Daniel Newman is the Manurewa-Papakura Ward councillor who voted for a balanced budget while rejecting a big borrow-up and 14 per cent rate increases. He is also the deputy chairperson of the Wiri Licensing Trust and is focussed on delivering a range of renewed community assets for families throughout Manurewa and Papakura.
By a majority decision, Auckland Council has balanced its budget and is addressing a $325 million deficit. It is a painful budget, which will include a rate-rise, the partial sale of shares in Auckland International Airport, and $83 million of operating spending reductions.
I voted for that budget. So too did Franklin councillor Andy Baker, and I thank him for that. In truth, the budget is a compromise, but an essential one to make as we begin the long task of restoring financial resilience back into Auckland’s balance sheet.
it is important that I describe how we got to this point.
In truth, Auckland Council is a tapestry of legacies – some good, some bad. For example, Manukau City and Auckland City brought strong balance sheets and assets to the arrangement.
By contrast, Waitakere City brought enormous debt and a weak rating base with comparatively limited commercial enterprise.
Smaller councils like the Papakura and Franklin districts brought strong local identities that we all cherish, but limited rating bases to fund significant step-changes as the region grows.
Auckland Council is somewhat homogenised. But that does not mean all the good behaviour has been applied. Indeed, a lot of bad behaviour has taken hold.
The worst behaviour is the adoption of unfunded mandates, a commitment to policy outcomes for which no funding is appropriated.
The worst one to date is the City Rail Link, a contract my predecessors foolishly agreed to on a 50-50 cost share basis: no fixed price nor an ability to renegotiate our share of the financial liability.
The bill is going to be well north of five billion and the operating cost of the new infrastructure is neither known nor allocated.
Second, Auckland Council has run an increasingly dislocated balance sheet. We add new assets in but we have not properly funded the maintenance of our asset base. We don’t depreciate the cost of what we own.
You can do that for a time. But when you do it every single year it grows like an enormous liability. Here’s the thing; maintaining your infrastructure has to be funded through rates, you cannot charge developers to fix existing assets.
Third, it is true that Covid-19 constrained revenue. When people don’t pay for public transport, revenue goes down. When we don’t hold concerts, revenue from ticket sales goes down. It has had a significant effect.
Fourth, Auckland Council as both a service provider and an owner of assets is particularly vulnerable to supply-chain constraints that bake in inflationary pressure. The cost of bitumen for example is skyrocketing, and we tend to be a price-taker, not a price-setter.
Finally, the impact of extreme weather starting with the Auckland Anniversary weekend floods has dramatically changed the requirements of Council; the resilience of our municipal infrastructure is key.
Not only do we have to address a structural imbalance in Auckland Council’s budget, we need to do so clear in the knowledge that the financial cost of unfunded mandates will be passed on and the cost will be in the billions. Len Brown and Phil Goff have gone, but the tab for their legacies needs to be paid for.
Sadly, there is no escaping that reality.
People ask me, was there an alternative budget available that would have avoided taking tough medicine? In truth, the only options were neither responsible nor balanced.
An alternative budget option proposed by Councillor Angela Dalton amounted to little more than a rate-busting borrow-up, which would have involved tens of millions of dollars in new borrowing for pay for a year of what is in effect groceries and other daily expenses – with no solution the year after that – no tough decisions – no heavy lifting – and the guaranteed fast-track to you paying 14 per cent more in your rates within two years.
Councillor Dalton’s fast-track to 14 per cent rate increases and the inevitable loss in services would be far worse than a budget that actually starts to get Council to live within its means. No thank you. Absolutely no way!
Unfortunately, the budget is more than a statement of Auckland Council’s direction. It is also a vehicle for some colleagues to vent their growing sense of indignation at the prospect of change coupled with their intense dislike of Mayor Wayne Brown.
In a democracy the voters are always right, even if we don’t like the outcome. Voters elect a collective of representatives to debate and resolve outcomes, not like one another.
Auckland Council should not be a platform for fringe political jihadists with a propensity to explode in the face of a debate they do not like. Borrow-up budgets that avoid the truth about our financial circumstances are not our future; it is past time for grown-up governance.
Moving forward, the forthcoming Long Term Plan must be a statement of progress as we continue to scour out the cost of local government and instead return to a more balanced approach in favour of customer service and public service back to ratepayers.
For myself, the focus continues to be affordable progress: successful redevelopment projects for Weymouth Rugby; Manurewa Rugby; community facilities at the Manurewa Methodist Church; Homai Bowls; a shared path at Bruce Pulman Park; the transformation of Papakura City FC at McLennan Park, and the list goes on. My plans continue: Manurewa Tennis; Manukau Cricket; upgrades for Papakura Coastguard; Waka Ama at Weymouth; and an upgrade for the Takanini Gurdwara.
This represents some of the affordable progress I am delivering, which is the product of prudent financial planning and asset management. Isn’t that what all councillors commit to?