A revolt is in the air in Auckland, as ratepayers ask whether councillors are looking hard enough at the city budget and whether Len Brown needs his wings clipped

Len Brown is now one year into his second term and will be leading Auckland through until September 2016. But it's a very different political environment to election night 2013, when Len was clearly the popular choice as cheerleader of the city.

The scandal that unfolded in the weeks following has obviously permanently damaged his mana as mayor. It has also lead to noticeable loss of public interest in local body politics in Auckland.

But nevertheless Len has the legal power to lead, even he has diminished authority.
So what does this all mean as the Council struggles to settle its budget for the coming year?

There is something of a ratepayer revolt going on. The greatly increased property values have made residents fearful of rates rises. The large and expending debt provides its own worries. It will soon be at a level, relative to rate income, that was sufficient to sink Kaipara District Council.

Of course it is not quite the same. Auckland City has many and more diverse sources of income that means that levels of debt that would be unsustainable in small rural districts can be accommodated by the city. Nevertheless the warning is clear enough. The city, which is only 4 years old, has embarked on some dramatic spending plans that the seven precursor councils could not have contemplated.

I see it in my own neighbourhood. A perfectly serviceable library is being replaced in Devonport with no particular regard to actual need.

So I can imagine the decision to increase rates by 3.5% is not going to go down well. No superannuitant, either from their National super or from interest income has had an increase of income like that – more likely an increase of less than 2%.

What’s worse is that the 3.5% increase is forecast to run for ten years, a cumulative increase of 41%.

So I was surprised to read the Herald editorial on Wednesday advocating that the Council should just storm ahead with the central city rail loop start date of 2016, irrespective of whether the government stumped up with its share prior to 2020.

Is this really prudent planning? Should the Len’s wings be clipped?

Right at the moment all I read about the Council is how they can sting me for more money; higher rates, congestion charging, motorway tolls, regional fuel taxes, with no regard as to whether any of this will even pass muster with the government, who after all actually pays for the motorways.

So as a ratepayer with a keen interest in the future of the city, I would want to see a different path.

  • Don’t start the central city rail loop until 2020. Spend the time getting the electric trains sorted and better integrated with bus and ferry services.
  • See how the western motorway, with the new tunnel, influences traffic flows in Auckland and tie some of the roading improvements into that.
  • Focus on getting more effective busways underway. The Northern Busway has been a big success, at a much lower cost than rail.
  • Prune back the size of the city administration. It has grown well beyond what was contemplated back in 2010.

It is time for a new approach rather than the endless rounds of increases in costs and ambitions.

I know that a different approach is possible when dealing with public funds. When I was in government, both my portfolios of Defence and Science had virtually fixed levels of income. There were some small increases in the budget. And this was at a time when in Defence a whole lot of new capital equipment was being introduced into service (ships and helicopters), which was pushing up costs.

By careful juggling of the science budget we were able to get more money into business innovation, and get a start to Callaghan Innovation.

Those councillors who voted for ten years of rates increases need to ask themselves if they have really looked hard at the city budget. Have they taken account of the impact on households, especially those on fixed or smaller incomes?

Because it is hard to see any prudence being shown.

Comments (10)

by mikesh on November 10, 2014
mikesh

Presumably the increase in the value of the property would more than offset the rates increase. If you don't like it sell the property and make yourself a fat, non-taxable profit.

by Andrew Geddis on November 10, 2014
Andrew Geddis
  • Prune back the size of the city administration. It has grown well beyond what was contemplated back in 2010.

I think you are wrong about this. This bit on Morning Report might explain why. 

by william blake on November 10, 2014
william blake

I sort of agree with you mikesh, people , especially retiring boomers,will become economic refugees from the city. It will be interesting to see how this demographic bubble affects house prices over the next twenty years or so. If there isn't a corresponding  increase in immigration the property market will probably decline. 

I would prefer that there was a rate freeze on the purchase value of a family home so that people weren't rated out of their neighbourhoods.

 

by Nick Gibbs on November 10, 2014
Nick Gibbs

The trouble for Len lies in that it's hard to remember just what his achievements as mayor are. Murray McCully stepped in quicky when the RWC transport issue surfaced, which made Len look shakey.  He slept with a vunerable women who was not his wife. And that's all I can recall about his time in office. (for sure other could produce lists of what Len has done - just not me nor I suspect most residents in Auckland)

Surely there must be someone a bit more accomplished to lead the city through these transport difficulties.

by Nick Gibbs on November 10, 2014
Nick Gibbs

And now rates have not been capped at the promised target. So no guarantees what the rates will be for 2016. 4.5%, 5% who knows? So we have cost overruns before the major work even begins. Not a good look.

by Alan Johnstone on November 10, 2014
Alan Johnstone

This is the price of decades of under investment and lack of vision, we have a massive backlog of capital investment.

The CRL will never be cheaper to build than it is today.

Enough bleating and whinging, just get on with it.

by Wayne Mapp on November 10, 2014
Wayne Mapp

Andrew,

I should have really said the cost of staff. The current average staff cost is $84,011, whereas in 2009 it was $68,822. That is a 22% increase in the last five years, which is significantly larger than average wage and salary increases over this period of time.

by James Green on November 10, 2014
James Green

 

Spend the time getting the electric trains sorted and better integrated with bus and ferry services.

The electric trains won't be sorted, or have their timetables better integrated, until the choke on the Britomart tunnel is sorted. And the only sensible solution to that is to make Britomart a through-station.

It's false equivalence to compare new and transformative infrastructure with relatively small fry stuff like the libraries. Though, yes, it does seem mad/surprising that Devonport is getting a new library (and even stranger that the next closest library in Takapuna was also being refurbished at the same time). Having seen the new Birkenhead library, perhaps there is some library envy going on in the North Shore.

by Alan Johnstone on November 10, 2014
Alan Johnstone

"That is a 22% increase in the last five years, which is significantly larger than average wage and salary increases over this period of time."

Is it really ?

This would suggest a wage growth of around 19% over the period. (http://www.tradingeconomics.com/new-zealand/wages), it's probably not that big a reach to suggest that wage growth in Auckland has ran faster than the rest of NZ.

22% could easily be per for the course in Auckland.

by Melissa on November 12, 2014
Melissa

"That is a 22% increase in the last five years, which is significantly larger than average wage and salary increases over this period of time."

In addition to Alan Johnstone's point above, let's also note that this per-person increase is on the back of a 1500-person reduction in staff numbers (nearly 20% of the total staff).

Even taking into account a degree of duplication in the pre-merger scenario, that's still a fair whack of hands that are no longer on deck. I think it's only reasonable to assume that when you cut staff numbers, you're going to be relying on the remaining staff to do more.  As such, it's the most capable (and therefore the better paid) who you're going to need to hang on to. Ergo, higher per-employee costs.

Add that onto the fact that wages quite simply have risen since 2009, and it's not overly surprising that the 2014 wage bill, after several years of savings versus the 2009 starting point, has finally crept a bit higher.     

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