15 May 2009
Media release

Labour: time to talk about the true costs

The Government’s Super City plan will cost Auckland ratepayers up to $750 each to implement - a cost estimated to be well over 30 per cent higher than the Royal Commission’s plan, says Labour’s Auckland Issues spokesperson Phil Twyford.

Job losses will also be doubled under the Government’s plan, with as many as 817 people losing their jobs, Labour estimates.

“John Key and Rodney Hide have repeatedly refused to disclose the transition costs of their plan, which the Government has said ratepayers will foot.

“Labour believes this is yet further evidence that the Government is not telling Aucklanders the full story and so has sought its own costings to try to improve the information available,” says Phil Twyford.

“University of Auckland public economics lecturer Rhema Vaithianathan has used the Royal Commission’s modelling on costs and has adapted it to reflect the changes the Government plans to impose.

“Dr Vaithianathan estimates the transition costs of the Government’s plan will cost ratepayers between $574 and $753 each – with the lowest projected increase 34 per cent more than the Royal Commission’s model.

“Dr Vaithianathan believes job losses will range from 539 to 817 as a result of the merger - with the lowest projected increase 57 per cent higher than those expected under the Royal Commission’s plan.

“As well as foisting a flawed and undemocratic model on Aucklanders, the Government has failed to front on these fundamental issues and Labour invites it to now come clean on whatever costs - financially and in terms of jobs – it does have, so Aucklanders can make an informed decision.

“The modelling also show that on an annual basis, the Government’s Super City will cost less than that proposed by the Royal Commission. This will be achieved by gutting the second tier and centralising all functions and power,” says Phil Twyford.

“Of the four options the Government considered for the second tier, it chose the one offering the third ‘less (level of) local influence.’ It is denying Aucklanders not only the right to a referendum and the right to proper consultation based on the full story - it is selling them a second-class structure, which removes the ‘local’ from local democracy and the cost of that is immeasurable.

“Aucklanders are being asked to shell out up to $750 each to pay for the Government’s plan, on a hope and a promise.

“There’s plenty of international evidence that the long-run efficiency savings of these big mergers are highly uncertain, a qualification the Royal Commission attached to its own modelling,” says Phil Twyford.

ENDS

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