Coronavirus: Auckland’s greatest challenge is still to come

Thursday, 28 May 2020

OPINION: Just over two months ago, we came together as a city and a nation to tackle the threat posed by the coronavirus pandemic, one of the biggest challenges we have ever faced.

The hard work and collective effort by New Zealanders throughout the Covid-19 lockdown saved lives and has allowed us to start reopening our economy.

Now, we face a new but related challenge.

The impact of Covid-19, with the lockdown, border closure and international recession, is likely to result in the most severe economic downturn in our lifetime.

**READ MORE:

* Coronavirus: Major Auckland projects face budget constraints due to Covid-19

* Coronavirus: Aucklanders have to scan QR code to enter council buildings

* Coronavirus: Why Auckland's rates still need to rise despite Covid-19 outbreak

**

For Auckland Council, it means a loss of more than half a billion dollars in revenue over the next year — a financial hit unprecedented in Auckland’s history.

Coronavirus has slashed council’s non-rates revenue from dividends from assets like Auckland Airport, significantly reduced income from our venues and facilities like the zoo and leisure centres, and has slashed income from public transport fares and parking.

With economic slowdown, there will also be lower revenue from development contributions and the council’s regulatory functions.

This loss of income means that we need to spend less.

That is why Auckland Council is tightening its belt.

Auckland Council’s chief executive and elected leaders, as well as the chief executives and board chairs of our CCOs, have taken voluntary pay cuts of up to 20 per cent. Many staff have also taken voluntary wage reductions.

Temporary and contracted workers have had to be laid off and staff recruitment frozen.

Auckland Council and its CCOs will have to downsize. That reduces our ability to deliver all our current services. It also means we will have to defer investment in some important building programmes for transport, housing and the environment.

Our Emergency Budget, which opens for public consultation today, sets out our options for how we will keep our city running, manage our finances responsibly and ensure that important services needed and valued by Aucklanders continue to be delivered.

We are also consulting on a lower than planned 2.5 per cent rates increase, as well as the previously agreed 3.5 per cent increase. For the average residential ratepayer, this would mean an increase of between $1.35 and $1.82 per week.

While some have argued for a 0 per cent increase, the huge reduction in our revenue caused by Covid-19 means that doing so would require service cuts and permanent closures to facilities that would leave us unable to support Auckland and its recovery.

We do not think this is what Aucklanders want.

To respond to the effects of Covid-19 on Aucklanders, we have budgeted $65 million to ensure that anyone in financial hardship because of the pandemic can defer their rates without penalty until they are back on their feet. We will work to support households and businesses that are affected by Covid-19.

The challenge we face is great.

However, we are determined to continue our progress towards a better and more inclusive community and to deal with long-term challenges such as climate change.

During the health crisis caused by Covid-19, we showed what this city and our country could achieve by working together.

Just as we were successful in breaking the chain of Covid-19 transmission during the lockdown, by working together we can recover from the recession and achieve a stronger and better Auckland.

Consultation on Auckland Council’s Emergency Budget opens today at noon and closes at midnight on Friday 19 June.

Please make your voice heard—visit akhaveyoursay.nz/emergency-budget to have your say.