Auckland Council has voted 20-1 to send mayor Wayne Brown’s annual budget for 2023/24 out for public consultation early in the new year.
But the meeting was not without controversy. During the meeting, Brown announced that Auckland International Airport will shortly be seeking capital investment to fund a new domestic terminal.
That prompted the company to suspend trading on the share market.
Council’s 18 per cent shareholding in the airport makes it the largest single shareholder, but Brown does not have the authority to make announcements on its behalf.
He later said he was speculating and had no confidential knowledge of any specific plans by the airport.
But when Brown held a media conference during the council’s lunch break, he ended up clashing with journalists.
No, he said, he wasn’t embarrassed by his earlier comments. In hindsight, he was “not sure” if it was unwise.
He also wondered why they hadn’t asked him about his “terrific” achievement of the morning, in getting councillors to pass “the most difficult budget in this council’s history”, with “a resounding 20-1 majority”.
But council did not pass the budget. It voted to send it to public consultation. Many of the councillors who voted to do that made it clear they opposed some parts of the budget.
The morning’s debate had focused largely on three issues.
The first was Brown’s proposal to sell the council’s shares in the airport.
The mayor wants to sell the shares because while they’re worth about $2.1 billion, they do not return a dividend and the money could be used to pay down debt, saving about $88 million a year in interest payments.
Councillor Chris Darby said he had been asking about the strategic value of the shares and it turned out there wasn’t one. The shares were inherited from the old Auckland City Council and Manukau City Council, but Auckland Council has never adopted a strategic purpose in holding them.
”It’s capital growth stock, not a yield stock,” said Brown. “That works for pension funds that can sell when required. But I don’t see the benefit of holding a stock that pays nothing.”
Darby added, “If you want to have $2.1 billion invested, go and put it in a diversified fund. You’ll get better returns.”
Councillor Mike Lee said the shares were gifted to the council and prior to Covid had offered good returns. He was strongly opposed to their sale, as were some others.
But deputy mayor Desley Simpson seemed to be in favour.
She said, “I don’t think some councillors understand what officials are saying. Even if [the company] resumes paying dividends, and that’s not guaranteed anytime soon, there is still not likely to be any net benefit.”
Councillors’ second major concern related to transport.
The board of Auckland Transport voted this month to increase public transport fares by 6.5 per cent. Councillor John Watson questioned if that was advisable “when the Government subsidy is coming off”, which is set to occur on April 1 next year.
Lee asked if “long-suffering public transport passengers” could have a say on this. But because it was an AT board decision, officials told him no.
According to councillor Shane Henderson, the mayor’s budget would one day be called the “Death by a Thousand Cuts Budget”.
He said AT was cutting $21 million from its spending on the bus network, which would “turn the buses into a basket case and people will just get back in their cars”.
But like almost all his colleagues, he supported the budget going out to consultation
The third major concern related to proposed cuts to community and arts funding.
Councillor Josephine Bartley was the only one fully to break ranks.
”This budget is too much about money and not enough about people,” she said.
“You look at what is proposed to be cut and it is always communities. Why is that? This budget shows that we undervalue the arts, we undervalue culture, and what is going on there? I look at schools during Covid and it was arts that people relied on to help get them through.
”I understand what you mean when you say put up alternatives. But that’s unrealistic. It’s not easy, we don’t have the information, I don’t think any of us have the expertise.”
She said she was especially upset to hear the advice of Tātaki Auckland Unlimited, the council’s events and economic agency, who told council the cuts will result in “significantly heightened inequity of access for Aucklanders”.
She read out a list of events that might now be under threat, including Taiwan Day, Japan Day and Polyfest.
“All of these things are the diversity of this city, the thing that makes this city great.”
Bartley was the only councillor not to support the budget going out to consultation. She wanted it rewritten now.
The draft budget proposes to fill an existing shortfall of $295 million.
Some $130 million of this will come from cuts to services, with the balance from a 4.66 per cent net rates increase, sale of the airport shares and a better return from the Auckland port.
Public consultation will begin in March.