Viewpoint – Time to slash costs

Mayor Goff will be asking the public to support either a 2.5 or a 3.5 per cent rate increase. Four councillors, including myself, wanted a zero per cent option included, but we weren’t supported by other councillors (see story p9). Should Council to be dipping further into ratepayers’ pockets in a recession, particularly when so many individuals and families are under extreme financial hardship? The unemployment rate is going to be far higher than what we saw during the global financial crisis. That is going to further hurt ratepayers.

Auckland Council’s historical financial strategy has been very different from most other councils. It has deliberately chosen to have most of its income generated from sources other than from rates. This is unusual. Most of its income is from non-rateable charges like levies, development contributions, user-charges and the fuel tax. Consequently, the imminent recession will mean millions of dollars in lost revenue. To compensate, Council will have to find savings. Auckland Council must reset its budgets and cut its cloth to fit its purse.

Firstly, the Council must get leaner and more efficient. Because of having less revenue, it will have to find minimum savings of $400 million, even with a 3.5 per cent increase. It will need to save a total of $460 million with a zero per cent rate increase. To achieve these savings, Council will be proposing to cut, or delay infrastructure projects and will possibly cut some of our community services. 

Instead, I believe the bulk of the savings should come from internal savings in wages and the number of people employed by trimming back on non-essential services and improving productivity. However, services like libraries, rubbish collection and other core services must remain in place. Nevertheless, the majority of councillors are opposed, saying they don’t want to add to unemployment numbers. This isn’t equitable compared with the hard decisions the private sector is having to make. The Council wage bill is $911 million, yet we still can’t afford to get our roads sealed.

In addition to internal savings, now would be the correct timing for Council to be borrowing because interest rates are low, especially if the borrowing is used to build infrastructure, thereby creating jobs and employment for local businesses during a recession. However due to huge past borrowings, Council has placed itself in a position where it would now have to break its borrowing limits.

Unnecessary Council regulations also need to be cut. The time delays and the cost to do business with Council remain out of control. Council must to get back to basic core services. This is what is required for a genuine “we’re all in this together” response from Auckland Council.

Greg Sayers, Rodney Councillor
greg.sayers@aucklandcouncil.govt.nz