Since the seven councils of Auckland were amalgamated in 2010, Auckland has had three mayors, two Labour members and two Browns. However, unlike the inaugural Mayor Brown, there’s no way I’m calling for the current Mayor Brown to be flushed down.
Initially, I wasn’t particularly sold on Wayne Brown. Prior to Leo Molloy’s exit from the contest, Brown’s criticism of the former’s interview with “comedian” Guy Williams, gave me the impression that Brown is bland and prudish. However, when Newsroom published what they probably thought was a damning hit piece at the end of August, it certainly altered my impression of Brown for the better.
Writing the Absolutely Biased Guide on the Auckland Mayoralty was also challenging, with Brown being one of three $$$$$ rated candidates (the others being libertarian John Alcock and 2019 third-placer Craig Lord). In the end, I decided Brown’s experience of rapidly reforming the Far North Council, Transpower and multiple District Health Boards gave him the edge over the others. However, my libertarian values usually preclude enthusiasm for particular politicians and at the time, Wayne Brown was no exception. With such low expectations, the next Auckland Council couldn’t possibly disappoint me but I hoped for a reduction in the inevitable expansion of local government.
The day after Brown’s election victory on October 8, he called upon the Auckland Transport board of directors to resign and Chair Adrienne Young-Cooper did so immediately. That was a refreshing start to his mayoralty; promising to sort out Auckland Transport featured in the profiles of many candidates, most of whom were standing for local boards and therefore powerless to do so.
Unfortunately, by the time the new Mayor and Council had been sworn in, Brown had opened the financial books and revealed the gap between revenue and spending had dramatically widened from $90 million (that’s actually $150 million with $60 million of savings slotted in for the next financial year) to $270 million on November 10, then $295 million on November 24. The latest figure was speculated as a result of public musings at the time by Reserve Bank Governor Adrian Orr. He increased the Official Cash Rate by 75 basis points to 4.25%, which has a direct impact on the cost of servicing the Council’s $11.1 billion debt. Additionally, that deficit does not include expected further cost blowouts from the Central Rail Link. Instinctively I expected Brown to roll over and accept high increases in rates to address the deficit. However, Brown is using the crisis as a justification to shoot many sacred cows that I would happily shoot, crisis or not, in his position.
On the revenue end, Brown has ruled out one of the options put forward by Council officials to increase rates by 13% over the next financial year. In a press release issued on November 24, he stated, “Left unaddressed, a $295 million budget hole would require rates rises of over 13% followed by further substantial increases in future years. Double-digit rates rises are totally unacceptable and will not happen under my leadership.”
The rates increase figure now being proposed is an average of 4.6% consisting of a 7% general rates increase mitigated by reducing some targeted rates. It is difficult to determine what specific targeted rates will be impacted; however, a reduction of two-thirds across the board is being mooted. While 4.6% is higher than the 3.5% set in 2020 and 2021, it is an improvement upon the 5.6% for the current financial year, which includes the new Climate Action Targeted Rate. It is also significantly lower than current inflation levels of over 7%. During a financial crisis in which the Council is grappling with its largest-ever deficit, Brown seeks to keep rates increases below inflation, which is a historic achievement.
Unlike Liz Truss, the shortest reigning Prime Minister in British history, Brown isn’t keeping rates low without a thought to actually being able to afford it. On December 1, the Mayor said his budget proposal would include $130 million in savings with $60 million saved in Auckland Council spending for 2023/24 on top of $33 million saved this year, $25 million offered by Auckland Transport, $27.5 million in savings offered by Tataki Auckland Unlimited and $5 million in initial savings from Eke Panuku Development Auckland. He has also put proposals to the Governing Body and Local Boards to make genuine cuts in services as well as (shock horror) sell assets to pay off debt and reduce interest costs.
I didn’t know that Auckland Council owned ten Kauri Kids early childhood centres. They’re not-for-profit, employ 50 teachers and are attended by 350 children. In the 2021/22 financial year, they made an estimated loss of $1 million and are included in a list of proposed cuts in Brown’s draft budget released this week. Chump change in the big picture but an indication that Brown is absolutely serious about reducing the deficit.
Local Boards are expected to reduce their expenditure by 5%. Collectively they have been allocated $298 million of funding this financial year, so the step will cut $15 million. If you’re a voter who actually believed the candidate you supported would increase funding for your favourite things, welcome to your lesson in how little power local boards have on their total expenditure. Doubtless, many voters were taken in by local board candidates pledging to stop the sale of parks and open spaces in their neighbourhood. Auckland Council will be making that decision.
I believe that Council’s $2 billion stake in Auckland Airport is certain to be sold, which will reduce interest costs on the Council’s debt by $88 million a year, or $240,000 a day. The usual leftist personalities who put up a facade of economic literacy, such as Bernard Hickey, claim this will cost the Council in the long term as the Airport will eventually begin paying dividends again. Covid-19 has prevented payouts for three years which will have wasted over $200 million of interest on debt that could have been reduced by cashing in those shares. Hickey says that instead of selling Auckland Airport shares, the Council should turn its eyes toward the $2.9 billion of golf course assets owned by the Council. Hickey is convinced these won’t be touched, though Councillor Maurice Williamson, who is the Chair of the Expenditure Control and Procurement Committee, says no proposals are off the table and all options will be reviewed. I say sell the golf courses and the airport shares.
Finally, the Mayor took a swipe at some of the cultural institutions no other elected representative, or even most candidates would dare. On Wednesday Brown made multiple disparaging comments about the Auckland Art Gallery which employs 122 people but attracted only 9500 paying visitors in the three months to September. Additionally, it keeps $300 million worth of art in storage. “We’ve got billions of dollars of value in the cellar that no one is looking at – do we have to own all that?”
It isn’t a promise to privatise the gallery but it is the most openly hostile language used by a mayor against owning it. While the Auckland War Memorial Museum hasn’t been mentioned, it is also running at a loss of $8 million per year and seeks an additional 8.8% in funding from the ratepayer levy. This would increase ratepayer funding by $3 million to $35 million per year but still wouldn’t fix their deficit. A spokesperson for the museum said they were grateful for the support of Auckland ratepayers, which allows them to continue to provide free entry to Aucklanders but said they would have to make unspecified cutbacks in activities without the increased funding. Why don’t they just charge for entry?
Two months is usually not enough time to be sure a newly elected politician is going to be successful and transformative. However, Wayne Brown has a track record of widespread change as Mayor of the Far North Council and the proposals he has put forward to fix the deficit while keeping rates below inflation lead me to believe that a highly motivated, capable and radical reformer is now wearing the mayoral chains. I never would have imagined Auckland would vote for such a revolution in its own neighbourhood.