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Press releases drip-fed from Auckland Mayor Wayne Brown show that his 2023/24 budget proposal will seek a total rates increase of 4.66 percent.
The total rates a household pays are a combination of general rates and targeted rates. The Mayor’s proposed 4.66 percent rates increase is made up of a general rates rise of 7 percent, mitigated by reducing the Natural Environment and Water Quality targeted rates by two thirds in the 2023/2024 year. It also proposes that the long-term strategy to reduce the share of rates paid by businesses is paused for one year.
The proposals are part of Mayor Brown’s response to Auckland Council’s $295 million budget hole and will be recommended to the Governing Body this week, on December 15.
Mayor Brown has described his first six weeks in office and the push to get his budget proposal finalised, as “a battle against rate rises and service cuts”.
The key financial levers include cost savings, efficiencies, the sale of non-strategic assets and, possibly, some borrowing.
The Mayor’s 2023/24 budget proposal is seeking savings of $130 million across Council and Council Controlled Organisations, including Auckland Transport and Eke Panuku. Included in this are operational savings of $60 million that the Mayor says will focus on management and unfunded strategies, rather than service cuts.
Mayor Brown says the proposed sale of Council’s 18 percent shareholding in Auckland International Airport could raise around $2 billion, reducing the debt servicing cost to ratepayers by at least $88 million a year.
“We want to make systemic changes to ensure there isn’t a rates rise shock in 2024. If tough decisions and trade-offs are not made now, households may still face a hefty rates rise next year,” he said.
Local boards asked to tighten belts Already cash strapped local boards will be asked to find 5 percent cost savings from their annual funding of $298 million, when the 2023/24 budget proposal is put to the Governing Body next week. The Mayor suggests savings might be found through a combination of reduced spending on Locally Driven Initiatives (LDIs) and asset-based spending, postponed spending on assets, and administrative efficiencies. At the same time he says he is committed to increasing local boards’ decision making powers. Ideally, he would like local boards to be given clear budgets for their communities, have the sole power to decide how to spend it and have sole accountability over funds and decisions. “When the fiscal burden of the next financial year is behind us, I will be recommending that more funding and decisions be controlled by local boards than ever before,” Mayor Brown says.
