Goff’s Timid Budget: What about the crises?

You wouldn’t know Auckland was in the middle of a housing and transport crisis looking at new Mayor Phil Goff’s first budget proposal.

There is no big push to cut council waste and inefficiency and redirect that into new houses and better transport. Instead, he delivers three new taxes, reduces waste services in some areas and excludes Aucklanders from commenting on his planned efficiency cuts.

His key campaign promise was a 3-6% efficiency cut across ALL council departments but there is no detail on this in his proposal.  He mentions that new efficiency targets will not now be set until February – which means there is very little time for councillors, local boards and Aucklanders to consider them prior to the formal onAnnual Plan consultation round in February/March.

Goff’s ‘more with less’ approach is an obvious one – but Aucklanders deserve the right to see the detail of what the “less” means – rather than just being told about procurement and vehicle fleet savings.

Goff has missed the opportunity to consider reducing rates by just following council staff’s preference for what they call “rating stability” ie. no change – something he never talked about on the campaign trail. He claims his 2.5% is a rate reduction but he is actually just maintaining them at last year’s level.

His three new “revenue” raising strategies all involve introducing new taxes: the visitor levy, a new infrastructure targeted rate and a petrol tax. This is perhaps not surprising coming from a 30-year central government politician, but a mayor with a greater understanding of the council business would have been more imaginative and looked at the inefficient way we manage many of our current assets.

He could have looked at “swapping” ownership of even “non-core” assets for greater priority ones, or entering public-private partnerships with other community assets to reduce operating costs.

His “living wage” plan avoids what should be his key focus: reducing the costs of council – a driver of unaffordability in Auckland which the Mayor controls. Rather he will use ratepayers money to effectively establish a public subsidy for what are currently market level wages. If he thinks wages are too low, he should be speaking to the businesses that run many of the council contracts involved (cleaning etc) to understand why. If he thinks council’s librarians are poorly paid, he should get a market review of how they compare to the thousands of other librarians around New Zealand. He claims his living wage plan will be funded from council efficiencies although there is no detail on that, and Aucklanders should have explained just what the trade-off is council staff will have to make to fund this.

He is right that homelessness in Auckland needs more support, and I agree council should act as the ‘one ring’ which binds all the other agencies, but $500,000 to “promote collaboration” isn’t the way. Council should be making more temporary accommodation available and just use the power of the Mayor’s office (expensive enough!)  to provide the coordination. He is also excluding consultation on his homeless plans in the draft annual plan budget and Aucklanders should have an opportunity to comment on this.

In terms of the Visitor levy, in principle I support the idea of someone who gets most of the benefit of our tourism and marketing spending paying for more of it. But this, and any of the new taxes, this should have been considered only once a review of council spending had been completed – not prior to it.

The proposed new infrastructure levy, designed to advance development and resolve infrastructure backlogs, may have the reverse effect. It effectively increases the cost of land development and may discourage  some developers from acquiring or proceeding with housing development. Far better to make it more attractive for people to develop by making council more efficient and by giving developers the option of owning/developing this infrastructure.

Additional new charges or service reductions are also introduced in the waste area with former North Shore and Waitakere ratepayers getting a 10% increase in waste management charges, and the same areas plus Rodney will lose their current free commercial cardboard collection.

This is a timid step from a mayor trying to both turnaround a housing crisis, fix transport and arrest a 15% customer satisfaction rating.

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