A deadly pandemic, the resulting lockdown and now one of the worst water shortages in Auckland's history has led to Auckland Council introducing a new emergency budget.

The announcement that an emergency budget has formally been adopted was made today and is in response to what is described as a "significant economic impact" stemming from Covid-19 and the associated lockdown - as well as the region's ongoing severe water crisis.

The city's leaders are also managing funds in order to deliver a $2.57 billion infrastructure programme to help with economic recovery post-Covid-19.

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Auckland mayor Phil Goff said the council was looking at a nearly half a billion shortfall post-Covid-19 lockdown earlier this year.

"On top of that, we have had to meet an additional unbudgeted capital investment of $224 million to bring forward water infrastructure projects to deal with the worst drought Auckland has ever experienced.

"Managing our finances responsibly is critical," Goff said.

"With less money available, we have had to significantly cut expenditure and reduce staff numbers."

Jobs disestablished, spending slashed and properties sold to reduce debt

More than 1000 jobs at the council are set to go and all non-essential spending has stopped.

The council is also selling over $240m worth of surplus properties and non-strategic assets in a bid to reduce debt.

"Despite this significant cut in spending, we will maintain the essential services Aucklanders need and value in areas such as transport, waste and recycling services, parks and playgrounds, libraries and community facilities and other areas," the mayor said.

Auckland Council is also working to maintain investment in critical transport, housing and environmental infrastructure resulting in expenditure of $2.57b this year, Goff said.

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That figure is "slightly lower" than the pre-Covid-19 estimate, he said, but well above the average capital investment over five years of $1.6b.

"This investment will help stimulate employment and economic growth and address the backlog of properties needed to make up for the decades of underinvestment in our city," he said.