Wayne Brown rules out 12% rates increases but warns of $270 million 'budget hole'

Monday, 7 November 2022

Wayne Brown gives his first interview with Stuff as new mayor of Auckland.

Auckland mayor Wayne Brown has ruled out 12% rate increases, despite claiming that Auckland Council needs to find $270 million to plug a growing budget hole.

In a statement released on Monday morning, Brown said the Auckland Council Governing Body needed to find $270 million “quickly” to cover its growing budget hole for the 2023/2024 financial year.

However, he ruled out a 12% rate increase as a way of doing this.

“Twelve per cent rate rises are not acceptable and will not happen,” Brown said.

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Mayor of Auckland, Wayne Brown, has ruled out 12% rate increases.

Instead, he said, the $270 million would need to be found through “head office savings, operational efficiencies, relentless scrutiny of the expenditure and commercial performance of CCOs [council controlled organisations] and the port” – and “limited rate rises”.

Brown blamed the million budget hole on former mayor Phil Goff, who he said “papered over the fiscal cracks” and “passed the buck to the new Governing Body”.

The $270 million budget hole does not include expected cost blow-outs from the Central Rail Link project, estimates of which Central Rail Link Ltd had declined to provide to its three shareholders, Finance Minister Grant Robertson, Transport Minister Michael Wood and Auckland Council, Brown said.

Auckland Council’s Governing Body will meet on Thursday to discuss the current financial projections of the council group, as part of the council’s Annual Budget process.

Auckland Council’s group chief financial officer Peter Gudsel acknowledged that the council was experiencing an ongoing impact from rising inflation and interest rates, which was leading to costs rising faster than revenues.

“In our published Annual Budget 2022/2023, the council estimated an ongoing operating gap between $90 and $150 million per year.

“However, as inflation and interest rates have risen higher and more rapidly than economic forecasters had projected at the time, our latest estimate of the total ongoing operating budget impact for 2023/2024 is around $270 million,” Gudsel said.

Auckland Council chief executive Jim Stabback added that while the council “can’t predict the outcomes of the annual budget decision-making”, it would “provide staff advice and work closely with the Governing Body, local boards and CCOs throughout this process”.

Final budget decisions will be made following public consultation early next year, and prior to adoption of the final Annual Budget by June 30 2023.