Auckland Mayor Wayne Brown’s cost-cutting budget triggers early job losses, with more to come

The axe has started to fall on jobs across the Auckland Council group to address a $295 million hole in Mayor Wayne Brown’s first budget.

Eke Panuku Development Auckland chief executive David Rankin has confirmed about 20 positions are initially going at the property development arm and the Herald understands staff at Tātaki Auckland Unlimited have been briefed on structural changes in the past fortnight.

Council chief executive Jim Stabback, with a staff of 7200 and an annual wages bill of more than $530 million, has also confirmed job losses are looming.

Stabback and the chief executives of council-controlled organisations (CCOs) are having to trim services and jobs in response to the $295m budget hole brought about by rising costs from high inflation and interest costs and falling revenue from things like public transport fares.

Auckland Council chief executive Jim Stabback says some positions will be disestablished.

In order to produce a balanced budget required by law, Brown is proposing a mix of measures, including selling the council’s airport shares, increasing rates by less than inflation and asking council bosses to cut costs and services likely to impact things like swimming pools, libraries and the zoo.

Earlier this month, it was announced that unemployment rose slightly from 3.3 per cent to 3.4 per cent in the fourth quarter of 2022, and there are expectations that rising interest rates will slow the economy and push unemployment up over the year.

Stabback said the next few months will require significant adjustments to the way work is delivered.

“As we have signalled, where possible we are looking for opportunities for savings in existing budgets and making immediate changes. Alongside this, we are going through the annual budget process, where more cuts to programmes, budgets and savings will be identified and adopted in June.

“We know this will result in some positions being disestablished, however at this stage, we do not know how many positions will be affected and in which areas,” Stabback said.

Rankin said about 20 positions will be lost across its urban generation projects.

Regeneration projects are being reviewed, which could lead to job cuts. Photo / Sylvie Whinray

Eke Panuku has been asked to cut its running costs by $5m to support savings in the council budget, which will be achieved by slowing down some of its regeneration projects in town centres and the waterfront, Rankin said.

This was the most discretionary part of its work, said Rankin, but some positions in other teams across the CCO will be reduced.

“Our priority is to support our staff through what is for all of us a difficult and challenging time. We will be sharing more regarding roles that will change with the team this week. Given this, and out of respect for those affected, we won’t be commenting further on the specifics of the changes proposed.

“Timeframes to meet budget savings are quite tight so we will begin to make changes over the next few months to be ready for the new financial year which begins on July 1,” Rankin said.

At Tātaki Auckland Unlimited, Auckland’s economic and cultural agency, which has to carve $44m from its spending, leaving no money for major events after 2024 and little for economic development, chief executive Nick Hill said the cost-cutting proposals have the potential to impact staff who deliver activities.

Tātaki Auckland Unlimited chief executive Nick Hill has to cut $44 million from his budget for events and economic development.

“They may include reductions in roles, changes in reporting lines or restructures in the delivery of roles.

Given the size of the financial challenges that Tātaki Auckland Unlimited faces, we need to start actioning some changes now, so the organisation is ready by July 1 when the new budget starts,” Hill said.

He said some decisions, such as moving to increased use of council-wide shared services, or programme changes, sit outside the annual budget process, and do not need to wait.

“There may be projects, or work programmes which are stopped, or some changes to teams. Where needed, formal consultation will be carried out with staff who are directly affected so management can hear their views and ideas before any decisions are made,” Hill said.

Auckland Transport, which is up for cuts of $25m and a further $7.5m in its current plans, said it was working to respond to the council’s financial challenges but wasn’t yet in a position to confirm job losses.

“Like many organisations, AT is facing the loss in revenue from Covid-19, followed by the consequences of a rapid rise in inflation and interest rates, and now significant storm recovery, which are severely affecting operating results and financial forecasts.

“We are also working to respond to Auckland Council’s financial challenges through the Annual Budget process,” said a spokesperson.

“Where possible we are looking for opportunities in both new revenue and finding savings in existing budgets.

“At this stage we are working through our prioritisation process. Following this, we will know how many positions may be affected or in which areas.”