13 June 2013

Business Advisory Panel says no to a living wage policy at Auckland Council

Auckland Council’s own Business Advisory Panel has firmly rejected the council following in the footsteps of Hamilton and Wellington city councils and adopting a living wage policy for its staff.

“This week we had a presentation from council’s chief economist and a good debate, and in the end most panel members said no thanks. Here’s hoping councillors take this on board when they have to make a decision in a few months,” says Chairman of the Business Advisory Panel, Councillor Cameron Brewer.

A council report to the Auckland Plan Committee on 12 March advised that lifting the hourly rate for 1,544 council staff to $18.40 could cost ratepayers over $2.5 million, excluding two CCOs Auckland Transport and Watercare. Likewise, if the so-called Auckland Living Wage of $24.11 was introduced affecting 3,354 staff it could cost ratepayers over $17.2m per annum.

After being presented with this report and costs, the Business Advisory Panel resolved on Monday night that it “urges councillors not to adopt a living wage policy at Auckland Council as Hamilton City Council has recently done, with the panel noting the negative impact the extra cost could have on ratepayers, the city’s finances, and the council’s potential ability to employ new staff and competitively remunerate, and potentially impact on Auckland’s competitiveness.”

“The Panel also noted that the council’s forecast financial impact excludes staff in Auckland Transport, Watercare, and contractors, and so the end cost could be higher. Members also made the point that if you bump up the least paid employees’ hourly rate by quite a margin, council would then also have to bump up their supervisors’ rate to maintain a differential, and so on. So rest assured there would be plenty of flow on costs to the organisation,” says Mr Brewer.

Business Advisory Panel members were also worried that this multi-million dollar cost could be lumped straight onto suburban ratepayers. Subsequently they resolved ‘that if a living wage policy were to be implemented, any additional cost should be found through the reprioritisation of existing council operational expenditure, not through a rates increase.’

“It may be great that some businesses are doing this but let’s not forget that their customers have a choice to support them or go elsewhere if they don’t want to pay more. For a council to fund a living wage, ratepayers have no choice. Either existing council services get cut or rates go up. It may be a nice idea but ironically many ratepayers like the elderly living on modest fixed incomes often below the living wage, end up funding it!

"Given how stretched the council is financially, it’s crazy that a majority of councillors back in March even voted for council staff to go away spend even more time and ratepayers’ money investigating this. Hopefully when it comes back to the Governing Body, councillors will take heed of this advice from some of Auckland’s key business leaders,” says Cameron Brewer.

www.cameronbrewer.co.nz

ENDS

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