A new round of budget cuts are on the cards as Auckland Council grapples with a $900m million fall in revenue due to Covid-19 and a blow out in transport costs.
Photo: LDR / Phil Doyle / Stuff
But where the cuts are going to be made, and, what they'll mean for south Auckland are still being decided, as the numbers are crunched at council.
It's something Deputy Mayor Bill Cashmore is more than aware of. The Franklin Ward councillor said transport remains the single biggest ticket item in the city's annual budget and was expected to cost $715m for 2022/2023.
But a drop in public transport use from Covid-19 has hit Auckland Transport (AT) hard, with patronage at only 40 percent of pre-pandemic levels.
It has said it can't afford to run the city's public transport system in its current form, beyond the end of June, due to rising costs.
Cashmore said AT is facing a perfect storm and if the transport budget ends up ballooning to $900m or $1billion, the city will be under serious pressure to find the funds.
"But the chances of AT getting more money from the council are pretty slim," Cashmore said.
He said there could be more funding for public transport in the government's emissions reduction plan and next month's budget, but that's speculative.
Cashmore said the council has seen a massive drop in revenue due to Covid-19, which estimates now suggest could be as high as $900m.
"We won't see the final budget numbers until mid-May, but we are going to have to make some big calls."
A drop in public transport use due to Covid-19 has hit Auckland Transport (AT) hard, with patronage at only 40 per cent of pre-pandemic levels. Photo: LDR / Phil Doyle / Stuff
In a joint statement on Wednesday, Mayor Phil Goff and Finance and Performance Committee chairperson Desley Simpson said over the past three months a number of economic indicators have worsened for the council.
They said the current financial environment will require some tough decisions by councillors, including finding savings from lower-priority spending. While some council projects will need to be deferred or delayed due to rising construction costs, supply chain constraints and falling revenue.
Manukau Ward councillor Alf Filipaina said it's hard to gauge the council's position until he sees the final budget numbers next month.
"For me it's just about waiting to get a true picture of the council's finances, because at this stage we just don't know," he said.
But Filipaina said if the councillors have to look at cuts to capital spending he's keen to see which projects in south Auckland could be affected.
"We can then sit down and look at everything. And if we do need to defer some projects, what will the ongoing impact be on those communities?"
Filipaina said with people in south Auckland feeling the full effects of the cost of living crisis it's important that the council only raises rates by the agreed 3.5 percent.
The council's budget includes an average general rate rise of 3.5 percent, coupled with a new targeted rate for climate change and other plans which could see some ratepayers facing increases of up to 6 per cent.
It also features a $1 billion climate action package, which is expected to reduce carbon emissions and deliver more public transport, cycle and walkways over the next decade.
Local Democracy Reporting is Public Interest Journalism funded through NZ On Air