My Account
Auckland Council finances came under further scrutiny at the Governing Body meeting on November 24.
Councillors were told that Council’s budget deficit was now approaching $300 million, with Mayor Wayne Brown signalling it could still get worse.
Cr Chris Darby asked for clarity on whether the budget deficit might grow by another $20 million.
Chief financial officer Peter Gudsell said the Reserve Bank signalled it would continue to “tighten”.
“If they [the Reserve Bank] are not getting the impact they want from the Official Cash Rate tightening, they have signalled that they will continue to tighten,” Gudsell said.
“I was asked last time whether $270 (million) was it. I still don’t have a crystal ball. We just have to wait and see whether the interventions work.”
Cr Julie Fairey was concerned that labour and material shortages impacting on the budget were less to do with Covid-19 and instead were “baked into the system”.
“Is this a new normal? That is one of the things I worry about. We think, ‘Oh well, actually this is just a short-term thing and sooner or later those labour and material shortages will sort themselves out’, but
they have been going on for a few years now,” Fairey said.
Gudsell said it was difficult to say whether the shortages were medium or short-term problems.
He said they could be addressed through early contractor involvement, less reliance on contractors and encouraging policy changes around the immigration border.
“It is fair to say that we have had the same impact for two or three years now. It does seem to me that it is it is likely to remain the case until the unemployment rate starts to move as well.”
Cr Richard Hills said this budget could be worse than Council’s emergency budget during the first lockdown of Covid.
Chief executive Jim Stabback said Council had to balance paying staff while delivering essential services for Aucklanders.
“The reality is that we are competing in a market with low unemployment and high competition for the right resources,” Stabback said.
He said Council had given large discounts on consenting because the shortage of skilled labour meant applications could not be completed in time.
“A lack of staff in one area is losing us potentially millions of dollars because of consent discounts.”
In a press release, Brown reiterated that double digit rates rises of 13 per cent would not happen under his leadership.
“It is by far the biggest fiscal hole in Auckland Council’s history, except for the once-in-a-hundred emergency budget when our city was put into lockdown,” Brown said.
“We aim to keep rates rises below inflation to reduce the pressure on Aucklanders now being hit by the economic and fiscal storm I warned about through the campaign and since becoming Mayor. It could still get worse.”
Brown said Council’s Expenditure Control and Procurement committee was currently looking for savings while also “trying not to squeeze Aucklanders more during a cost-of-living crisis”.
