Bernard Orsman

Bernard Orsman is Super City reporter for the NZ Herald.

Budget warning for Brown

Bringing benefits to Auckland will take 'slash and burn' exercise, says councillor.

Mayor Len Brown admits it will be tough to invest in infrastructure and keep debt down. Photo / Greg Bowker
Mayor Len Brown admits it will be tough to invest in infrastructure and keep debt down. Photo / Greg Bowker

Auckland Mayor Len Brown has been told it will take a "slash and burn" exercise for his new 10-year budget to bring benefits for Aucklanders.

Mr Brown yesterday said the council faced tough choices at the start of a 16-month process to develop a new long-term budget that will focus spending on big projects, the central city and South Auckland.

"Transformational shifts" to outstanding public transport and radically improving the quality of urban living will also take priority.

Budgeted projects from the former eight councils not considered a priority in the new Auckland Plan will be delayed or axed, Mr Brown told the budget committee.

The mayor was upbeat about the city's strong growth and strong AA credit rating, but conceded concerns about soaring debt and hefty rate rises from his first term in office.

"We need to work hard to strike a balance between investing in vital infrastructure and keeping our rates and debt levels low and sustainable," he said.

An email accidentally sent to the Herald said Mr Brown would be "political toast" from a credit downgrade, which was a possibility.

Yesterday councillor Calum Penrose said driving down costs and bringing benefits to Aucklanders was going to take a "slash and burn" exercise.

It was not going to be a business-as-usual 10-year budget, according to councillor Chris Darby, who said the council was going to have to be brutal to be kind.

Mr Brown has floated the idea of an income or GST tax to replace rates and tolls or congestion charges to fund transport projects, including the $2.86 billion rail link for which there is still no funding package.

A spokesman for Finance Minister Bill English said the Government was not considering the idea of an income or GST tax to replace rates. Labour's finance spokesman, David Parker, said the party had no plans to change the way councils were funded. The National Government has ruled out tolls and a regional petrol tax to fund transport.

The mayor was upbeat about the city's strong growth and strong AA credit rating. Photo / Greg Bowker
The mayor was upbeat about the city's strong growth and strong AA credit rating. Photo / Greg Bowker

Council officers are to develop options for Mr Brown, who will report details to the budget committee on August 28.

Another option is a review of the uniform general charge, which was set at $350. Mr Brown said there was scope to increase the charge. The downside of a higher uniform charge is higher rates in poorer suburbs.

What happens next
*28 August: Brown reports back on options for budget cuts
*18 December: Budget adopted by council for public consultation
*25 June 2015: Budget approved

- NZ Herald

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