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A new round of budget cuts are on the cards as Auckland Council grapples with a $900 million fall in revenue because of Covid-19 and a blowout in transport costs.
But where the cuts are going to be made, and, what they'll mean forsouth Auckland are still being decided, as the numbers are crunched at the 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 per cent 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, because of rising costs.
Cashmore said AT is facing a perfect storm and if the transport budget ends up ballooning to $900m or $1 billion, 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 had suffered a massive drop in revenue because of 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."
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 had worsened for the council.
They said the current financial environment would require some tough decisions by councillors, including finding savings from lower-priority spending. Some council projects would need to be deferred or delayed because of rising construction costs, supply chain constraints and falling revenue.
A drop in public transport use amid Covid-19 has hit Auckland Transport hard. Photo / Dean Purcell
Manukau Ward councillor Alf Filipaina said it was hard to gauge the council's position until he saw 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 had to look at cuts to capital spending, he was 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 as South Aucklanders were feeling the full effects of the cost of living crisis, it was important the council only raised rates by the agreed 3.5 per cent.
The council's budget includes an average general rate rise of 3.5 per cent, coupled with a new targeted rate for climate change and other plans which could mean some ratepayers facing increases of up to 6 per cent.
It also features a $1b climate action package, which is expected to reduce carbon emissions and deliver more public transport, cycle and walkways over the next decade.
