (WQTR) out from 2021-2031, which makes sense in terms of enabling further investment around the region. However, I personally don’t think that proposal goes far enough. That extension would see investment in the likes of Hobson Bay held up for another six years. Based on the numerous sites across Ōrākei that have public health signage, I’m interested in your views as to whether we should wait six years for that much-needed investment or get it started now. To that end, there is an alternative proposal I’ve put forward to increase the WQTR in line with the general rates increase and bring forward work that will address the conditions of our water along the Eastern Beaches from Quay Street to Glendowie, as well as the Tāmaki catchment, along with issues facing the communities of Parnell and Newmarket. The cost of that equates to $3.30 for the average residential ratepayer.
But none of the projects are guaranteed.
Feedback is now open on the Recovery Budget (until March 22) and it’s really important to me that we hear your thoughts on all that is proposed. For information on how to take part in the consultation process online or at one of our events (depending on alert levels), please see our website here. As always, if you want to discuss any matters including our proposed Recovery Budget please reach out to me.
Stay safe in your bubbles and best wishes as always.