Message from the chief executive

As Mayor Brown notes, Auckland Council must respond to a range of factors that have seen the ongoing gap between our revenue and spending widen to a $295 million forecast shortfall.

This shortfall has been driven in part by an expanding range of council services and assets provided over successive decades, which has required money to invest in, maintain and operate those assets and services.

The situation has been worsened by the rapid jump in interest rates and inflation over the past year, which have not only pushed our costs higher, but are expected to stay higher for longer.

The devastating and tragic storm and cyclone events that hit Tamaki Makaurau beginning on January 27 make dealing with the financial situation an even more significant challenge.

We know many Aucklanders have been severely affected by the storm and flooding, and our immediate priority is to focus on recovery activities and keeping Aucklanders safe.

We are grateful for the work of mana whenua and mataawaka, community and business sectors, government and the communities of Tamaki Makaurau who have all helped through this time.

It will take some time to detail the exact costs of the storm event, and we know this will include spending to support the flood response and recovery work, as well as costs to repair or renew some assets we own or manage.

It is possible not all assets can or should be repaired or replaced.

It reinforces the need for us to have flexibility in our budgets to manage such unforeseen events.

Auckland Council also has an opportunity to focus on the services that matter to Aucklanders and to provide those services in the most effective and efficient ways.

Some of the services we have been providing may no longer be relevant to Aucklanders or may already be provided or funded by agencies such as central government, non-government, or private-sector groups.

This budget therefore includes tough, but necessary, measures. It proposes significant reductions in council spending and starts to systemically simplify what we do.

Some of that change is underway.

We are progressing savings of $40 million in areas like simplifying management portfolios and structures at Auckland Council, implementing group shared services, reducing our corporate offices footprint, simplifying, and consolidating strategy and policy activity, and streamlining facility maintenance contracts.

What we want you to have your say on now is a proposed mix of options to close the budget shortfall. This includes further spending reductions of $125 million across the Auckland Council group.

We acknowledge some options are demanding and difficult.

Implementing the proposal will reduce some of our work and investments in the community, as well as reduce our back-office workforce.

As detailed in this document, the proposed budget includes the spending cuts, increasing general rates while reducing some targeted rates for a year, selling airport shares to reduce our interest costs, and allowing for a slight increase in our use of debt to fund some investment in assets.

It provides for a wide range of crucial everyday services for Aucklanders, as well as $2.8 billion of capital investment in the likes of transport assets, parks and community facilities, city centre and local developments, urban regeneration and cultural development, and environmental management.

We might need to bring forward some asset-renewal spending for storm-damaged assets, and we can do this by reprioritising and delaying some of this new capital investment.

By using this range of measures, we believe we have a credible plan that sets us on the path to be a simple, efficient, and serviced-based organisation.

We have some tough choices ahead, so please share your thoughts through this consultation on what you think of the proposals.

Jim Stabback

Chief Executive

See the Annual Budget 2023/2024 consultation document (PDF 12.8MB) for more information.