Posted on July 23, 2015
Council’s Finance Committee has initiated an ‘alternative financing” review. The objectives are completely reasonable:
– reduce the proportion of council revenue funded from rates
– maximise the return on council’s investments
– explore alternative sources of financing
– review the holding of assets that are poorly aligned with council’s core business and/or the broader strategic growth priorities for Auckland.”
But this is another example of the sort of work that should have been done as part of the Long Term Plan process – not tacked on at the end. If we are serious about planning for growth, we need to be serious about looking at how we fund it. And then having that conversation with ratepayers.
Instead, while in the middle of agreeing the final budget in May, the Mayor seemed to realise that his spending aspirations for Auckland would require him to agree to at least look more broadly at how we should pay for it. Instead of his preferred approach of asking taxpayers or ratepayers to pay for it. He conceded it’s the first time in 5 years councilors have had a debate on issues like this.
Although characterised as an asset sales exercise, it’s more about efficient use of our balance sheet: what’s the purpose of the assets we own, and what is the most effective way to fund them.
Council actually does a dreadful job with a number of the assets we own. Significant numbers of our community facilties and parks assets do not have fully funded asset management plans and so exist in various states of disrepair. Liston Park in Ellerslie (below) is but one example. If council can’t do a good job owning an asset, doesn’t it make sense to look at who might do a better one?
It’s no wonder there was considerable comment at the recent annual LGNZ conference about ‘the problems in Auckland’. We’ve been avoiding key strategic issues like this, and mishandling others (ports, transport funding, stadiums).
Auckland’s next leader needs to make sure a comprehensive financing and funding plan underpins our growth.