Auckland Council's position on the Three Waters reform has been consistent since the programme was announced in July 2020 and has been widely reported.
Council acknowledges the need for water reform at a national level, with many parts of the country struggling with poor urban water quality and wastewater systems that are not up to standard.
Auckland, however, has already amalgamated, with Watercare serving a population of more than 1.6 million, so it has the economies of scale and professionalism needed. What Auckland Council has consistently opposed is the governance arrangements of the reforms, particularly the lack of democratic accountability.
Auckland's water assets are not being "sold" or given away as has recently been claimed (Bruce Cotterill column, June 18). The Government is legislating the Three Waters reform programme despite council's opposition to the governance structure, and our engagement with the Working Group on Representation, Governance and Accountability has secured a significantly better outcome than had previously been proposed.
As a result of advocacy led by Mayor Phil Goff, ownership of the new entity will be proportional to the population of users. In Auckland's case, that will be approximately 93 per cent. Watercare has $2.3b in borrowings, which forms part of the total Council Group debt. The new entity will assume this debt, to be paid down over time through the new entity's revenue streams.
The legislation of the Three Waters reform will go ahead regardless of whether council accepts the Better Off funding that the government is offering to all councils as a sweetener for the reform. Refusing the more than $500m in funding would not stop the Three Waters reform — but it would force the council to consider significant further rates rises and services reduction. Hardly in the interests of ratepayers.
On council finances more broadly, Auckland Council has maintained an AA/Aa2 credit rating from international agencies S&P Global Ratings and Moody's respectively, one of the highest in the country other than the government. The measurement of the council's debt can be seen as a percentage of total assets— 18 per cent. As a percentage of income from rates, fees and general charges, the council's debt is projected to sit at 254 per cent next year, well below the limit of 290 per cent. As depreciation becomes fully funded by 2028, this will continue to trend down. Consistent credit ratings demonstrate the ratings agencies' confidence in Auckland Council's financial performance. If there was cause for concern, notice would have been put on the current ratings.
The City Rail Link (CRL) is due to be completed in 2025. The CRL project has been significantly impacted by lockdowns, with approximately 153 days lost. Further impacts have resulted from staff needing to isolate. As the old saying goes, lost time is lost money, in business. All infrastructure projects are seeing major inflation in material costs. Concrete, steel, and labour costs are all rising, some by as much as 16 per cent. The costs pressures are very real, but CRL is an alliance contract formed by a consortium of seven companies delivering the project. They are taking a collaborative approach to handle these pressures as effectively as possible.
One of the largest set of challenges facing Auckland is reducing carbon emissions, reducing congestion, improving productivity, and mitigating the effects of climate change where possible. These challenges are all closely related and the solution is likewise a set of closely related actions. The way we commute needs to evolve over time. Cars will always be part of the picture, just not to the extent they are currently. In Auckland, 50 per cent of car trips are for distances of less than 6km, and therein lies a real opportunity for behaviour change. If we really want to reduce carbon emissions, public transport will be a critical component. The Northern Busway has already proved that a quality service that is safe and comfortable, and that has reliable travel times, can change the way people travel.
To those who say that even if we reduced emissions to zero here in New Zealand, we would have minimal effect on a world scale, know that inaction will not serve us well. Yes, we are a small economy at the bottom of the Pacific, but our economy has strong links to the rest of the world and trade is critical. If we do not do our part, we are likely to face tariffs, import restrictions, or even embargoes.
Auckland Council is not perfect, but it is delivering for Aucklanders, who are benefiting from better travel options, and better and more sustainable core services. We spend around $20m a year buying new green spaces for communities to enjoy. We've saved more than $2.4b since amalgamation in 2010. We're taking a smarter approach to procurement, delivering more for less. Cash savings in this year alone amount to $90 million, with $52m in ongoing savings targets in the 22/23 year. Last year, savings were $126m.
We're investing billions to clean up our beaches, improve water quality and protect our environment—all things that Aucklanders support and value. Yes, there will always be more to do. And yes, elected representatives need to continue to dedicate their efforts to delivering better for Aucklanders. This won't be achieved by shouting from the side-lines but by making rational, prudent decisions based on facts.
I announced in 2019 that the current term would be my last as councillor. While there are challenges ahead for future councils, thanks to careful and responsible financial management throughout the Covid-19 crisis Auckland is in a solid position to tackle them and emerge a better and stronger city.
- Bill Cashmore is the deputy mayor of Auckland