Source: Auckland Council
Auckland Council yesterday agreed to adopt the Consultation Document for its Emergency Budget 2020/2021, with public feedback open from mid-day today until 19 June 2020.
The Emergency Budget responds to the impact of the COVID-19 crisis on Auckland Council’s finances. It estimates a huge drop in revenue in the coming financial year, with operating cash income across the council group projected to be around $525 million less than previously budgeted.
This fall in revenue results from reduced dividends; a sharp fall in revenue from venues, pools, and facilities, public transport fares and parking; and reduced income from development contributions and council regulatory fees.
A rates postponement scheme to ease pressure on those suffering genuine hardship because of COVID-19 will also defer receipt of up to $65 million in rates revenue.
“The hit to Auckland Council’s revenues by COVID-19 is more than half a billion dollars—the highest faced by any council, and the highest in the city’s history,” says Mayor Phil Goff.
“This is an emergency budget. We cannot respond to this crisis as business as usual. We have to cut our spending and manage our finances responsibly. We are required by law to balance our budget but can spread that over a slightly longer period than the next financial year.
“It is fine to borrow for infrastructure which benefits future generations. It’s not good practice to borrow to pay for today’s operational costs and load that debt on future ratepayers,” he said.
Councillors have cooperated together to put forward an emergency budget which reduces spending and defers some infrastructure projects while working hard to stop these cuts from impacting unacceptably on the vital services that the council provides Aucklanders.
“We have also sought to keep up as much investment as possible in building the infrastructure the city needs to improve transport, the environment and for housing. We want to work with the government to stimulate the economy and to save and grow new jobs to assist economic recovery.
“There are tough decisions ahead of us but by working together we can build a better and stronger Auckland.”
As part of the Emergency Budget consultation, Aucklanders will be asked whether they support the previously agreed 3.5 per cent average general rates increase, or a lower increase of 2.5 per cent.
The 2.5 per cent option would require greater cuts in spending with $50 million less investment in community assets and in transport projects to renew and make our roads safer. This option would also mean reduced footpath cleaning, closing some public toilets and removing litter bins, reduced maintenance and cleaning of public spaces at the city centre waterfront, as well as the potential removal of some public transport fare concessions.
A zero rates rise would have severe impacts on cutting vital council services, slashing investment in much needed new infrastructure, pushing up debt levels and reducing employment and business activity in Auckland.
Finance and Performance Committee Chair Desley Simpson said, “COVID-19 has punched a half-billion-dollar hole in council’s revenue which we urgently need to address. Identifying substantial increases to savings and efficiencies has been our priority. Following consultation, we then need to make the difficult but necessary decisions that will enable Auckland to recover as quickly as possible from this crisis.”
Other proposals in the Emergency Budget include a COVID-19 rates postponement scheme to allow ratepayers who are struggling financially as a result of COVID-19 to defer up to $20,000 of their rates for the 2020/2021 year, and a suspension of the Accommodation Provider Targeted Rate to provide relief to the accommodation sector.
Auckland Council’s Emergency Budget is open for feedback until Friday 19 June 2020.
Feedback can be provided online and via email or social media; in person at a local library, service centre or local board office; by phone or post; or at Have Your Say webinar.
To find out more and to have your say, visit akhaveyoursay.nz/emergency-budget.