Auckland Mayor Wayne Brown has lashed out at “Labour MPs in waiting” for not supporting the privatisation of the council’s shares in Auckland Airport on the eve of his final budget proposal.
In an exclusive interview with the Herald, Brown threatened left-wing councillors with reinstating deep cuts to arts and social services if they don’t get behind off-loading the shares when his first budget goes to the vote next week.
Last week the Herald revealed that Brown believes he has only nine votes to sell the shares with 12 votes against, although a handful of councillors are wavering on both sides.
Brown will tomorrow present his final budget proposal, which is centred on the sale of the council’s 18 per cent shareholding in Auckland Airport, worth about $2.3 billion, to address a $375 million budget hole.
Three other levers are in play to produce a balanced budget: increasing rates, increasing debt and spending cuts.
Brown’s preference is to sell the shares, keep rate rises as low as possible - hopefully around the inflation rate of 6.7 per cent - increase debt by no more than $100m, and moderate spending cuts.
If the shares are not sold, he said, rates could soar 13.5 per cent during the cost-of-living crisis.
“I want you to write down in very big letters ‘I was elected by 180,000 people to stop wasting money’,” Brown told the Herald, saying the biggest waste of money was paying $100m a year in interest to own the airport shares, and that whatever dividend came back was a lot smaller.
Brown zeroed in on “Labour MPs in waiting” who, he said, knew selling the shares was the right thing to do but were telling him they had been contacted by the unions and others, so they didn’t want to do it.
“The council is not a waiting room for would-be MPs, they are here to do what I am here to do, which is to stop wasting ratepayers’ money,” said the mayor.
Brown did not name the councillors with ambitions to be MPs, but several councillors have strong ties to the Labour Party and a potential future in national politics.
He reminded councillors that only 4 per cent of Aucklanders supported higher rates during public consultation on the proposed budget and most supported a full or partial sale of the airport shares.
Between now and next week, people would be contacting councillors and saying, “We don’t want to pay more rates”, said Brown, saying whatever amount rates went up by would be locked in forever.
“If we sell the airport shares, we stop paying $100m in interest forever,” he said.
Two weeks ago, Brown supported a “significant softening” of proposed cuts to arts and social services after public feedback and repeated that stance today, but on the proviso councillors supported a sale of the airport shares.
If the shares were not sold, Brown said, he would reinstate spending cuts ahead of putting up rates and raising debt which, he said, had got the council into the current financial hole inherited from the previous council.
Councillors like spending money and quite a lot of them still like wasting money, said Brown.
“A lot of ratepayers are struggling. We’ve also got to think about small business. A lot are struggling at the moment and it’s all well to say, ‘I’ll just put the rates up’. They are having a hard time.
“There are a lot of people out there with mortgages in a spot of bother, and I feel sorry for them. I don’t want to make it any worse,” said Brown.
In the interview, Brown ruled out using the $1.2b cash surplus used to upgrade and replace existing assets, known as depreciation, to help plug the budget hole.
The council has been progressively moving to fund 100 per cent of depreciation costs and pushed out the goal from 2025 to 2028 during Covid-19.
Brown said resetting the depreciation target would be a “short-term sugar fix”. He held up the first page of his election pamphlet containing promises to “fix Auckland’s infrastructure’ and “stop wasting money”.
Likewise, there are no plans to reduce the $2.7b capital expenditure in the budget.
The draft budget will outline how the $20m proposed storm response fund will be allocated with much of the money going to boost community-led responses, such as emergency provisions at Civil Defence centres and maraes.