Brian Rudman: Spending 'snapshot' handy ammo for Brown

Auckland mayor Len Brown. Photo / Natalie Slade

Last week's admission by the Government that in the year to June 2012, Aucklanders subsidised the rest of the country by almost $1000 a head, will be ammunition for re-elected Mayor Len Brown on his next pilgrimage to the capital.

By my calculations, that adds up to a credit of about $1.6 billion for that year alone which, Mr Brown could point out, would easily cover the Government's share of digging the city rail link, which Economic Development Minister Steven Joyce and Finance Minister Bill English have been reluctant to approve.

The figures come from what the two ministers call the first "snapshot" of central government spending by region. It was commissioned by the Government from independent research group the Institute for Economic Research. Naturally enough, the ministers were at pains to claim the report showed "that taxpayers dollars are being evenly distributed across New Zealand". It doesn't.

It shows, for example, that Wellingtonians, who were in charge of allocating that year's $78 billion expenditure, won the race by a country mile. Government spending in Wellington totalled $24,481 per capita, compared with Auckland's $16,012 and at the bottom of the pile, Tasman's $14,345. This, we're told, is because Wellington is the capital and is the headquarters of many of the Government's core services.

The Wellington-based institute argues that "Auckland had a comparatively small share of per capita spending largely due to its relatively young population and efficiencies in provision of services in a large urban centre". Mr Brown will be tempted to argue that even greater efficiencies are possible if only the Government was more eager to sign up to his public transport revolution.

For Aucklanders, the silver lining is that the short-changing is not as bad as it was in 2005 when a similar report was prepared. The Government publicists who are claiming the new report is the first regional breakdown of government spending seem unaware of a similar exercise commissioned in 2006 by the Auckland City Council and lobby group Committee for Auckland from the same research group.

Analysing the fiscal year 2005, the Institute for Economic Research calculated the shortfall between tax and other government charges flowing out of Auckland and Crown expenditure coming into the region was about $3.8 billion, the equivalent of an annual donation of $5823.75 by each Aucklander to their fellow citizens. I wrote at the time, "And they call us bludgers!"

So the good news is that the deficit over the past eight years seems to have narrowed. What's missing from the current report is the proportion of government income flowing into its coffers from greater Auckland. In 2005, the figure was 35 per cent - 1 per cent greater than the 34 per cent proportion of total population.

In the current report, when it comes to operating expenditure, the only area in which Auckland scored above the national average was in, of all things, defence, where it scored 42.7 per cent of the total share. For that, Aucklanders can thank the Devonport Naval Base.

The report says regional variations are to be expected. Auckland's more youthful population and the efficiencies that go with size is the explanation given for Auckland receiving the lowest per capita health spend, $3037 compared to top of the list West Coast on $4493. But with a more youthful population, our below-average per capita spend on education of $2700, compared to Otago's $3760 or Gisborne's $4315, is harder to fathom.

No doubt when Mr Brown travels to Wellington to seek more funding for transport, the ministers will point to the $708 million spent in 2012 on transport capital expenditure in Auckland - 42.1 per cent of the national pie. The quick response is that the $672 million spent in Auckland on transport operating costs is just 27.9 per cent of the national share. The mayor could also remind ministers of the years of government short-changing that has left Auckland transport in its present parlous state.

The 2006 report only reinforced earlier reports highlighting that the image of the greedy Jafa was a myth. Earlier in the year, I'd reported that in the 1990s, only 25 per cent of government transport funding had been spent north of Pukekohe, even though nearly 40 per cent of the population lived in Auckland or Northland. What the earlier institute report exposed was that the short-changing was much broader than just transport.

In 2009, the Green Party research unit calculated that from 1990-2005, Aucklanders paid $7 billion in fuel taxes and other road-related charges, but got back only $3.2 billion in transport-related expenditure. To its credit, in 2006, the Labour Government began to increase expenditure on Auckland transport to make up for decades of neglect.

The latest report show that the catch-up on transport funding continues. But across the board, the underfunding of Auckland remains.