Auckland Council approves 10-year budget with yearly rates increases

Auckland Council today voted through rates increases each year for the next decade.

The 10-year spending plan has been dubbed the Recovery Budget and aims to plug the $750 million hole left by the Covid-19 pandemic.

It lays out big spending on infrastructure and climate change action - along with how that investment will be paid for.

Ratepayers can expect to foot some of the bill - a one-off 5 percent increase is due next year and an average 3.5 percent increase each year thereafter.

It comes as water bills might also increase as Watercare tackles the region's long-lasting drought.

The council would also balance its books by slashing its own costs by $90m, collecting $70m in the first three years by shaving off some of its assets, and upping its debt-to-income ratio to 290 percent for the first three years before gradually returning to 270 percent.

The council's 10-year budget funnelled $31.8 billion into infrastructure - including $12.6b for transport, and $11.1b for water, wastewater and stormwater.

An extra $152m for climate change action was earmarked to reduce greenhouse gas emissions and pave the way for climate change adaptation.

Mayor Phil Goff said the council chose not to slash spending and cut services in the face of the pandemic, instead opting to boost investment to help the city and country recover from the economic fallout.

Infrastructure maintenance and renewal funding increased by 50 percent compared to previous 10-year budget, he said

Goff pointed to the "plight" of Wellington's water pipe woes as an example of why that spending needed to increase.

"Who hasn't ... felt for Wellington as its waste water, its storm water and its freshwater pipes have exploded in the streets because they are long past the need for renewal.

"We are not going to allow that to happen in our city."

The council had a responsibility to be financially prudent without placing unreasonable burden on ratepayers, Goff said.

He was conscious that the rates increase could add to financial pressures already felt by Aucklanders.

Councillors Sharon Stewart, Wayne Walker, Greg Sayers and John Watson voted against the one-off 5 percent rates increase.

Watson said it was not just Aucklanders in lower socio-economic positions that were struggling.

"Many businesses and more affluent households are leveraged to the max [and] are under considerable financial pressure."

He thought the council needed better ways of filling its coffers.

"The borrow, sell and rate model is not sustainable, and certainly not in the way it's been used in the last decade."

Finance committee chairperson Desley Simpson said continued investment in the region's infrastructure was vital.

"If we stop investment and just keep our libraries open and pick up the rubbish we will not be able to deal with infrastructure challenges, we will not be able to renew our ageing assets, we will not be able to meet population growth," Simpson said.

"The impact of not doing those things will take Auckland backwards."

The one-off 5 percent increase would help cover the cost of the City Rail Link and the Central Interceptor - a supersized waste water tunnel running from Grey Lynn to the Māngere Waste Water Treatment Plant that would help reduce overflows, she said.

"Our two mammoth infrastructure investments could not have come at a worse time for us."

The supercity was not relying on ratepayers to foot the bill, with public contribution no more than 40 percent of the council's revenue, Simpson said.

Auckland's rates increases were among the lowest in the country, she said.