Auckland Council outlines financial position as Annual Budget process begins

Auckland Council is again taking a financial hit from COVID-19 and the Alert Level 4 lockdown, but Mayor Phil Goff says that careful and prudent financial management at the council should enable it to ride out the storm.

Speaking at the first workshop on Auckland Council’s Annual Budget for 2022/23, Mayor Goff said that depending on the length of the lockdown, the cost to the council’s operating revenue is estimated to be between $65 million and around $160 million.

“Fortunately, in our Emergency Budget last year and then our 10-year Recovery Budget this year, we anticipated the risk of a further wave of COVID in the community and built in sufficient freeboard to deal with it,” he said.

“During the period when the city and the council could operate normally, we were able to reduce our anticipated debt increases and we are comfortably under our threshold limit of a 290 per cent debt to revenue ratio.

“Unless we are locked in to high alert levels much longer than what we are anticipating, we will be able to progress the $31.8 billion investment in much needed infrastructure in our 10-year Budget and maintain all our key services.

“We do not anticipate at this point the need to raise our general rates from the long term 3.5 per cent increase set out in the 10-year Budget.

“However further disruption events in the future could increase budget pressures and potentially require further action, dependent on scale and length.

“While the modelling is reasonably positive and reflects Auckland Council’s commitment to responsible financial management in challenging times, we know we’re operating in a volatile pandemic environment.

“The two budgets that councillors have passed since the pandemic began have been some of the hardest in Auckland’s history, and we had to make some tough decisions. The upshot is that at this stage our financial position is strong enough to weather the significant and ongoing disruption caused by the pandemic.

“This means that even with the current lockdown, at this stage we’ll be looking at this Annual Budget as an opportunity to press on with our $31.8 billion capital investment package for Auckland to tackle the long-term challenges our city faces in traffic congestion, housing, the environment and climate change.”

Councillor Desley Simpson, who chairs the Finance and Performance Committee, says, “Auckland Council is in a strong starting position following the good financial performance of last year and adoption of the 10-year Budget, which prioritised savings and increased efficiency across the organisation.

“While the ongoing pandemic means there is still a high level of uncertainty globally, we currently believe that this lockdown situation is likely to be manageable from a council finances perspective.

“Some risks and pressures will continue to be worked through by officers, with staff collating impacts and risks across the group, but fundamentally, Auckland is starting its next annual plan in a strong position.

Key milestones for the Annual Budget 2022/23

• September-November 2021: workshops, CCO and local board input, budget development
• December 2021: Mayoral Proposal and decisions on public consultation
• February-March 2022: public consultation
• June 2022: final Mayoral Proposal and Annual Budget adoption

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